Trump’s Infrastructure Proposal Makes Big Promises for Rural America

Trump’s Infrastructure Proposal Makes Big Promises for Rural America
Wheeling Suspension Bridge in Wheeling, WV CREDIT MAGNUS MANSKE / WIKIMEDIA COMMONS

President Trump unveiled Monday a long-awaited proposal for the $1.5 trillion Infrastructure Bill. The release of the plan aligned with the President’s annual budget request to the Congress.The Infrastructure Bill places significant focus on the rural areas of America.

A Senior Administration Official explained to reporters at Saturday’s briefing that the President’s budget is expected to pay for the Infrastructure Plan’s $200 billion in new federal spending. That spending is expected to bring a touted $1.5 trillion in investments in infrastructure over the next 10 years.  

The money would be spent in several categories, including a Rural Infrastructure Program, Infrastructure Incentive Program and Transformative Projects Program.

Out of the $200 billion pool, $100 billion would be dedicated to incentive programs, with the federal government matching funds put forward by the state and local governments for infrastructure investments. Another $20 billion would be spent on the expansion of lending programs such as Transportation Infrastructure Finance and Innovation Act, Water Infrastructure Finance and Innovation Act and Railroad Rehabilitation & Improvement Financing, as well as private activity bonds, $50 billion for the rural infrastructure, $20 billion for transformative programs and $10 billion in a capital financing fund.

According to the proposal, the money from the Rural Program would be allocated through block grants to governors, as part of the Administration’s attempt to allow the states pick their infrastructure priorities. Administration officials have echoed the president’s sentiments and repeatedly claimed governmental overreach in choosing infrastructure projects.

Here’s what funding from the Legislative Outline for Rebuilding Infrastructure in America looks like for rural areas:

  • $50 billion would be made available to the Rural Infrastructure Program for capital investments in rural infrastructure investments.
  • 80 percent of the funds under the Rural Infrastructure Program would be provided to the governor of each State via formula distribution. Governors, in consultation with a designated Federal agency and State directors of rural development, would have discretion to choose individual investments to respond to the unique rural needs of their States.
  • 20 percent of the funds under the Rural Infrastructure Program would be reserved for rural performance grants within eligible asset classes and according to specified criteria.
  • Funds made available to States under this program would be distributed as block grants to be used for infrastructure projects in rural areas with populations of less than 50,000.

According to the proposal, the Infrastructure Bill would also aim to shorten the environmental permitting process.

Government wants to move towards what one official called “One Agency One Decision” process. The goal is to streamline decision process by “creating a lead federal agency with authority to establish and move through the process,” thus eliminating procedural overlaps, redundancies or conflicting outcomes of similar analyses performed by different agencies. According to the same official, “That process would be done in 21 months, and then the permitting would be done within three months after that.”

Outside of the funding dedicated directly to infrastructure issues of rural America, including access to broadband internet projects, there are two focus areas of the proposed bill that could be of particular relevance to the 13 Appalachian states–if they are actually executed.

Trump’s Infrastructure Bill places heavy focus on the workforce development program and proposes some changes to already existing solutions, such as extending the options of those who are eligible for Pell Grants to include high-quality, short-term programs. Currently, Pell Grants apply only “to students who do not yet have a bachelor’s degree and who are enrolled in institutions of higher education offering degree programs of at least 600 clock hours or 15 weeks in length.”

During a phone interview Dr. Jay Box, President of the Kentucky Community and Technical College System, said that finding ways to modernize outdated funding mechanisms for higher education and speeding up the process of releasing qualified workforce into the job market are some of the biggest challenges faced by the college system he oversees. Box agreed that the proposed changes, like the Pell Grant extension, would be beneficial to the mission of KCTCS.

Another source of funding that could hold potential for Appalachian states is the proposal’s $20 billion in funding for the transformative programs. According to one Senior Administration Official, the funding “ensures that we’re not focusing on just patching up the infrastructure that we have currently, but [that we] will also have a vision towards the future, towards projects that can lift the American spirit, that are the next-century-type of infrastructure–as opposed to just rebuilding what we have currently.

The legislative outline talks about “ambitious, exploratory and ground-breaking project ideas that have significantly more risk than standard infrastructure projects, but offer a much larger reward profile” as the type of projects potentially to be awarded the money. Document mentions that areas of interest “could include, but would not be limited to, the transportation, clean water, drinking water, energy, commercial space, and broadband sectors.”

Skeptics from across the political spectrum cast a shadow of doubt over the proposal. From fiscal hawks on the right, who take issue with the bipartisan agreement on the two-year budget proposal passed in the Senate last week and President’s budget that balloons the national debt even further, to democrats, who question sources of funding for the outlined programs.

When asked at the briefing about the funding sources for the programs, one administration official said that the $200 billion would be paid from savings made in other areas of the federal budget.

While the President’s annual budget request to Congress serves as a platform for highlighting White House’s policy priorities and fiscal goals, Congress is not bound to meet that request. Many commentators expect the budget proposal to be dead on arrival in Congress, as the request revealed on Monday makes significant cuts to social programs such as Medicare and Medicaid and looks to repeal and replace the Affordable Care Act.

So far, the government is scheduled to run out of funding on March 23. Both parties need to finalize the appropriations for the Fiscal Year 2018 by that deadline or the government will face another shutdown.

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