Roadblocks Facing Trump's Infrastructure Plan

Summary

WSJ Your Money Briefing

Episode: Roadblocks Facing Trump’s Infrastructure Plan
Air Date: February 2, 2018
Host: J.R. Whalen
Guest: Paul Page, Deputy Editor, WSJ Logistics Report

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Episode Overview

This episode explores the challenges and controversies surrounding President Trump’s plan for a $1.5 trillion infrastructure overhaul, as highlighted in his State of the Union address. Host J.R. Whalen and guest Paul Page dissect the financial, political, and practical obstacles standing in the way of expanded infrastructure spending, focusing especially on funding sources, the limited appeal of public-private partnerships, and the prospects for regulatory reforms.

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Key Discussion Points & Insights

1. The Scale and Structure of Trump’s Infrastructure Proposal

• Trump’s Plan: Calls for $1.5 trillion in infrastructure spending, but with only $200 billion pledged by the federal government over 6-10 years.
  • Memorable Quote:

    “200 billion sounds like a lot of money, but we’re talking about spending over anywhere from six to ten years... that’s a source of a lot of anxiety and division in Washington.”
    — Paul Page [01:14]

• The rest of the funding would need to come from state, local, and private sources.

2. Skepticism about "Leverage" and Federal Commitment

• Concerns Over "Fake Funding": Skeptics argue the real federal commitment is far less than advertised, relying on uncertain leverage.
  • Memorable Quote:

    “The formula for getting that money has never been put to test. So it’s assumed. The administration is assuming that you get to $1.5 trillion, but there’s really no guarantee that you’ll get that money.”
    — Paul Page [01:41]

3. Reliance on the Federal Fuel Tax: Political Impossibility

• Federal Fuel Tax:
  • Hasn't been raised since 1993.
  • Politically toxic; many lawmakers have pledged not to support any increase.
  • Memorable Quote:

    “Taxes have been kind of the proverbial third rail of politics in Washington for a long time... the idea that you’re going to get any significant number of Republicans... to sign off on a tax increase at the fuel tax level is just not really going to happen.”
    — Paul Page [02:31]

4. Limits of Private Investment and Public-Private Partnerships

• Private Sector Reluctance:
  • Private investors favor high-traffic routes with easy profit potential (e.g., busy urban areas).
  • Much of the country’s infrastructure needs (especially rural) lack high volume, making them unattractive for private investment.
  • Memorable Quote:

    “There's a lot of need by the transportation industry in a large swath of the country that does not have high volumes of traffic and is not seen as sort of generating the profits that private industry would want.”
    — Paul Page [03:17]

5. Reducing Permitting Delays: A Rare Point of Bipartisan Agreement

• Speeding Up Permits:
  • The Trump administration is pushing to streamline permitting, potentially reducing approval time from up to 10 years down to 1-2 years.
  • Bipartisan interest from industry and some lawmakers, but also concern this could undermine environmental review.
  • Memorable Quote:

    “The administration thinks it can cut some permitting that now can go, for instance, up to 10 years, down to a year or two or even shorter. So there’s a lot of interest in that kind of proposal.”
    — Paul Page [05:01]

6. The Long-Standing Infrastructure Dilemma: The Funding Question

• Recurring Issue:
  • The urgent need for infrastructure repair is widely recognized (e.g., highlighted by the 2007 Minnesota bridge collapse).
  • Despite repeated attention, a solution to funding divisions remains elusive.
  • Memorable Quote:

    “As much as it’s been talked about, no one has really come up with a solution to a lot of the divisions over where you get the money. That’s really the crux of the matter. Where does this money come from?... Ultimately the only agreement you really see is that somebody else should pay.”
    — Paul Page [06:10]

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Notable Quotes & Moments

• On Ambitious Funding Claims:
  “The $200 billion is supposed to be leveraged to get to that $1.5 trillion and to bring in money from both the private sector and state and local governments... there’s really no guarantee that you’ll get that money.”
  — Paul Page [01:41]

• On the Political Climate for Taxes:
  “Taxes have been kind of the proverbial third rail of politics in Washington for a long time...”
  — Paul Page [02:31]

• On the Appeal of Infrastructure Investment:
  “A lot of users of highways and ports, as well as a lot of Democrats and Republicans on the Hill would like to see some, some movement.”
  — Paul Page [05:01]

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Timestamps for Important Segments

• 00:35-01:14 — Trump’s proposal and initial skepticism
• 01:14-01:41 — Details on the federal share and leveraged funding concerns
• 02:17-03:07 — Federal fuel tax as a funding option, political context
• 03:07-03:50 — Private investor reluctance and limitations
• 05:01-05:40 — Permitting process, regulatory reform, bipartisan reaction
• 06:10-06:39 — The funding dilemma as the core issue

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Summary

This episode provides a clear-eyed look at the structural and political hurdles facing efforts to revamp America’s infrastructure. While nearly everyone agrees that urgent repairs and upgrades are needed, consensus on where the money should come from remains elusive. Federal funding is limited and possibly overstated, political realities make tax increases unlikely, and private capital seeks only certain profitable projects. The only universally popular component is streamlining the permitting process, though even that draws concern from environmental advocates. As Paul Page sums it up, agreement is high only on one thing: someone else should pay.

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(End of summary)

Transcript

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[Podcast Host Intro/Outro]

this Is yous Money Matters from the Wall Street Journal.

[J.R. Whelan]

Welcome to youo Money Matters. I'm JR Whelan in New York. In his State of the Union address, President Trump called for $1 trillion in infrastructure spending.

[President Donald Trump]

Every federal dollar should be leveraged by partnering with state and local governments and, where appropriate, tapping into private sector investment to permanently fix the infrastructure deficit. And we can do it.

[J.R. Whelan]

But the goal of building and expanding roads and bridges nationwide has been called into question over where the money will come from. Paul Page is the Wall Street Journal Logistic Report's deputy editor, and he joins us from our Washington bureau to discuss. So, Paul, many of the questions are stemming from Trump's proposal that the federal government kick in $200 billion toward the effort, but that could face opposition from many in Congress.

[Paul Page]

Right? 200 billion sounds like a lot of money, but we're talking, talking about spending over anywhere from six to 10 years. And the Trump administration calls the plan, a $1.5 trillion plan, but really only 200 billion of that comes from the federal government. And that's a source of a lot of anxiety and division in Washington.

[J.R. Whelan]

One of the people you spoke with for your story in the Wall Street Journal characterized that much federal funding as, as he put it, fake funding. What do you think he meant by that?

[Paul Page]

The $200 billion is supposed to be leveraged to get to that $1.5 trillion and to bring in money from both the private sector and state and local governments. The arguments by people such as the president of the American Trucking Associations is that that money doesn'. The formula for getting that money has never been put to test. So it's assumed. The administration is assuming that you get to $1.5 trillion, but there's really no guarantee that you'll get that money. And in fact, a lot of people believe that you'll fall far short of that goal.

[J.R. Whelan]

You know, one source of the money could be the federal fuel tax, which hasn't been raised since 1993. Based on the way the wind blows in Washington, could that be considered a viable source of of funds for the infrastructure spending?

[Paul Page]

Taxes have been kind of the proverbial third rail of politics in Washington for a long time, and raising that tax is extremely difficult to do politically. People have raised it or have raised the idea of it recently, even today at their retreat in West Virginia. The Republicans talked about it and there are some who are somewhat open to the idea. But ultimately, the idea that you're going to get any significant number of Republicans, many of whom have signed pledges to not raise tax taxes, to sign off on a tax increase at the fuel tax level is just not really going to happen.

[J.R. Whelan]

And you also mentioned in your story that private investors are not likely to have an interest in funding really any part of this plan. Why is that?

[Paul Page]

The plan is built, a great deal of it, on an idea that people in the transportation industry call public private partnerships, that is, public agencies, state agencies, the federal government take a part of a big role in a project such as a highway. And then private industry comes in and manages that and they peel off profit in some way by user fees or tolls. Those companies, and there are a bunch of them around the world in the United States, generally look for high volume type of business for highways that are heavily used commuter routes outside Washington, D.C. in Ohio, outside Chicago, in the, in some very highly populated areas of Texas. There's a lot of need by the transportation industry in a large swath of the country that does not have high volumes of traffic and is not seen as sort of generating the profits that private industry would want. Rural areas, Wyoming, Nebraska, these places which involve, which carry a lot of heavy truck traffic, which carry a lot of commerce, otherwise have great, the great volume of traffic that tollers, for instance, would be looking for.

[J.R. Whelan]

We're speaking with Paul Page from our Washington bureau, and you are listening to your Money Matters from the Wall Street Journal. Welcome back, everybody. So, Paul, many of the ideas of how the national infrastructure project could be funded face political opposition. But the Trump administration's idea to speed up the permit process to actually do the work that actually has gotten a lot of bipartisan support.

[Paul Page]

Indeed, that's one area where particularly people in the larger transportation industry, a lot of builders, a lot of users of highways and ports, as well as a lot of Democrats and Republicans on the Hill would like to see some, some movement. The administration thinks it can cut some permitting that, that now can go, for instance, up to 10 years, down to a year or two or even shorter. So there's a lot of interest in that kind of proposal. It also has a lot of opposition because a lot of people, particularly the Democrats, see that as an attempt to do an end around, around environmental rules and other oversight and reviews of projects.

[J.R. Whelan]

It's been well documented that roads and bridges and highways in this country are falling apart. And there was a tragic bridge collapse in Minnesota in 2007 that brought this to the forefront. The idea of really jump starting infrastructure repair in this country is not new. It's been hanging around Congress, it's been hanging around the White House, and it's been talked about for a long time. But I suppose that this is the brightest spotlight that it has gotten in some time.

[Paul Page]

It is the brightest spotlight. One of the problems right now is that as much as it's been talked about, no one has really come up with a solution to a lot of the divisions over where you get the money. That's really the crux of the matter. Where does this money come from? Everyone sort of agrees that you should spend a great deal of money. There's some debate about whether it's 1 trillion or 2 trillion, these kinds of numbers, but ultimately the only agreement you really see in the country right now is that somebody else should pay.

[J.R. Whelan]

All right, that's the Wall Street Journal's Logistic Reports Deputy editor Paul Page joining us from our Washington bureau. Paul, thank you so much for being with us. Thank you, JR and thank you for listening to your Money Matters. Do you like this podcast? Then rate and review us on Apple Podcasts. I'm J.R. whalen in New York for the Wall Street Journal.

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