President Trump recently announced an ambitious $200 billion infrastructure spending plan that could leverage tons of infrastructure investing in the next decade.
In this segment from Industry Focus: Energy, Transport Topics Congressional reporter Eugene Mulero explains how probable it is that the plan will actually be passed this year and how the end results would differ from the proposal if it were to be passed so soon.
A full transcript follows the video.
This video was recorded on March 1, 2018.
Sarah Priestley: You spend a lot of time on Capitol Hill, what's your impression of the likelihood of this actually getting through? And if it doesn't get through, what do you think it will look like as an end result?
Eugene Mulero: The latter is the big question. Right now, the chances are very, very slim for this year. You had the second Republican in Command in the Senate, Senator Cornyn of Texas, tell reporters yesterday that he doesn't expect an infrastructure bill to happen this year. This morning, speaking to state transportation officials, you had the big four transportation policy guys, the Chairman and ranking members of the Senate and House Transportation Committees. There was no consensus as to whether you could get an infrastructure bill done this year.
The closest we saw to some optimism was the Chairman of the House Committee, Bill Shuster of Pennsylvania, who said that he's going to really push to have these legislative markups on a bill this summer with the hope of having something done by the end of summer before the August Congressional Recess -- because Congress takes all of August off. And he told reporters this morning, if you can't get that done, he would look to have something after the midterm elections. It's technically not called a lame duck, but for lack of a better term we still call it a lame duck. A lame duck would be a presidential election. This is a midterm election.
Priestley: It's a similar effect.
Mulero: Correct. Bill Shuster is saying that because, since this is a midterm, it's customary for Congress not to do anything legislatively the month or two months prior to a midterm or a presidential election.
So, it's a very pessimistic, bleak outlook on whether or not they're going to get a big transportation bill this year. I actually go back to after Trump was elected, I want to say a week or two after Trump was elected, speaker Paul Ryan did a big panel, I think it was with The Atlantic magazine, talking about doing an autopsy of the election and getting his reaction. And he was asked, "President Trump is calling himself the Builder in Chief, he's going to get an infrastructure bill done. What do you think of it?" His reaction literally was to laugh out loud and then say, "We just passed the highway bill," referring to the 2015 FAST Act highway law, and then he says, "The Highway Trust Fund doesn't expire until 2020." Then, next topic. So, the leader of the Republican House of Representatives, and a person who's opposed to increasing the federal gas tax, which is actually the big elephant in the room in this whole big debate, he basically acknowledged that his party is going to wait until the deadline approaching the fiscal cliff, the funding cliff, on highway transportation projects, which is October of 2020.
Now, on the flip side, to your point, let's say they actually do get a law passed this year. I think what it will look like, it will look very, very small. It's not going to be a $1.5 trillion investment leveraged thing. It will be something like, instead of $200 billion, maybe $100 billion with the goal of reaching $500 billion over six or seven years. And it doesn't increase the fuel tax, because there's a lot of Republican opposition to that. And there will be some compromise on the part of Democrats. The Democrats will sacrifice some money for transit projects, because transit projects are more relevant to urban districts. And Republicans will sacrifice some money for rural projects, because more rural districts are represented by Republicans.
Priestley: OK, that's interesting. It's interesting because a lot of infrastructure stocks got bought up on the campaign promises by President Trump and then pulled back a little bit this year. But, it seems like maybe everybody should keep their expectations in check. One thing that I will say about it that I think it's interesting is, it's really brought the subject of infrastructure to the fore of voters' minds, I feel like. I've only been in the U.S. for two years, so you can tell me if this has always been an ongoing political weapon, but it seems like it's going to become increasingly important.
Mulero: We have a very unique Commander in Chief who calls himself the Builder in Chief. That's debatable, by the way. But, since he really campaigned hard on infrastructure, and he borrowed a page from our former Vice President, Joe Biden, who was calling certain infrastructure projects like LaGuardia Airport a third-world status airport. He really elevated the conversation. One, we need to give President Trump credit for elevating the national conversation on infrastructure. He has done that.