From the Editor: Is President Trump’s Infrastructure Plan the Start of Something Big?
By Dan Markham
on Mar 1, 2018
In the budget proposal President Donald Trump released in mid-February, the planned infrastructure spend of $1.5 trillion was a welcome sound to the metals industry.
Now it’s true that in modern times, presidential budgets are less binding than a child’s letter to Santa. Even in a situation like the present when the House and Senate are both controlled by the president’s party, Congress will likely hash out a budget that looks very little like the executive branch’s outline.
Still, the budget proposal is significant because it represents what the White House’s priorities are. That President Trump gave infrastructure spending such a prominent place in his budget request is absolutely encouraging for the manufacturing sector, and metals in particular.
Infrastructure spending benefits the metals industry in two ways. It provides improved conditions to move metal from the mill to the service center or the service center to end user, making the domestic industry more competitive in the process. At the same time, many of these investments require increased consumption of steel and other metal products to complete. It’s a gift given twice.
However, while that $1.5 trillion figure atop the headlines is encouraging, the fine print contains at least one substantial catch. The plan only calls for $200 billion in federal investments, with the rest coming from some undetermined combination of state, local and private funding.
Trade groups such as the American Trucking Associations and the Association of American Railroads were glad the president has put the issue front and center but are looking for more concrete details on how to pay for all that concrete and steel. They say Congress must do better than that.
The ATA has made it clear the group objects to any proposal based on highway tolls and privatizing rest areas, which the organization deems as inefficient and unlikely to generate the revenues needed. ATA President and CEO Chris Spear criticized the initial outline, but later expressed some optimism following a meeting Trump held with lawmakers that suggested some flexibility in funding options.
While encouraged by the efforts to streamline federal permitting processes, the AAR and other organizations have pointed out that any plan must be accompanied by the restoration of a fully functioning Highway Trust Fund, which has deteriorated at the same rate as the roads and bridges the fund is designed to support.
There is absolutely no question that America’s infrastructure grid – whether its highways and bridges, the rail network, or its navigable waterways – is in shockingly poor condition. A major overhaul is in order. Paying for it won’t be easy, or cheap. But doing so is absolutely essential to keep us both safe and competitive for decades to come.
At some point, the hard decisions must be made.