Senate Democrats are set to unveil a $1 trillion infrastructure plan and offer President Donald Trump their support if he backs it, the NYT reports.
The plan includes $180 billion to rail and bus systems, $65 billion to ports, airports and waterways, $110 billion for water and sewer systems, $100 billion for energy infrastructure, and $20 billion for public and tribal lands.
Cited by the Times, Chuck Schumer said “our urban and rural communities have their own unique set of infrastructure priorities, and this proposal would provide funding to address those needed upgrades that go beyond the traditional road and bridge repair." The Senate Democrat leader adds that “We’re asking President Trump to work with us to make it a reality/"
As part of his agenda, Trump has promised to unveil an ambitious infrastructure package during the first 100 days of his presidency. “We will build new roads, and highways, and bridges, and airports, and tunnels, and railways all across our wonderful nation,” he vowed in his Inaugural Address.
One of Trump’s top advisers said Monday, however, that the president’s plan may run into roadblocks in the Republican-led Congress.
“He has to come up with a financing plan, and I think there’s going to be a little bit of a tug of war between the conservatives in the Republican party who are concerned about deficits and the president who’s concerned about jobs,” Richard LeFrak said on CNBC’s "Squawk Box." “I think he will prevail, ultimately, because he wants to put people to work.”
Republicans resisted President Barack Obama’s push for an infrastructure “surge” for eight years, arguing that the federal government couldn’t afford it and that state and local governments should shoulder more responsibility for improvements. However, now that Trump "has taken up the Democratic cause", they may find it more problematic.
Meanwhile, as the NYT adds, the first major test of Mr. Trump and his sway over congressional Republicans will come Tuesday morning at 10 a.m. That is when the Congressional Budget Office, the nonpartisan Capitol Hill scorekeeper, will update its budget outlook. The office is expected to say that the federal deficit, after years of decline, will start swelling again this year and will pick up steam over the next decade if policies aren’t changed to curb the growth of health care programs and of Social Security in an aging populace.
The annual report could be a major brake on Mr. Trump’s agenda, which includes large increases in spending on infrastructure and defense, as well as deep tax cuts. Those plans could collide with Republican promises to balance the budget — if Republicans care about such niceties in the Trump era.
As we noted previously, according to a Barclays analysis, infrastructure spending in the US will take a long time to ramp up. The bank laid out the top 10 projects currently in planning or construction, and just these along will take as much as 1-2 years before any practical benefits "trickle down" to the long-ignored US steel sector which Trump has vowed to revitalize. This is what Barclays said last week:
Given the unknowns about Trump’s infrastructure plan – lack of clarity on total spend, past ineffectiveness of stimulus efforts, timing of implementation, pushback from Congress – we currently model no additional metals demand from supplemental infrastructure investment during 2017-18 into our baseline forecast. As greater visibility becomes available, we will adjust our consumption forecasts to take into account the latest spending plans. The key issue we think is facing the metals sector is that even if infrastructure spending is approved at the headline level ($1trn over 10 years, or $100bn a year) and implementation is effective, the project schedule does not allow for an immediate effect on metals consumption, particularly over the next two to three years.
A list of the ten largest US infra projects is shown below:
