Tuesday, January 30, 2018

US looks to Trump for a Plan on Freight and Highway Transport Infrastructure

State of the Union Speech is Supposed to Herald Details of Funding
Shipping News Feature
US – Not for the first time discussions of how to upgrade sagging US infrastructure are at the top of the agenda for many senior transport officials and executives, and much of this can be attributed to President Trump who promised a detailed proposal on the matter after campaigning on it up to his appointment a year ago. Earlier this month the bipartisan Problem Solvers Caucus (PSC) released a report of proposed solutions for improving America's infrastructure. Created in January 2017, the PSC is comprised of 48 Members of the House of Representatives evenly divided on both sides of the political aisle.

The report calls for the cap which exists on how much can be used for multimodal projects under the FAST Act’s INFRA and freight formula programmes whilst stabilising long term finance supporting the Highways Trust Fund, a perennial problem familiar to regular readers. Also it conceives of alternative revenue streams including ad valorem style taxes based on the values of freight carried and/or mileage based user fees. The price of fuel of course remains sacrosanct as far as most politicians are concerned, despite being the shortest and fairest method of imposing charges with little or no extra administration. The report points out that the 18.4 cents per gallon user fee has not been increased for 25 years! This was most eloquently pointed out by ex DoT boss Ray LaHood in 2015.

The PSC is no lightweight operation, its major success to date was to push through a bipartisan health scheme in July last year going directly against the wishes of the President and producing an acceptable way to ‘fix’ Obamacare. The new report, ‘Rebuilding America’s Infrastructure’, can be read in full here and is prefaced by the chilling possibility that infrastructure overall may be facing a funding deficit possibly equating to $2 trillion by 2025 at the current rate of investment. With Congress supplementing the Highway Trust fund for the past decade at a cost of over $140 billion the situation deserves to be properly addressed.

Now the President himself is being looked to for a solution, for a man trumpeting (quite literally) his understanding of business onlookers eagerly await the 70 page plan his administration would be made available ‘around the time’ of his first State of the Union address. A supposedly leaked precis of Mr Trump’s intentions with regards to infrastructure has been doing the rounds in Washington this week and, although this purports to give an accurate picture of how copious funds will be divided (50% to an Infrastructure Incentive Initiative Grant, 25% to a Rural Infrastructure Programme, 5% of funds for a new Federal Capital Financing Fund to buy up land for infrastructure projects etc.), it gives no indication of exactly where the money is coming from.

If the President does actually find enough money to everyone's satisfaction, whether it be from private funds, via a special federal grant, more taxes on travel or fuel, or down the back of the sofa, he will indeed have proved he is an astute businessman and not the bluffer which many take him for.

Photo: The I-35 Mississippi River Bridge in Minneapolis collapsed in 2007 killing 13 and injuring around 145.