House Speaker Nancy Pelosi and Senate Minority Leader Charles E. Schumer are expected to meet with the president at the White House on Tuesday to try to set a path to passage of a public works package as the 2020 elections draw nearer.
In a Friday letter to fellow lawmakers, Pelosi said the meeting will focus on advancing “bipartisan action on a bold infrastructure bill to create jobs and grow our economy in a green and modern way.”
Industry groups eager for federal funding to build and repair highways and bridges and make other improvements to the nation’s crumbling infrastructure, think the chance for a deal is stronger now as lawmakers want an accomplishment to tout to their constituents as they pursue reelection in 2020.
“We feel pretty optimistic,” said Bill Sullivan, American Trucking Associations’ executive vice president of advocacy.
In a letter sent Monday Pelosi and Schumer outlined some of their priorities, ahead of Tuesday’s meeting. The speaker and minority leader urged the president to support a “big and bold” infrastructure package that goes beyond transportation to include clean energy, broadband, water, schools, housing and making public works resilient to climate change risks.
While the details of what will be discussed are still being painted in broad strokes, Pelosi has said she wants an infrastructure package of up to $2 trillion over 10 years. Trump has asked Congress for $200 billion over the same period in his fiscal 2020 budget request, which the administration had asserted could attract $1 trillion in state and private sector spending. Lawmakers of both parties last year rejected a similar White House proposal because it would require states to put up a significant portion of the money.
Several industry groups have raised the prospect of hiking the federal fuel tax, which has not been increased since 1993. Money generated from the fuel tax goes into the Highway Trust Fund, which pays for roads, bridges and public transit systems, but it is in danger of insolvency.
The U.S. Chamber of Commerce has proposed partly paying for maintenance and improvements to the country’s transport systems by raising the federal fuel tax by 25 cents per gallon over five years, which it says would generate $394 billion in 10 years. The American Trucking Associations has also called for a 20-cent hike over four years, which would raise $340 billion in a decade.
Trump has in a previous meeting with lawmakers backed a 25-cent increase to the gas tax, according to Senate Environment and Public Works ranking member Thomas R. Carper, who attended. But the president, who frequently changes his mind, could face pressure from Republicans reluctant to raise taxes.
“The Highway Trust Fund, in our view, is the foundation for an infrastructure bill,” said Matthew Jeanneret, the chief operating officer of the American Road and Transportation Builders Association. “We’d like to see them move beyond talking and actually working to get legislation passed this year.”
House Transportation and Infrastructure Committee Chairman Peter A. DeFazio said he’s had discussions with Democratic leaders ahead of the meeting, but did not provide details on those conversations. DeFazio has proposed raising fuel taxes by indexing them to inflation and having the Treasury issue bonds on the projected incomes to allow work to proceed before the revenue increases kick in.
“I am hopeful that the talks . . . will be productive, and a catalyst for the robust infrastructure investment we desperately need and to which I’m deeply committed to enacting,” DeFazio, an Oregon Democrat, said through an aide.
ICYMI: Pelosi Spoke With Trump About How They Can Work Together
A big ask
But Pelosi’s desire for as much as $2 trillion could complicate chances for compromise in an already sharply divided Congress, where the number was met with skepticism by two key Republicans earlier this month.
“We can’t afford that; we can’t pay for that,” Senate Environment and Public Works Chairman John Barrasso of Wyoming told CQ.
Senate Commerce, Science and Transportation Committee Chairman Roger Wicker of Mississippi appeared visibly shocked at the amount, too, but said he hasn’t yet “put a pencil” to it.
Both lawmakers said they are in constant communication with Trump and believe ultimately an infrastructure package will be finalized with bipartisan support.
“I’ve looked high and low and I have found that there’s no magic wand, and in the end, we’re going to have to be grownups and figure out a way to pay for it,” Wicker, a Mississippi Republican, said.
The skepticism over Pelosi’s dollar amount was echoed by Jeff Davis, a senior fellow at the Eno Center for Transportation.
“Two trillion dollars is a whole lot of money no matter how many years you spread it over,” Davis said. “Yes, numbers that high do pose a problem.”
Even over 10 years — $200 billion per year average — that’s more money than most Republicans will be “willing to swallow,” particularly if a budget caps deal increases spending by $150 billion per year, Davis said.
There’s no disagreement over the state of the nation’s infrastructure and the need to get it fixed. The American Society of Civil Engineers’ “Infrastructure Report Card,” which rates the state of public works nationwide on a scale of “A” through “F,” has since 1998 awarded the U.S. infrastructure on average a “D” because of the continued absence of money to pay for the needed maintenance and improvements.
The association, a widely cited source of analysis of the state of the country’s infrastructure, estimated in 2015 that the U.S. needs about $4.6 trillion by 2025 to repair and maintain the nation’s roads, bridges, rails and other public works. With the states and the government expected to spend about half of that, a gap of about $2.1 trillion would remain.
Although the ASCE’s estimate was based on the 10 years leading to 2025, the group says the projection remains relevant because there has been no substantial increase in infrastructure spending since. ASCE updates its projections every four years but would do so sooner if an infrastructure bill passed.
Without a bill at hand, it’s hard to assess the details of Pelosi’s proposal, but Brian Pallasch, the ASCE’s managing director for government relations and infrastructure initiatives, said $2 trillion would make a dent.
“I want to get as good a number as we can get,” Pallasch said. “It seems like it gets us a lot further along in addressing the gap and that would be a giant step forward.”
The ASCE says the toll of inaction is $3.9 trillion in losses to the U.S. GDP by 2025. Businesses would lose $7 trillion in sales, and the country could lose 2.5 million jobs by 2025, according to the organization.
“We have more than $2 trillion worth of needs,” Ed Mortimer, the vice president of transportation and infrastructure at the U.S. Chamber of Commerce said, citing the ASCE’s figures.
While Pelosi’s suggestion seems high, he said, he believes lawmakers can work together on a solution.
“We believe there’s an appetite around the country as long as people know where the money is going and that the investments that are being made are going to benefit the American economy and provide a good quality of life for the citizens, we believe they’re willing to pay,” Mortimer said.
At the meeting, Schumer is likely to bring up funding for the Gateway project, which would replace a century-old bridge and tunnel connecting New Jersey and New York. The project, a priority for Schumer and lawmakers in the two states, was excluded from Trump’s budget request. That prompted the New York Senator to accuse the Trump administration of stalling the project as revenge for Democratic opposition to a U.S.-Mexico border wall. Transportation Secretary Elaine Chao has said the project doesn’t qualify for federal funding.
While fights over the Gateway project could further complicate infrastructure negotiations, industry representatives are holding up hope that a package could reach the president’s desk sometime in the summer.
The possibility of raising the fuel tax as a way to generate some of the money could also be part of the discussions.
“If it were easy to come up with the funding for a modern transportation investment bill this would have happened a long time ago,” said Sullivan of the trucking group. “Everybody knows that this is a challenge, but we don’t believe it’s an insurmountable challenge.”
An infrastructure bill would require at least 60 votes in the Senate and 218 in the House.
In the House, where Democrats have the majority, Pelosi likely has the numbers to push through her plan once a bill is written. And both Republicans and Democrats have signaled they would like to get a bill finalized before the August recess.
“It’s going to be a challenge, no doubt about it, but we believe the opportunity to get something done is really great,” Mortimer said.