Trump's ‘Big & Bold’ Idea for the Next Stimulus Bill
As lawmakers set their sights on a fiscal stimulus plan to follow their $2 trillion coronavirus relief package, President Trump on Tuesday said that a $2 trillion infrastructure program should be part of Congress’s agenda.
“With interest rates for the United States being at ZERO, this is the time to do our decades long awaited Infrastructure Bill,” Trump wrote on Twitter. “It should be VERY BIG & BOLD, Two Trillion Dollars, and be focused solely on jobs and rebuilding the once great infrastructure of our Country! Phase 4.”
The need: There’s widespread agreement that the United States needs to address its infrastructure. “The American Society of Civil Engineers has said more than $2 trillion in additional funding is needed for U.S. infrastructure by 2025 alone,” Bloomberg’s Mark Niquette reports. “The World Economic Forum this year ranked the U.S. 13th in matters of infrastructure, according to its global competitiveness report. Nations listed higher included Singapore, Hong Kong, Switzerland, Japan, Korea and Spain.”
The politics: Trump has long sought to enact an infrastructure plan — and, in principle at least, it was one area where the White House and Democrats both wanted progress. But the administration’s repeated “infrastructure weeks” evolved into a joke on Capitol Hill as they routinely got overshadowed by Trump-related scandals other developments. Trump’s talks with Democratic leaders for a potential $2 trillion infrastructure package collapsed last May when the president walked out of a meeting at the White House, fuming over comments House Speaker Nancy Pelosi had made regarding investigations into his administration.
House Democrats, including Pelosi, have also suggested in recent weeks that infrastructure spending should be part of the economic response to the coronavirus pandemic, so there may be room for compromise.
The big question: The issue, as always, remains how to finance that additional spending. The Trump administration had proposed to have the federal government provide seed funding, with states, municipalities and private investors ponying up the vast majority of the money needed for a variety of projects. But state and local government budgets are bound to be hit hard by the pandemic and the resulting economic downturn. Will the administration be open to having the federal government pick up more of the tab?
Trump’s tweet suggests he’d favor borrowing to finance new projects, but other Republicans may be less amenable to adding more debt.
“Democrats have historically suggested raising the gas tax. Republicans, by and large, have resisted that. Has that changed?” Politico’s Playbook team asks. “Trump would have to change the minds of almost every elected Republican on this topic. Or does he want to skip revenue increases, and just pay for this by adding it to the nation’s debt? If so, is that a politically palatable option in the middle of an election year -- even given the dire circumstances?”
Other questions: There are plenty, including whether Democrats and Republicans can agree on the kinds of projects to be included in any package. Timing is another key consideration. “Some experts pointed out that a pandemic may be a poor time to ramp up construction projects, given that federal health officials are urging workers to stay home if possible and avoid personal contact,” The Washington Post noted.
