Compiled by Editorial Staff
A big promise made to the American people under the Trump Administration was its ambitious plans to rebuild our nation’s crumbling infrastructure, a plan that both sides of the parties agreed on vehemently. A month into his presidency, and with no real proposal drafted, optimism for infrastructure spending and investment remains strong.
Stocks: A day after President Donald J. Trump announced that his proposed budget would include a generous increase in defense spending by $54 billion, infrastructure shares spiked. Across the infrastructure spectrum, from Martin Marietta Materials, Vulcan Materials, steel manufacturer Nucor, and Caterpillar, each respectively increased by at least two points since the announcement, a good indicator for infrastructure sentiment.
Prior to the announcement, shares were tumbling, with many experts surmising that Trump’s administration would delay an infrastructure bill until 2018, delaying significant federal spending until 2019 at the very earliest.
Funding: With a $1 trillion dollar infrastructure plan to rebuild America’s infrastructure, Trump has yet to identify a clear source or sources for funding. Experts believe a feasible source of funding could come from what is already the nation’s top funding source for transportation projects, the federal gas tax. An increase in the gas tax would help bring in more revenue for projects, but a hike to the gas tax has not been done since the early 1990s.
Gas Tax: PBS’s NewsHour weekend anchor, Hari Sreenivasan interviewed Financial Times editor Ed Crooks about the gas tax and its implications on infrastructure and American life. Crooks remarked a common rebuttal for an increase of tax, commented how people say that if you tax something, you’ll get less of it. His reply: “And it’s probably better to tax fuel consumption and get people to use less fuel, rather than tax wages and have people get less wages or profits.”
Crooks also notes that the biggest and number one problem with raising the gas tax is the distributional impact. “Probably doesn’t hit people right at the bottom, because they tend not to own cars at all. And so, not so much of an issue for them, but certainly for people of lower to middle incomes, it’s a real issue for them.”
Shovel-Ready Projects: Rebuilding infrastructure and President Trump’s pledge of $1 trillion dollar was a key point in the winter meeting of the National Governors Association. The President has garnered 428 projects from governors across the country that are essentially ‘shovel-ready’ projects and could be ready to be made, with a little help from federal funding.
In the coming week: Trump is expected to make a big announcement on infrastructure on Tuesday night. “I’m going to have a big statement tomorrow night on infrastructure,” Trump said. “We spend $6 trillion in the Middle East and we have potholes all over our highways and our roads … so we’re going to take care of that. Infrastructure — we’re going to start spending on infrastructure big. Not like we have a choice. It’s not like, oh gee, let’s hold it off.”