President Donald Trump's infrastructure plan released Monday calls for the federal government to spend $200 billion that the White House said would spur at least $1.5 trillion in investments from state and local government and the private sector.
The plan also calls for returning decision-making authority to state and local governments, streamlining permits and reducing regulatory barriers. A new "one agency, one decision" approach for environmental reviews would shorten them to two years, and transportation projects with minimal federal funding would have less federal oversight under the plan.
"We will build gleaming new roads, bridges, highways, railways and waterways all across our land," Mr. Trump said in a statement.
Half of the $200 billion would go into a new incentives program giving grants to state and local government projects that attract additional investment, and would include credit for some past projects if they generate revenue. Those funds would be administered by the Department of Transportation, U.S. Army Corps of Engineers, and the Environmental Protection Agency.
Another $20 billion would go toward expanding infrastructure financing programs, with $14 billion for existing credit programs, and $6 billion to expand private activity bonds. Another $50 billion would be targeted to investments in a new rural infrastructure program that gives state governors flexibility. The remainder would go to various other programs, many of which would not call for private-sector investing.
American Investment Council President and CEO Mike Sommers said in a statement that private equity investors of all sizes have "record levels of dry powder on hand" to invest in infrastructure. "Public-private partnerships are a proven method to bring much-needed financing to large-scale projects, and private equity firms have long been a part of these successful collaborations," Mr. Sommer said.
The $200 billion price tag would have to be offset by other program cuts such as mass transit, which have not won congressional approval, and Democrats in Congress are promoting their own plan that calls for larger amounts of federal infrastructure spending.
Approval of the plan would likely lead to more project financings and public debt issuance, said Kurt Krummenacker, senior vice president at Moody's Investors Service, in a statement. However, the impact in the next year or two would be modest, "given the challenges of enacting bipartisan legislation, defining revenue sources to service incremental debt, and the numerous planning and development requirements of launching new infrastructure projects."