On March 1, 2018, the Senate Committee on Environment and Public Works (EPW) held the first congressional hearing on President Trump's Framework for Rebuilding America, which was released on February 12. Earlier this week, two key Senate Republican leaders identified a crowded agenda and lack of a funding/revenue source as obstacles to action on infrastructure legislation.

However, in his opening statement, Committee Chairman John Barrasso (R-WY) said that "this committee has historically taken the bipartisan lead on infrastructure issues in the Senate" and expressed his belief that "we can work in a bipartisan way" on infrastructure legislation. Noting the needs for a "significant investment" in infrastructure, Chairman Barrasso touted the framework's proposals to prioritize the streamlining of permitting and speed up project delivery by limiting federal reviews to no more than two years. He also praised the President's plan for designating funds specifically for rural states and communities.

Ranking Member Senator Tom Carper (D-DE) initially echoed Senator Barrasso's bipartisan tone, noting that "I believe areas of agreement do exist," but elaborated in his opening remarks on significant policy concerns with the Administration's proposal, including:

— Limiting the federal share of project costs to 20%

— Incentivizing grant awards based on the percentage of non-federal money contributed

— "Sweeping rollbacks" of environmental protections

— Neglecting to address the growing revenue shortfall in the Highway Trust Fund

— Failure to identify revenue "pay-fors" to offset infrastructure spending

Senator Carper expressed particular skepticism about the framework's core premise that $200 billion of federal incentives would be the catalyst for $1.5 trillion of infrastructure investments. He cited an economic modeling study of the proposal by the Wharton School at the University of Pennsylvania, which concluded that "total new infrastructure investment would increase between $20 billion to $230 billion, including the $200 billion federal investment," resulting in "little to no impact on the economy." Carper also said that "it is hard to take this Administration's proposal to spend $200 billion on infrastructure seriously when it's paired with a budget [FY 2019 request] that would cut $240 billion from existing infrastructure programs."

Transportation Secretary Elaine Chao's testimony described the broad scope of the President's infrastructure initiative as applying to 12 federal agencies and including drinking and wastewater, energy, broadband, and veterans hospitals as well, with transportation being only one component. She stated that the "guiding principles" included using $200 billion as "seed money" to incentivize $1.5 trillion in infrastructure investment and, in response to Senator Carper's remarks, said that the Administration "disagreed" with the Wharton study's conclusions that the net new investment generated by the plan would be de minimis.

Secretary Chao also highlighted the plan's principles of streamlining permitting to speed up project delivery and reducing unnecessary and overly burdensome regulations. In response to Chairman Barrasso, the Secretary said that speeding up project approvals would also encourage investments by the private sector. While acknowledging that there are "some good ideas" in the Administration's permitting reform proposals, Senator Carper pointed out that Congress has already enacted authorities for streamlining decisions in recent highway bills and that DOT has not fully implemented those provisions.

Assistant Secretary of the Army for Civil Works R.D. James, who administers the U.S. Army Corps of Engineers, said that the "traditional" approach to constructing and maintaining navigation and other projects is not sustainable. The legislative principles applicable to the Corps in the President's plan included measures to remove barriers to expedite delivery of infrastructure projects and incentives for non-federal partnerships. He specifically highlighted the Water Infrastructure Finance and Innovation Act (WIFIA) low-cost loan program which the administration proposes to be expanded to include non-federal flood mitigation, navigation, and water supply projects.

The Senate Finance Committee has jurisdiction over federal fuels taxes. Senator Carper, who also is a member of Finance, addressed the politically contentious issue, stating that "several of us were in the meeting with the President last month when he repeatedly declared his strong support for a 25 cent per gallon increase in the federal gas tax on gasoline and diesel fuel. That could become one important additional source of funds to help us pay for the improvements we need." Further, he opined that "if the President is serious" there would be bipartisan support for generating additional revenue and "we can do a deal."

Secretary Chao declined to confirm that the President supports a fuels tax increase and said that Senators should ask the White House for clarification.

Witness testimony and opening statements by Chairman Barrasso and Ranking Member Carper are attached.

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ATTACHMENTS

Barasso Statement

Carper Statement

Chao Testimony

James Testimony