President Trump Will Unveil $1.5 Trillion Infrastructure Plan on Monday

U.S. President Donald Trump will unveil his administration’s long-awaited infrastructure plan on Monday, fulfilling a core campaign pledge. Although the Trump White House is riding a wave of momentum following successful tax reform, the proposed infrastructure blueprint already faces major hurdles in Congress.

Trump Infrastructure Plan

President Trump’s infrastructure plan is said to be worth $1.5 trillion and will rely heavily on state and local spending. The proposal includes $200 billion in federal funding to leverage local and state buy-in to fix roads, highways and airports.

Infrastructure was an important theme in last month’s State of the Union address, Trump’s first since taking office.

“Every federal dollar should be leveraged by partnering with state and local governments and — where appropriate — tapping into private sector investment to permanently fix the infrastructure deficit,” Trump said at the Jan. 30 address.

The plan also seeks to unwind bureaucratic entanglements and speed up the federal permitting process to reduce the amount of time it takes for projects to get approved. Included in the proposal is $50 for rural projects, $20 billion toward public-private partnerships greater support for a financing program known as TIFIA.

Infrastructure spending under the new bill will be carried out over a ten-year period and is part of a broader plan to grow the U.S. economy by at least 3% annually. The Federal Reserve recently upped its forecast for GDP growth on anticipated tax reform; increased infrastructure spending could add to the Fed’s cautiously optimistic outlook.

Polarizing Congress

The Trump administration has faced stiff opposition in implementing its pro-growth agenda. That is unlikely to change on infrastructure given tax cuts, trade imbalances and the recent $300 billion funding deal fueling the nation’s deficit.

Democrats have already signaled their opposition to the bill on grounds that it shifts much of the burden to state and local governments. This sentiment is also shared by the Chamber of Commerce, which would like to see more federal dollars devoted to the plan by way of tax increases.

Democrats are also calling for new revenue measures to be implemented in support of the bill, including raiding the federal gas tax for the first time since 1993. Last week, Congressional Democrats called for $1 trillion in federal spending.

Investors will be watching the infrastructure debate intently over the next few weeks to determine whether pro-growth optimism can sustain the next leg of the bull market after last week’s epic collapse. Stocks shed more than 5% over the previous five days, capping off one of Wall Street’s worst weeks since the financial crisis.

In addition to rolling out the infrastructure blueprint this week, Trump is also scheduled to discuss the proposal with  both Democratic and Republican leaders on Wednesday.

Featured image courtesy of Shutterstock.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi