Revisiting Trump's Infrastructure Plan

During the previous Trump Administration, the comprehensive infrastructure plan aimed to stimulate $1.5 trillion in sustainable investment over 10 years, streamline project approval and permitting, and empower state and local authorities. In six installments, I distilled the broad themes from the 2017 Plan contrasted to the current Administration’s policies.

We will start with the most misunderstood piece of the plan: the $100 billion incentives program. Recognizing that localities are best positioned to understand and address local infrastructure needs, this program aimed to enhance the efficiency and sustainability of infrastructure funding. The proposed incentive grants would have added an additional 20% on top of formula funding and advance grant disbursements. Hence, for this program, once a project had secured $100 million in non-federal revenue, the project could be eligible for up to $20 million via the incentive grant. Eligibility was weighted predominantly on the ability of the project to secure new non-federal funding streams for construction and maintenance. We also included a look-back provision to fairly account for projects that had already pursued a more sustainable funding model.

At the time––and even recently––several prominent congresspeople and news agencies incorrectly stated that the Trump plan flipped the government 80-20 funding model. Traditionally, a project can receive up to 80% of its cost in federal funding. Many misconstrued the Plan to suggest that all federally aided projects would only receive up to 20% funding.

Lesson learned: when crafting legislation, do not use ratios already present in federal law.

Over the last 4 years we have encountered a 71% rise in construction inflation and a net loss in real infrastructure funding. In large part, these staggering figures have resulted from the Biden Administration’s infrastructure bills (IIJA, IRA, and CHIPs Act). These programs take tax-payer dollars, circulate them through a slew of federal regulations, and inject the funds back into a supply-constrained market. This has oriented infrastructure investment away from maintenance, weakening rather than strengthening our infrastructure.

Federal Funding Requirements

Federal restrictions are a key driver in inflating the cost of federally funded transportation projects. Transportation projects receiving federal aid must comply with 94 distinct federal restrictions, including those touching on climate and the environment, procurement, labor, equity, performance, and engineering. On a project level, these obligations require extensive operational and reporting requirements, which drive up costs and delays for the state or local government responsible for delivering the project.

Skeptical?  Take a look at the 94 federal restrictions applied to FHWA’s 2023 RAISE grant agreements

Who Decides: The Impact of Nationalizing Infrastructure Policy

Policy making is challenging because of the plethora of unintended consequences that inevitably attend any change in the status quo.  While it seems intuitive that enhanced federal funding is beneficial for infrastructure, the reality is more nuanced.

George Mason’s Center for the Study of the Administrative State published my paper exploring the nuances of federal funding and describing the hidden costs of nationalizing our infrastructure policy. These costs include diminished quality, misaligned incentives, regulatory burdens, budgetary substitution, and inflation. Even more concerning is the potential for federal funding and control to undermine our constitutional right to petition and seek local redress for local problems.

Why Is It so Hard to Agree on Climate Change?

Why is it so hard to agree on climate change?

Brilliant people have reached sharply divergent views. I took a yearlong journey into understanding climate change, diving into the thicket of probabilistic and cautiously hedged statements published annually by the IPCC.

I read skeptics and independent thinkers about the energy system and environmental policy, from Vaclav Smil and Bill Gates to Bjorn Lomborg and Danny Cullenward.

Now, I’ve written a primer on the issue. It's far from comprehensive, but I've tied key claims back to the IPCC, honed in on points where rich data is available, and highlighted areas of major disagreement.

I’d appreciate your comments and feedback—and I hope it sparks some debate.

Madrus Research: "Fueling the Energy Transition: Trends, Policy Proposals, and Potential Market Impacts"

Fueling the Energy Transition: Trends, Policy Proposals, and Potential Market Impacts

The outcome of the 2020 election will likely result in a significant repositioning of federal policy in favor of renewable and sustainable energy sources. The Biden Administration has set topline objectives of decarbonizing the power sector by 2035 and achieving economy-wide net-zero emissions by 2050. Declining costs of technologies, existing policies, and future legislative and executive action will make progress toward those goals. This paper briefly presents market trends and outlook by asset class, potential policy changes, and the impact such policy changes will have on each asset class.  

How Biden can succeed on infrastructure where Trump did not

Washington, D.C. is developing a tradition: With the start of a new administration comes grand promises of federal solutions to our nation’s infrastructure challenges. Yet from the Obama administration’s “shovel-ready” projects to the Trump administration’s trillion-dollar plan, tangible results have been vexingly scarce.

Starting in January 2017, I spent 15 months in the Trump White House working with hundreds of governors, mayors, county executives, and members of Congress—all of whom were eager to come up with sensible policies to improve our nation’s infrastructure. But the administration’s plan faltered due to several missteps. Now, as President Joe Biden takes his own shot at broad infrastructure reform, his team would do well to understand what went wrong for the previous White House.

What the Election Means for Infrastructure: Three Top Takeaways

After a long campaign season and an election night that stretched weeks, we can now make sense of what this election means for the nation’s infrastructure under President-Elect Joe Biden. To kick off the transition season, this analysis will present the election’s three biggest implications for infrastructure as the new administration prepares to take the reins of power.

Madrus Research featured in special report, "Innovation in Infrastructure Delivery"

Madrus Research is pleased to be a contributor to Institutional Investing in Infrastructure's special report, Innovation in Infrastructure Delivery. The report is sponsored by Cornell University’s Program in Infrastructure Policy and Bernhard Capital Partners and seeks to “simplify extensive research and provide varying perspectives for public officials and private investors to begin dialoguing at a different — and hopefully more advanced — level.” In a piece titled “Harnessing private-sector capital and expertise to move projects forward during recessions,” Madrus Research details how the public sector can leverage private capital to harness savings and other advantages of developing projects during economic downturns.

Madrus Research: "Bridge the Dip: The Advantages of Proactive, Countercyclical Infrastructure Policy"

Madrus Research is pleased to publish our first full-length research paper, “Bridge the Dip: The Advantages of Proactive, Countercyclical Infrastructure Policy.” While infrastructure spending is often mentioned as a way to create jobs during recessions, much less attention is paid to the significant project-level benefits of developing infrastructure during an economic downturn. Our original research quantifies the benefits that state and local governments can accrue by forging forward with infrastructure projects, including lower project costs and higher labor quality. We also present strategies for governments to realize these benefits in the face of fiscal constraints. 

A More Rational Conversation on Environmental Permitting?

In a country awash in divisiveness, it is increasingly important to identify when policy conversations are trending towards being more thoughtful and less visceral. One glimmer of progress can be found in the coverage of the Administration’s release of a final rule intended to modernize the environmental review process under the National Environmental Policy Act (NEPA).