President Donald Trump on Monday said he would focus this week on pushing for U.S. infrastructure projects to rebuild or modernize the nation’s roads, bridges, dams and broadband lines. He had pledged during his presidential campaign to spend $1 trillion on public works projects.
A key question remains unanswered, according to The Wall Street Journal: How will Trump get private investors to put up most of the money for these projects?
“There has so far been little detail on Mr. Trump’s lofty infrastructure promise,” the newspaper reported. “Trump’s advisers say they can get private investors to put up the capital for such projects by curtailing permitting requirements and regulations, and by offering incentives to states and cities to turn to the private sector for financing.”
The president on Monday described a plan to privatize the U.S. air-traffic control system to improve safety and modernize a vital part of the country’s transportation industry.
Private-equity executives and bankers who focus on infrastructure investments told the WSJ that raising money isn’t a problem, it’s finding money-making projects. Investors worldwide committed a record $59 billion to private infrastructure funds last year, bringing their total to $140 billion, according to data compiled by Preqin. Much of that much money will go to energy projects outside the U.S.
State and local governments are more likely to sell municipal bonds to raise money for projects, Heidi Crebo-Rediker, an adjunct senior fellow at the Council on Foreign Relations who served in the Obama administration, said to the WSJ.
Blackstone Group LP last month said Saudi Arabia agreed to put $20 billion in an infrastructure fund that may have spending power of $100 billion with debt.
White House economic adviser Gary Cohn said governors and mayors will meet with Trump at the White House on Thursday for a listening session focused on the efficient use of tax dollars for infrastructure projects, Time magazine reported.
On Friday, Trump will visit the Transportation Department to discuss regulatory changes for roads and railways.
Democrats have warned that the Trump budget cuts other kinds of infrastructure spending, including Amtrak subsidies, an infrastructure investment program started under Obama and the Highway Trust Fund. Democrats are also wary of Trump’s plan to use public-private partnerships to provide funding for projects.
"It doesn't matter who you are, whether you are farmer in the Midwest, or a mother driving your kids to and from school, or a worker or a college kid flying back and forth to school, you're affected by infrastructure," Cohn said this week in a conference call with reporters. The country was "falling behind, and the falling behind is affecting economic growth in the United States. The president wants to fix the problems and he doesn't want to push these liabilities into the future."
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