Trump Budget Would Cut Some Construction Accounts, Spare Others
Hit list includes TIGER grants, new transit starts, rural water grants and loans
President Trump has proposed sharp cuts in non-defense federal agencies for fiscal year 2018, targeting some specific construction programs for elimination but sparing others. But it will be up to congressional appropriations committees to produce the final numbers, as senior appropriators emphasized in statements after the budget's release.
Office of Management and Budget Director Mick Mulvaney says the cuts to infrastructure programs were intentional, adding that the administration plans to use those funds for "more efficient" programs in the president's infrastructure investment program, which he says will be issued later in 2017.
Trump's 53-page budget "blueprint," released on March 16, proposes to slice Dept. of Transportation spending by $2.4 billion, or 13%. It would kill the popular TIGER grant program for highway, rail, transit, port and other types of transportation projects and end federal funding for Amtrak long-distance service.
It also aims to bar federal dollars for any new public-transit starts that have not yet achieved full-funding grant agreements with DOT. In a dramatic shift from decades of federal transit policy, the budget says, "Future investments in new transit projects would be funded by the localities that use and benefit from these localized projects."
American Public Transportation Association Acting President and CEO Richard White said the group is "surprised and disappointed" that the administration is calling for major transportation cuts and plans a significant infrastructure initiative. White said more than 50 transit projects in 23 states could be at risk if they don't get full-funding agreements (see Federal Transit Administration list, via APTA).
"There are a lot of projects in the pipeline that don't have full-funding grant agreements yet that clearly have support with members of Congress," an industry official says.
Cuts have been proposed in the past for programs such as TIGER and Amtrak, "and Congress has always restored them," the source adds. "But … it's not business as usual [now], and we don't know that we can just assume Congress will restore them—and Congress has so many cuts to restore."
On the other hand, the proposal would retain the 2015 FAST Act's competitively awarded FASTLANE grants for key highway and freight projects, which are authorized to get $900 million in 2018.
The budget doesn't mention the largest federal construction account, the federal-aid highway program, or the Highway Trust Fund. The Transportation Construction Coalition, which includes about 30 construction and labor-union groups, said it is disappointed the blueprint did not include a plan to solve the trust fund's revenue problem. The coalition said, "The budget was a missed opportunity to address the chronic funding shortfalls that regularly threaten to undermine road, bridge and transit repair programs."
Brian Turmail, spokesman for the Associated General Contractors of America, said in an email, "Looked at in the absence of any broader infrastructure plan, it is hard not to view proposals to eliminate programs like the TIGER grants and wonder how such cuts are consistent with the President's oft-repeated pledge to invest in infrastructure."
He added, "Like many others, we are eager to see how this budget fits into the broader context of the president's infrastructure plans before passing final judgment."
OMB's Mulvaney told reporters in a briefing on March 15 that the cuts in DOT and other infrastructure programs were "done intentionally," adding that administration officials “believe those programs to be less efficient than the infrastructure package that we're working on for later on this year."
Mulvaney said, "So, what we've effectively done is try to move money out of existing, more inefficient programs and hold that money for what we expect to be more efficient infrastructure programs later on."
Proposed Corps, EPA cuts
The infrastructure cutbacks go beyond transportation. Trump also is proposing to cut the Army Corps of Engineers' civil-works budget by $1 billion, or 16%. But the plan doesn't specify which Corps accounts would be trimmed or by how much.
The deepest percentage reduction among important construction agencies would hit the Environmental Protection Agency. The president wants to slash EPA spending by $2.3 billion, or 31%.
Within the $5.7-billion EPA total, the Superfund would be cut 29%. But water-related state revolving funds (SRFs) would get a tiny $4-million increase, to a total of $2.3 billion. The National Association of Clean Water Agencies (NACWA) says that, while the blueprint doesn't specify how the $2.3 billion would be split betwen drinking-water and wastewater-treatment funds, "the strong support for the SRFs overall is a positive sign."
NACWA also was pleased to see $20 million—the same amount as this year—included in the budget for Water Infrastructure Finance and Innovation Act (WIFIA) federal loans. That direct federal spending could support $1 billion in WIFIA loans, the budget says.
But the budget more than offsets the EPA's SRF increase by deleting the Agriculture Dept.'s rural water and wastewater grants and loan program, funded this year at a rate of $498 million. The budget calls the rural water program "duplicative" and says rural localities can seek private funding or aid from other federal programs, such as the EPA's SRF.
But Scott Slesinger, legislative directore at the Natural Resources Defense Council, in a conference call with reporters noted that ending the Agriculture Dept.'s water program will harm rural localities. He says Agriculture's program was established outside of the EPA "because these small communities couldn't compete in priority lists in the states to get money under the regular EPA state revolving loan funds."
The American Institute of Architects also is concerned about the proposed EPA reductions, President Thomas Vonier said in a statement. "We are ready to protect investments that affect the work we do on behalf of our clients," Vonier said. AIA coordinated a March 16 letter to EPA Administrator Scott Pruitt, urging him "to preserve and protect vital programs."
The letter, signed by nearly 800 design and construction firms, cited EPA's Energy Star program, which focuses on energy efficiency in buildings; it is marked for elimination in the budget. The industry letter pointed to Energy Star's Portfolio Manager software and Target Finder online calculator as critical tools for tracking and evaluating buildings' energy and water use.
The State Dept.-U.S. Agency for International Development budget would be trimmed by $10.1 billion, or 28%, but the proposal also seeks $2.2 billion for embassy construction and maintenance. The 2016 level for that activity is about $1.5 billion.
How will the budget proposal fare in Congress? Turmail said, "We expect it will provoke serious and substantial conversations on Capitol Hill about the best way to invest taxpayer funds within the various discretionary programs."
He added, "That being said, Congress has traditionally treated presidents' suggested budgets as just that—suggestions—and it is hard to see why Congress would deviate from that practice this year."
Top appropriators made that point. House Appropriations Committee Chairman Rodney Frelinghuysen (R-N.J.) said in a statement: "As directed under the Constitution, Congress has the power of the purse. While the president may offer proposals, Congress must review both requests to assure the wise investment of taxpayer dollars."
Frelinghuysen added, "I'm optimistic that we can strike a balance that will enable us to fund the federal government responsibly and address emergency needs while ensuring this legislation will clear the Congress."
The House committee's top Democrat, Nita Lowey (N.Y.), noted that the GOP probably will need Democrats' votes to pass the appropriations bills. She said of the Trump blueprint generally, "If enacted into law, these cuts would have a disastrous impact on job security; health; safe, clean, and secure communities, and American leadership around the world."
Trump also sent Congress a supplemental appropriations request for the current fiscal year, which ends on Sept. 30, including an initial $1.4-billion installment toward a wall along the U.S. border with Mexico, which was one of Trump's top campaign promises.
The 2017 request includes $999 million "for planning, design and construction of the first installment of the border wall, $179 million for access roads, gates, and other tactical infrastructure projects, and $200 million for border security technology deployments."
Lowey called the funds for the wall "a nonstarter" and "a multiyear, multibillion-dollar boondoggle."
Trump's 2018 proposal includes $2.6 billion for the border wall as well as "tactical infrastructure and border-security technology." The budget document says, "This investment would strengthen border security, helping stem the flow of people and drugs illegally crossing the U.S. borders."