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April 25, 2017 Update
prepared by CATHY CONNOR - DIRECTOR OF FEDERAL GOVERNMENT AFFAIRS
Congress is back in session after a two-week recess. The most immediate concern they must address is that the current short-term Continuing Resolution (CR), which is funding the federal government, expires this Friday, April 28. As of this morning, there is no clear resolution in sight which raises the possibility of a government shutdown. The potential options Congress can take to avoid a shutdown include passing:
A year-long CR which would fund the government through the end of FY'17 - September 30, 2017 - but at generally lower FY'16 funding levels.
A number of actual FY'17 federal agency appropriations bills, including the THUD (US DOT) funding bill, as part of an omnibus package.
Passage of some actual FY'17 appropriations bills did not occur before the recess because of congressional concern - from many members of both parties - that the Trump Administration was insisting on attaching funding for construction of the Mexican border wall and additional DOD funding. However, as of yesterday, the Administration has somewhat backed off on the need for immediate funding for the wall which may allow an omnibus appropriations package to proceed.
There has been no additional information provided by the Administration on the timing of the release of its formal, detailed budget recommendations for FY'18. Previous statements by OMB Director Mick Mulvaney indicated a release by early to mid-May.
In several public statements last week, President Trump said he plans to make a major announcement tomorrow regarding his tax reform plan. However, many observers believe it is likely the announcement will be more of a broad statement of principles and less of a list of specific details. In addition, it is expected that the Administration's tax plan is likely to differ - perhaps substantially - from the tax blueprint which the House Republican leadership has been promoting. There have been no indications if the White House's tax plan will include funding or tax changes related to infrastructure.
There has been no further information released by the Administration about an infrastructure package. US DOT Secretary Chao previously indicated a plan might be released in mid-May, leading some to believe it could be unveiled during Infrastructure Week - the week of May 15, but more recently Chao was quoted as saying "this summer". The effort could be pushed back if the Administration decides to take another run at healthcare reform.
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Members of Congress have headed back home to their states and districts for a two-week spring recess. They will return to work on April 25. That is only a few days before April 28 when the current short-term Continuing Resolution (CR) which funds the government expires. While it is possible that this could result in a government shutdown, it appears that both parties want to avoid that outcome. It is likely that Congress will pass another very short-term CR - perhaps lasting a week or two - while they finalize a plan to fund the remainder of FY'17. As discussed at length in the March 28 Washington Update, Congress can opt to pass a year-long CR which would fund the government through September 30 at the FY'16 levels or pass some individual FY'17 funding bills, including the THUD (US DOT) bill, as part of an omnibus package of bills. Congress may opt to go with a year-long CR in order to avoid pressure from the White House to use an omnibus FY'17 appropriations bill as a vehicle for $1.4B in funding to build the border wall between the US and Mexico.
After the recess, congressional leaders will have to decide whether to try to bring up healthcare reform once again - perhaps using infrastructure funding as a "sweetener" per President Trump, move on to consider a major tax reform bill - which could incorporate a funding source for an infrastructure bill, or start to craft a stand-alone infrastructure bill.
In mid-March, the Trump Administration released a so-called "skinny" budget for FY'18 which begins on October 1, 2017. The limited budget focused primarily on programs recommended to be cut or eliminated. A full budget request is expected to be released in mid-May. In the meantime, Congress has begun its efforts to draft an FY'18 Budget Resolution and the 12 FY'18 federal agency funding bills.
While it is anticipated that Congress will not accept the Administration's recommendations to eliminate funding for such popular transportation and infrastructure programs as TIGER, transit Capital Improvement Grants (CIG) that don't have Full Funding Grants Agreements (FFGAs), and Amtrak service outside the Northeast Corridor, industry stakeholders and project sponsors are not taking any chances and have been voicing strong opposition.
Thirty three US Senators signed a letter to the leadership of the Appropriations Committee opposing cuts to the transit CIG program and over 90 House members wrote a similar letter to the House Appropriations Committee. Local elected officials and key business leaders are weighing in with Congress in support of funding for critical local projects.
While no plan has been unveiled yet for President Trump's $1T infrastructure proposal, both the President and US DOT Secretary Elaine Chao discussed various aspects of a potential plan on several occasions last week, particularly in a Trump interview with the New York Times and at a White House CEO Forum which both Trump and Chao spoke at.
Some key points they made are highlighted below:
President Trump -
Secretary Chao -
Administration Personnel News
Last week, the Senate Commerce Committee approved the nomination of Jeffrey Rosen to be US DOT Deputy Secretary. It was a close partisan vote of 15 to 12. Only one Democrat voted to approve Rosen. Senator Corey Booker (D-NJ) voted against the nomination because of "Rosen's lack of commitment to supporting funding for New Starts and other critical programs for our nation's infrastructure, including the Gateway Program." Here is a link to Rosen's bio.
The Administration has announced its intention to nominate Derek Kan to be the US DOT Under Secretary for Policy, the number 3 position at the Department. Based in Los Angeles, Kan is currently the General Manager of Lyft, the ride-sharing company. He was named by President Obama as a Republican nominee to the Amtrak Board and confirmed by the Senate in December 2015. He previously served as Director of Strategy at a biotech startup, Consultant at Bain & Company, Advisor at Elliott Management, Policy Advisor to Senate Republican Leader Mitch McConnell and the Chief Economist for the Senate Republican Policy Committee. He began his career as a Presidential Management Fellow at the White House Office of Management and Budget. He earned his BS from the University of Southern California, MSc from the London School of Economics, and MBA from the Stanford Graduate School of Business.
Russ Vought, formerly vice president of grassroots outreach for Heritage Action for America and a member of the Trump transition team, has been nominated to serve as deputy director of OMB, the White House announced Friday. Many of the cuts proposed for transportation, EPA, and other infrastructure programs in the Administration's FY'18 "skinny" budget were originally proposed by Heritage Action, a fiscally conservative think tank.
No other US DOT nominations have been announced to date including for the Administrators of FHWA, FTA, FRA, etc.
MPO Rulemaking - Following passage by the full Senate, the House T&I Committee has voted to repeal the December 2016 final rule from US DOT that would require many local metropolitan planning organizations (MPOs) in the same region to merge. The rule, "Metropolitan Planning Organization Coordination and Planning Area Reform", was broadly unpopular with MPOs and other stakeholders - during the public comment period, only 16 commenters supported the rule while 299 opposed it. The full House is expected to take up and pass the repeal (HR 1346) in May.
FAA Reauthorization -There has been no movement on a bill to reauthorize the FAA despite the fact that the short-term extension of aviation authorization expires on September 30, 2017. Controversy over House T&I Committee Chairman Bill Shuster's plan to privatize the Air Traffic Control (ATC) system has not abated. The Trump Administration included a recommendation to move the ATC out of the FAA in its FY'18 "skinny" budget, however, strong opposition to the plan continues. In related news, Rep. Peter DeFazio (D-OR), the senior Democrat on the House T&I Committee, has introduced a bill to increase the cap on the Passenger Facility Charge (PFC), which is used by airports to fund capital improvements.
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Last week was a very busy one for Congress and the Trump Administration - SCOTUS confirmation hearings, discussions on both the FY'17 and FY'18 budgets, and, of course, the decision to pull the healthcare reform bill. Many observers are concerned that other Trump legislative priorities, such as the $1T infrastructure initiative and the tax reform bill that is needed to fund such a plan, may be postponed indefinitely while congressional Republicans regroup and the White House finds its footing again. However, others believe that this is an opportune time for the President to work with Democrats to craft a bi-partisan infrastructure bill that could be a win for all sides.
FY'17 began on October 1, 2016 - over six months ago. Congress has not been able to pass any FY'17 federal agency appropriations bills. In the meantime, federal agencies are operating under a temporary Continuing Resolution (CR) which expires on April 28. Under the current CR, all US DOT and other infrastructure programs are funded at FY'16 funding levels. Since Congress will be on recess for two weeks in mid-April they will most likely have to act by April 7 in order to avoid a government shutdown.
Congress has two options. One is to pass a year-long CR which will fund the remainder of FY'17 (through September 30, 2017) at the typically lower FY'16 levels. However, there is a rumored possibility that a year-long CR might include an "anomaly" to fund Highway Trust Fund programs at the higher FY'17 FAST Act authorized levels. There may also be an "anomaly" to provide the $199M in FY'17 funding for Positive Train Control (PTC) implementation.
Or Congress can pass actual FY'17 appropriations bills which for most programs would provide higher levels of funding than in FY'16. Congressional staff has indicated that a FY'17 THUD (US DOT) appropriations bill has been reconciled and is ready to go, although the funding details have not been made public. It is now up to congressional leaders to decide whether to bring the bill to the floor - likely as part of a "omnibus" package with other agency bills - or simply extend the CR yet again. This decision will likely be made at the highest leadership levels based on national politics and legislative priorities, not on the merits of the individual bills.
However, to further complicate matters, late on Friday, the Trump Administration opted to send recommendations to Congress on cuts they want in FY'17 domestic discretionary programs. This is in addition to the FY'18 budget recommendations the Administration sent to Congress two weeks ago (see below). The Administration's proposed cuts for FY'17 are very, very unlikely to occur since, as noted above, Congress has generally already agreed on funding levels for FY'17. The Administration recommendations include "reduction options" for only two US DOT programs. First, it proposes to eliminate all FY'17 TIGER funding (FY'16 funding was $500M).
Second, the Administration recommends providing only $1.7B for transit Capital Improvement Grants (CIG) which is only enough to fund projects with existing Full Funding Grant Agreements (FFGAs). The CIG program (New Starts, Small Starts, and Core Capacity projects) is authorized in the FAST Act at $2.3B for FY'17. There are currently 55 projects at some point in the CIG pipeline. Perhaps more disturbing, the Administration proposes "to suspend additional projects from entering the program and believes localities should fund these localized projects". This language appears to say that the Administration will not sign any new FFGAs, including potentially for prominent CIG projects such as the Maryland Purple Line (a P3 project), CALTRAIN electrification (has implications for CAHSR), NJ/NY Gateway (a critical regional project), Indianapolis Red Line, Minneapolis SW line, and Dallas DART.
Despite the funding uncertainty, at this time, FTA staff is urging project sponsors to continue to work to move projects through the CIG pipeline. See more on CIG grants below.
The FY'18 fiscal year begins on October 1, 2017. The Trump Administration is not expected to release a full FY'18 budget recommendation until early May. In the meantime, two weeks ago it released a so-called "skinny" budget. The budget only references funding levels for a very limited number of programs with a focus on domestic discretionary programs. In the case of US DOT, there is no mention in the "skinny" budget of any so-called "mandatory" programs funded through the Highway Trust Fund, such as highway and transit formula programs, TIFIA, and FASTLANE grants. The assumption is that these programs will be recommended for full funding when the formal budget is released in May.
The "skinny" budget proposes to terminate FY'18 funding for TIGER grants, FTA Capital Improvement Grants (CIG) except for projects with existing Full Funding Grant Agreements (FFGAs), Amtrak's long distance service, and the Essential Air Service (EAS) program for rural airports. The budget also proposes significant cuts to federal agency personnel. Here is a link to a press release issued by US DOT Secretary Elaine Chao in support of the Administration's budget request.
However, the Administration can only recommend funding levels. It is up to Congress to determine actual funding. TIGER, CIG, Amtrak, and EAS are very popular programs with Congress. While many Republican members will want to support the President, many others will want to support their own funding priorities and protect popular local projects. House members, in particular, will be mindful that they need to get reelected in 2018.
Many observers have pointed out that there seems to be a disconnect between the recommended funding cuts and President Trump's promise of a $1T infrastructure bill. However, the Administration has indicated that it wants to cut what it views as inefficient and ineffective programs and use the savings to fund what it considers to be more valuable programs in a subsequent infrastructure proposal. The rationales given by the Administration for the cuts include: state and local governments should manage and fund these programs, the federal government should not be funding or subsidizing projects that don't have regional or national impacts, the private sector could more effectively deliver the programs, and the programs are duplicative of other programs i.e. TIGER and FASTLANE.
Industry associations and stakeholders, project sponsors, state and local elected officials, and supportive members of Congress have begun major lobbying efforts to protect and defend the CIG, TIGER, and Amtrak programs, in particular. Here is a link to a "Dear Colleague" letter that is being organized in the House by Rep. Earl Blumenauer (D-OR) to urge the appropriators not to cut funding for the CIG program.
Before the Obama Administration left office it issued FY'17 Notices of Funding Opportunities (NOFOs) for two discretionary grant programs - Positive Train Control (PTC) and FASTLANE. Applications were received for both programs, but grants were never announced. Until Congress approves funding for the entirety of FY'17, these grants cannot be released. It is generally expected that Congress will include the $199M authorized for the PTC program in whatever funding it passes for FY'17. It is anticipated that US DOT will announce the grants shortly thereafter because the selection criteria the Obama Administration used was based solely on the statute, only one year of funding was authorized, and the funding is for critical rail safety projects.
The FASTLANE grants also cannot be released until all the FY'17 funding has been appropriated - $850M was authorized for FY'17 in the FAST Act. FASTLANE grants are aimed at nationally and regionally significant multi-modal freight and highway projects. It is possible that the Trump Administration may opt to "rebrand" the program and establish new selection criteria more in line with its priorities (such as private sector participation) rather than the Obama Administration's priorities. It could opt to reissue the NOFO and request updated project information or even new or revised applications. The President's FY'18 "skinny" budget request does not address FY'18 funding for FASTLANE grants which are authorized in the FAST Act at $900M. FASTLANE grants are funded from the Highway Trust Fund, not with general funds, and therefore appear to be protected.
US DOT also cannot release FY'17 funding for the popular TIGER grants until a full years funding is in place. Despite the Trump Administration's recommendation to cut all funding for TIGER in both FY'17 and FY'18, we expect Congress to fund the program at approximately the same level as in FY'16 - $500M. Many key congressional leaders are big fans of the TIGER program since critical projects in their states/districts have previously won TIGER grants. The Obama Administration, which essentially created the TIGER program in the 2009 ARRA economic stimulus act, did not release a NOFO for FY'17 TIGER grants before it left office. It is likely that the Trump Administration, assuming they proceed with a TIGER NOFO, will want to rename this program and refocus the criteria towards its priorities, such as P3 projects, and away from Ladders of Opportunity and other Obama priorities.
Yesterday, Attorney General Jeff Sessions announced that the Justice Department will begin to implement a recent Trump Administration Executive Order by requiring local and state governments to comply with federal provisions regarding so-called sanctuary cities before those jurisdictions can receive or remain eligible for certain federal grants. He said the department would withhold, and potentially claw back, grants to sanctuary cities and other localities that are not in compliance with federal immigration law. It is unclear at this time if transportation or other infrastructure grant funds would be affected. It is also unclear how the program would be implemented since there is no formal definition of what comprises a sanctuary city and local designations vary greatly.
On March 29, the Senate Commerce Committee will hold a confirmation hearing on the nomination of Jeffrey Rosen to be the US DOT Deputy Secretary. No other US DOT nominations have been announced. Here is a link to Rosen's bio.
Last week, US DOT/FHWA postponed for a second time the effective dates of two final MAP 21/FAST Act performance management rules - for pavement and bridge condition and for freight movement, congestion mitigation and air quality. The rules, which were finalized in the last days of the Obama Administration, were initially postponed for 60 days (until March 21) under guidance from the Trump White House to freeze pending and new regulatory actions government-wide to allow new department heads to review them. This FHWA notice postpones the effective date for another 60 days, to May 20. The additional extension also applies to several other US DOT regulations, including rail and safety regulations, finalized by the Obama Administration.
Infrastructure Week - this year Infrastructure Week will be held the week of May 15. Here is a link to information about the schedule of events in DC and around the country as well as the list of over 184 organizations who are participating in the week's activities.
Recent publications of interest:
ASCE 2017 Infrastructure Report Card - link
APTA Industry Footprint - a breakdown of APTA members, including business members e.g. manufacturers and suppliers, by state and congressional districts, which can be used in efforts to educate members of Congress about local economic development impacts and job creation linked to CIG projects - link
Amtrak Report on the Economic Benefits of Investment in the (NY/NJ) Gateway Program - link
ARTBA 2017 Bridge Report - includes a state by state report on deficient bridges - link
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This morning, the Trump Administration released an initial outline of its FY'18 budget recommendations which call for significant cuts in domestic discretionary programs. Typically administrations submit their annual budget requests to Congress in early to mid-February. However, new administrations generally need extra time to develop their budget priorities. In this case, because of the major changes in spending priorities that the Trump Administration plans to propose, a detailed budget is not expected to be released until late April or early May. In the meantime, a so-called "skinny budget" is being released today.
It is important to keep in mind that the Administration can only recommend federal agency funding levels. It is up to Congress to pass an FY'18 budget resolution and the 12 annual federal agency appropriations bills. While the Republican majority in Congress will certainly want to support President Trump, it is very likely many Members of Congress, not just Democrats, will have their own budget priorities and will fight to protect local programs and projects. While it is too early to predict whether the Trump budget will be DOA, as many previous administration budgets have been, it is certain that Congress will not accept the recommendations without significant changes.
The programs that are taking the biggest hits in the Trump budget are those in the domestic discretionary program category with the deepest cuts proposed for environment, labor, agriculture, and foreign aid programs. Fortunately, at this time, mandatory programs, such as the highway and transit programs funded through the Highway Trust Fund as well as the Airport Improvement Program (AIP), are protected. In the transportation sector, the biggest cuts are proposed for those programs funded with general revenues, not through the HTF, such as Amtrak, FTA Capital Improvement Grants (CIG), and TIGER grants. CIG programs include New Starts, Small Starts and Core Capacity grants. The plan proposes to cut $2.4B from US DOT discretionary programs overall.
The budget proposes to limit CIG grants to only those projects with existing Full Funding Grant Agreements (FFGAs). Future investments in new transit projects would be funded "by the localities that use and benefit from these localized services". It proposes to eliminate federal funding for Amtrak's long distance trains. It eliminates funding for the highly popular TIGER discretionary grant program. TIGER was funded at $500M in FY'16. It supports legislation to authorize the highly controversial proposal to shift FAA's Air Traffic Control (ATC) function to the private sector.
Fortunately, the CIG and TIGER programs, in particular, and Amtrak to some degree, enjoy significant support in Congress from members whose districts/states are recipients of these grants.
Proposed cuts to critical transportation and other infrastructure programs seems to be a significant disconnect with President Trump's commitment for $1 Trillion for infrastructure investment.
Information about the funding proposals for other federal infrastructure programs will be sent out shortly.
Here is a link to the "skinny budget - "America First - A Budget Blueprint to Make America Great Again". See pages 35 and 36 for information about the proposed transportation budget. Here is the text of that section:
The Department of Transportation (DOT) is responsible for ensuring a fast, safe, efficient, accessible, and convenient transportation system that meets our vital national interests and enhances the quality of life of the American people today, and into the future. The Budget request reflects a streamlined DOT that is focused on performing vital Federal safety oversight functions and investing in nationally and regionally significant transportation infrastructure projects. The Budget reduces or eliminates programs that are either inefficient, duplicative of other Federal efforts, or that involve activities that are better delivered by States, localities, or the private sector.
The President's 2018 Budget requests $16.2 billion for DOT's discretionary budget, a $2.4 billion or 13 percent decrease from the 2017 annualized CR level.
The President's 2018 Budget:
Initiates a multi-year reauthorization proposal to shift the air traffic control function of the Federal Aviation Administration to an independent, non-governmental organization, making the system more efficient and innovative while maintaining safety. This would benefit the flying public and taxpayers overall.
Restructures and reduces Federal subsidies to Amtrak to focus resources on the parts of the passenger rail system that provide meaningful transportation options within regions. The Budget terminates Federal support for Amtrak's long distance train services, which have long been inefficient and incur the vast majority of Amtrak's operating losses. This would allow Amtrak to focus on better managing its State-supported and Northeast Corridor train services.
Limits funding for the Federal Transit Administration's Capital Investment Program (New Starts) to projects with existing full funding grant agreements only. Future investments in new transit projects would be funded by the localities that use and benefit from these localized projects.
Eliminates funding for the Essential Air Service (EAS) program, which was originally conceived of as a temporary program nearly 40 years ago to provide subsidized commercial air service to rural airports. EAS flights are not full and have high subsidy costs per passenger. Several EAS-eligible communities are relatively close to major airports, and communities that have EAS could be served by other existing modes of transportation. This proposal would result in a discretionary savings of $175 million from the 2017 annualized CR level.
Eliminates funding for the unauthorized TIGER discretionary grant program, which awards grants to projects that are generally eligible for funding under existing surface transportation formula programs, saving $499 million from the 2017 annualized CR level. Further, DOT's Nationally Significant Freight and Highway Projects grant program, authorized by the FAST Act of 2015, supports larger highway and multimodal freight projects with demonstrable national or regional benefits. This grant program is authorized at an annual average of $900 million through 2020.
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On Tuesday, President Trump addressed a joint session of Congress and laid out his vision and priorities for the country. He mentioned one of his longest standing commitments - a $1 trillion infrastructure plan, but provided no additional details on specifics, funding, or timing other than to say that his plan would include both public and private funding.
Below is the extent of his comments on infrastructure:
"Another Republican President, Dwight D. Eisenhower, initiated the last truly great national infrastructure program - the building of the interstate highway system. The time has come for a new program of national rebuilding. America has spent approximately six trillion dollars in the Middle East, all this while our infrastructure at home is crumbling. With this six trillion dollars we could have rebuilt our country - twice. And maybe even three times if we had people who had the ability to negotiate.
To launch our national rebuilding, I will be asking the Congress to approve legislation that produces a $1 trillion investment in the infrastructure of the United States -- financed through both public and private capital - creating millions of new jobs.
This effort will be guided by two core principles: Buy American, and Hire American."
At the end of speech, he added, "Crumbling infrastructure will be replaced with new roads, bridges, tunnels, airports and railways, gleaming across our very, very beautiful land."
Here is a link to the statement on infrastructure which the White House released in conjunction with the address to Congress. It primarily addresses pipelines.
President Trump's mention of both public and private funding in his speech to Congress is particularly noteworthy because of concerns by industry stakeholders and many Members of Congress (especially those from rural areas) that the infrastructure plan may depend heavily or even exclusively on private financing in the form of tax credits for investors or P3 projects, rather than on long-term, sustainable federal funding. In early February, several hundred industry groups, including various state chapters, sent a letter to President Trump urging him to "provide real revenue for the Highway Trust Fund that will help the users and beneficiaries of America's transportation and freight network. Private financing, while important and needed, cannot replace the role of public funding and federal leadership." The letter was organized by the US Chamber of Commerce and the National Association of Manufacturers (NAM).
The biggest question about the Administration's (and anyone else's) infrastructure plan is how to pay for it. The various options - a federal gas tax increase, incentivizing P3s, a national infrastructure bank, tax credits for investors, etc., will need to be addressed as part of another of the Administration's top priorities - tax reform. Yesterday, the Treasury Department announced it intends to work with Congress to enact a tax reform bill by the August recess - a very ambitious goal.
After the initial, post-election sense of optimism that one of President Trump's immediate priorities would be a massive infrastructure program, a dose of reality has set in as many of the Administration's early initiatives have been overtaken by events and undermined by controversy. The new Administration is quickly learning, as most new administrations do, that issues such as tax and regulatory reform, immigration policy, and in Trump's case, healthcare reform, are easier said than done. There are even some observers who think that any infrastructure proposal may be postponed until 2018 when it could be used to build political support for Republicans running in the mid-term elections.
The federal government is still operating under a temporary Continuing Resolution (CR) for FY'17. The short-term CR expires at the end of April. Between now and then Congress will have to decide whether to pass another CR for the remainder of the fiscal year or try to pass new federal agency appropriations bills as part of an omnibus package. Many believe that the easiest thing for Congress to do, given all that is on their agenda, is to pass a year-long CR and then move on to deliberations on the FY'18 budget. However, a year-long CR would fund federal agency programs at the same level as in FY'16. In the case of the highway, transit, and rail programs authorized by the FAST Act, that would mean foregoing the increase in funding authorized for FY'17. Congress also needs to grapple with the debt ceiling this spring - an always contentious issue.
Moving on to FY'18 (which starts on October 1, 2017), the Administration is expected to release a so-called "skinny" budget during the week of March 13. This will be a 100+ page overview of its FY'18 budget recommendations with a limited amount of detail regarding funding for specific agency programs. The full budget proposal isn't expected until late April or early May. It appears that Trump will propose large increases in defense, law enforcement, and veterans funding (as much as $54B) which will be paid for with equally large cuts in foreign aid funding and domestic discretionary programs.
It is unclear whether the domestic cuts will include cuts to transportation and other infrastructure programs. Some conservative groups, such as the Heritage Foundation, have pushed for large cuts in transit and Amtrak funding. However, in his remarks at the joint session of Congress this week, President Trump reiterated his strong support for infrastructure investment. It is not clear how the Administration would justify near-term cuts in infrastructure programs while simultaneously laying the ground-work for a $1 trillion investment in infrastructure which, according to the various unofficial lists of projects floating around, may well include transit and rail projects.
Whatever the Administration ends up proposing in its FY'18 budget request, it is ultimately up to Congress to pass an FY'18 Budget Resolution and the individual federal agency appropriations bills. While the Republican-majority Congress will certainly want to support President Trump, it is very likely many Members of Congress, and not just Democrats, will have their own budget priorities.
On January 20, the Trump Administration issued a "Regulatory Freeze Pending Review" memo. It requires that the effective dates of certain federal regulations that were issued in the final days of the Obama Administration be postponed for review by the new Administration. It has impacted at least one key US DOT regulation. In the February 13 Federal Register, FHWA published a notice delaying the effective date of two FAST Act Performance Measures until March 21. Here is a link to the Federal Register notice. The two final regulations - Assessing Pavement Condition and Bridge Condition for the National Highway Performance Program, and Assessing Performance of the NHS System, Freight Movement on the Interstate System, and Congestion Mitigation and Air Quality Improvement Program.
The President also issued an Executive Order on Reducing Regulation and Controlling Regulatory Costs intended to further reduce regulatory burden by requiring agencies to identify at least two prior regulations for elimination, for every one new regulation that is issued; the "two out, one in" approach. Additionally, the Executive Order calls for balancing the costs of implementation for all new and repealed regulations for FY'17, such that the net total incremental cost is zero.
This week President Trump ordered his administration to rescind and rewrite an Obama-era environmental rule that critics say gave the U.S. government too much power to regulate waterways nationwide. Trump signed a directive on Tuesday compelling the U.S. Army Corps of Engineers and the Environmental Protection Agency to reconsider the controversial 2015 "Waters of the U.S." rule.
In late January, President Trump issued an Executive Order on Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects. It establishes the policy to streamline and expedite environmental reviews for all infrastructure projects and empowers the Chair of the Council of Environmental Quality (CEQ) to determine whether a project qualifies as a "high priority" project.
In addition to the Administration's actions on regulatory reform, the Republican-majority Congress has recently repealed a number of Obama Administration regulations using the authority of the Congressional Review Act (CRA). The CRA allows Congress to reach back retroactively and kill final rules issued in the last six months of the Obama Administration. Most of the regulations repealed to date impact environmental regulations. Additional rules are under consideration for repeal.
While Congress is making slow but steady progress on confirming most of President Trump's cabinet nominations, most positions below the secretarial level remain unfilled. At US DOT, Secretary Chao is the only confirmed appointment. No nominations have been announced for any of the modal administrators, Deputy Secretary, or various assistant secretaries. While Secretary Chao has named a Chief of Staff, Michael Britt, and a few other senior advisors in her personal office, most have little or no transportation background. While it has often taken until May or June for previous administrations to get reasonably staffed, the timing this year is particularly slow. Numerous rumors continue to flow regarding potential nominees, but none appear to be more than just speculation.
In addition, the Trump Administration's federal agency hiring freeze is making it difficult for federal agencies and offices, such as US DOT's newly reorganized Build America Bureau, to staff up and fill critical vacancies.
In the meantime, initial development of a potential infrastructure package is primarily being handled by the White House National Economic Council (NEC) under the leadership of Director Gary Cohen. A recent addition to the NEC is DJ Gribbin, who is the Special Assistant to the President for Infrastructure Policy. DJ previously headed government advisory for Macquarie Capital, a role in which he led advisory teams structuring P3 transactions for governmental clients. He served as FHWA Chief Counsel and US DOT General Counsel in the George W Bush Administration.
The Eno Center for Transportation has released a new report: Life in the FASTLANE: Recommendations for Improving Federal Freight Grants. The report provides a brief history of the FASTLANE program (called "Nationally Significant Freight and Highway Projects" in the FAST Act), outlines the grant program's parameters, and provides a summary of projects that were awarded funds from the first round of applications. Eno's report also makes six recommendations for the future of the program.