"Low Odds Of Being Enacted": Here Is Goldman's Summary Of Trump's Infrastructure Plan

"No surprises": that is how Goldman summarizes today's detailed infrastructure proposal released by the White House. According to the bank, it includes the same amount of funding, distributed in the same way, as the short proposal leaked to the media several weeks ago." It is summarized below:

More importantly, Goldman believes that "the low odds of enactment this year have not changed, in our view", which coupled with the White House's full budget proposal which also has virtually zero chances of being adopted in its proposed shape, means that Monday has so far been much ado about nothing.

Here is Goldman's full take:

The overall amount of federal funding under the proposal remains at about $200bn. This was originally described as helping to finance up to $1 trillion in infrastructure investment, but the President has described it more recently as backing up to $1.5 trillion. Regardless of the amount of non-federal funding the proposal might attract, the federal portion remains $200bn spread over several years.

The major aspects of the proposal are similar to the proposal that has been circulating informally and has already been described in the media. It consists of four broad segments:

  • Infrastructure Incentives Program ($100bn): States would be required to establish a sustainable non-federal funding stream equal to 80% of project costs, which would be matched with 20% federal funding. This would be aimed at traditional areas of federal investment, i.e., transportation, water/sewer.
  • Rural Infrastructure Program ($50bn): This funding would come via grants to states with no matching funds required, and would be aimed more broadly than traditional federal investment by including broadband and electrical power in addition to transportation and water/sewer.
  • Transformative Projects Program ($20bn): The federal government would put up funding for 30%, 50%, or 80% of the project cost (depending on project stage). This would be aimed at projects that are commercially viable but have much higher than usual risk/reward.
  • Infrastructure Financing Programs ($20bn): The proposal would expand several existing federal programs through additional funding and broader eligibility, including the TIFIA and WIFIA programs and private activity bonds (PABs).

The proposal also calls for a number of regulatory changes, including permitting reforms and broader allowances for states to use tolling on interstate highways. In addition, the proposal would allow for greater divestiture of federal infrastructure assets.

Our view has been that infrastructure legislation will be difficult to enact this year, in light of the need for 60 votes in the Senate, a lack of bipartisan consensus regarding the appropriate structure for federal infrastructure funds, and political considerations ahead of the upcoming midterm election. With few apparent changes from the document floated several weeks ago, the new proposal seems unlikely to change the dim prospects for an infrastructure financing plan being enacted this year, in our view.

 

Comments

Laowei Gweilo lloll Mon, 02/12/2018 - 12:53 Permalink

did no one even read Trump's Art of the Deal?

IT'S IN THE BOOK

the entire point of the lowball is imagine some guy wants 750K for their house and you offer them 200K

imagine their shock... 'wtf' but then you seed some doubt. '...is my house really not worth that much?

then you negotiate up to 500K and they feel like they snuck out a deal

now replace 750K with 750B, house with bill, and guy with congress...

i mean, come on =p his entire strategy is in the book lol he wrote a how-to manual on the exact way he's passed every bill so far and yet he's every time he does it again and people are still shocked or disenchanted or rejectful

In reply to by lloll

Teja Mimir Mon, 02/12/2018 - 15:57 Permalink

Well, as President, he works the same way - scaring the hell out of people by making the impression that he will tear down everything and then top it up with a nice nuclear war, and at the end people will be happy that he only doubled the national debt.

In contrast to the above, just read a nice article about a Socialist Hell... Finland:

https://www.theguardian.com/world/2018/feb/12/safe-happy-and-free-does-…

To give you something to dream about.

In reply to by Mimir

LawsofPhysics Mon, 02/12/2018 - 12:41 Permalink

LOL!  Sure, sure, just more evidence that the useless fucks in banking and finance own your government!!!

Why do we need these fuckers anyway, any one of us could press a "print" button!?!?!?

"Full Faith and Credit"

same as it ever was!!!

J Mahoney Mon, 02/12/2018 - 12:53 Permalink

Screw the roads and bridges. Although some have problems, many do not and are a waste of money. MAKE NEW WATER RESERVOIRS for the future. Make new technology clean burning garbage to electricity plants to stop future landfills. Get prisoners working in them sorting garbage. Invest in the electrical grid becoming EMP proof. Hope it doesnt pass

Sonny Brakes Mon, 02/12/2018 - 12:55 Permalink

You would think that corporate America would have assumed responsibility for some of the infrastructure. Whatever dollars our government spends typically lands on the corporate ledger and we are all responsible for the dollars the government spends. Governments love to bride us with our own money. If I were to guess, I would say that corporations benefit most from having an infrastructure where their goods and services can flow resistant free, but guess what, they externalize those costs. For example, a truck driver stuck in traffic is paid by the mile. Another example, when you're stuck in traffic on your way to and from work it's on your time, not theirs.

**Listen up folks, it is us who finance corporations and it is we who are ultimately liable for all debts public and private, so let's stop Ctrl-P whenever the financial system attempts to catch its breath**

forrestdweller Mon, 02/12/2018 - 12:56 Permalink

For its goals, the US government does not need good infrastructure. Maybe a roadrfrom Wall Street to thetHamptons. More important is lots of weapons and cheap soldiers. Keep them poor and ruler 

Mustafa Kemal forrestdweller Mon, 02/12/2018 - 16:26 Permalink

"For its goals, the US government does not need good infrastructure."

There is alot of truth in what you say. I could go even further:

Since there will be no jobs for young people in the future, we really dont need them. The 1% will own everthing and work will be done with robots. Maybe he should plot the rise in robots. Then, of course, we will have to make them taxpayers.

In reply to by forrestdweller

Jethro Mon, 02/12/2018 - 13:14 Permalink

As much as I'd love to see this enacted (for the sake of my client base), where is the money coming from?  Taxes?  

Small towns have no money (declining tax base), and thier infrastucture is falling apart.  The water/sanitary sewer systems are plagued with problems associated with prolonged use beyond design life.  Crumbling roads, et. etc.

Freedom Lover Jethro Mon, 02/12/2018 - 14:57 Permalink

Obviously you do not understand the basics of how an economy works. You see spending like a beady-eyed accountant sees spending without taking in to account any of the benefits. Unlike a vast majority of federal spending programs Infrastructure spending actually adds high value employment and gains in productivity. Case in point building a bridge over a river that cuts commute time from 2-hrs to 20-minutes for a half million people (More time on the job, less worker stress, less fuel  and wear and tear on vehicles, etc. plus adding skilled labor jobs that pay well and stimulating high value manufacturing). In other words infrastructure spending pays for itself. If you want further proof of that look at the rates of economic growth and productivity of The United States post WW2 until the mid 1970's when infrastructure spending was increasing compared to the following period since when it declined steadily. Look at the current high rates of growth in China over the past decade as they ramped up their infrastructure spending. The National Society of Civil Engineers currently rates our infrastructure as a D+ and recommends spending $4-Trillion to fix it. We would do well to heed that advice. 

In reply to by Jethro

Mustafa Kemal Jethro Mon, 02/12/2018 - 16:29 Permalink

"where is the money coming from?  Taxes?  "

No, the idea that the money will come from localities is a head fake away from the fact that this is a mass privatization of US assets.  Soon, the 1% will own, not only our financial assets and private lande, but our federal land.

I wonder how much Yellowstone Park will sell for.

In reply to by Jethro

truthalwayswinsout Mon, 02/12/2018 - 16:44 Permalink

The bill that should be passed is to take NASA public and use that $800 Billion raised over 10 years as venture capital to commercialize space.

It would generate 100's of new companies, create 15 million jobs, save the environment and actually pay off the national debt in about 20 years with the 20% NASA keeps as equity and from the equity in all the new companies.

The cost of implementation is one bill and about $25 million to create all the necessary paperwork.  The initial funders would be from countries first for about $100 billion and then after initial successes from the general public.