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Republicans advocate for rural areas in Trumpís infrastructure plan
Kirill Abbakumov   on Monday, February 27, 2017 at 12:00:00 am

The Trump campaign had advocated using tax credits to lure private investment that would leverage an estimated $1 trillion worth of projects. But President Trump’s plan to pump $1 trillion into infrastructure projects over 10 years through mostly private investment isn’t sitting well with Republicans from rural states who control the purse strings. Transportation leaders in sparsely populated states told the Senate Environment and Public Works Committee that direct federal funding – and not toll-driven public-private partnerships – is critical to addressing their surface transportation needs

Rural lawmakers are concerned that relying on private financing will steer money toward urban areas where investors think they are best able to make a profit from heavy use of new roads and bridges. In thinly populated states, they say, such profitable projects may be few and far between. Funding solutions that involve public-private partnerships, as have been discussed by administration officials, may be innovative solutions for crumbling inner cities, but do not work for rural areas.

Democrats and rural Republicans worry that would shift the focus to projects like toll roads that can deliver a revenue stream and a profit source for private investors — and would cut out direct federal spending that must be spent on non-profitable projects like road maintenance. Republicans emphasize that direct federal spending will be critical to surface transportation projects, as long as any new spending does not increase the deficit, or as long as it's offset elsewhere in the budget.

The president has been silent on details since he took office. His campaign said last year that virtually all of the $1 trillion could come from the private sector. Using tax credits, the government could attract investors by giving them an incentive to put equity into a project and then to borrow to fully fund it.