This week in Washington, the Office of Management and Budget released the president’s proposed 2019 budget, President Trump laid out his infrastructure financing plans, and immigration continued to be a sticking point in Congress as the deadline to extend DACA creeps closer.
Trump Releases Budget
On Monday, Feb. 12, President Trump’s proposed budget for 2019 was released by the Office of Management and Budget, as were fact sheets addressing various provisions, and an overview of savings and reforms. Deficits under the plan are expected to reach nearly $1 trillion per year by 2022. Highlights from the budget include:
- $716 billion in national defense funding, which is in line with the two-year budget passed by Congress previously
- $200 billion for new funding for infrastructure investment over 10 years
- $1 trillion in savings from repealing and replacing the Affordable Care Act
- Welfare reform
- New limits to federal financial aid for students
The president’s budget is often considered an “aspirational” document, outlining the priorities of the administration. Due to the previously passed two-year budget, it is possible that the Republican leadership will not pursue a fiscal year 2019 budget resolution, with funding levels for each agency having already been determined. However, if the GOP pursues this option, any spending-related priorities will have to be passed by a 60-vote majority in the Senate, rather than using reconciliation to pass them with a simple 51-vote majority.
For more info, please see this article from The Wall Street Journal.
The president on Monday also released his proposal for $1.5 trillion in infrastructure investment over 10 years, to be spurred by $200 billion in federal spending. For a more in-depth picture, please see my Middle Market Growth article on the release of the plan. Here’s the gist:
If the infrastructure investment gap isn’t addressed, the U.S. economy is expected to lose almost $4 trillion in GDP and 2.5 million jobs by 2025.
Why does infrastructure matter?
- Nine out of 10 middle-market executives want to see U.S. infrastructure improved.
- Each American household is projected to lose $3,400 a year on average from 2016-25 due to infrastructure deficiencies.
- If the infrastructure investment gap isn’t addressed, the U.S. economy is expected to lose almost $4 trillion in GDP and 2.5 million jobs by 2025.
Will it actually happen?
- Any infrastructure legislation will require 60 votes in the Senate.
- Democrats hate the privatization that occurs in Trump’s plan.
- Conservatives hate the spending detailed in Trump’s plan.
- Infrastructure overhauls generally occur when the economy is in trouble and unemployment is high. That’s not the case right now.
- Midterm elections are just around the corner.
- That said, analysts have been wrong before.
What’s in it?
- Funding that would be awarded based on the likelihood of public-private partnerships, and a plan’s ability to bring in nongovernmental spending for the project.
- A rural infrastructure program.
- A fund to incentivize projects that would “radically change the way our infrastructure operates” (such as 5G, high-speed rail, etc.).
- Reductions and streamlining of various environmental regulations.
- Expansion of Pell Grant and federal work study funds to short-term education programs.
Immigration Bill Stalls in the Senate
After opening up the pathway for floor debate and votes on an immigration plan, all four immigration bills presented in the Senate this past week failed to garner the 60 votes necessary to pass committee, Axios reports. As the deadline for recipients of the Deferred Action for Childhood Arrivals program approaches, the administration has increasingly said it won’t accept any immigration deal that doesn’t enact its policies—which include extending DACA, allocating $25 billion in funding for a border wall, and slashing the number of legal immigrants that come into the United States.
As the deadline to extend DACA nears, Republican Sen. John Thune of South Dakota is quietly proposing prolonging the DACA program in exchange for $25 billion in border wall funding, The Hill reports.
Ben Marsico is ACG Global’s manager of legislative and regulatory affairs.