May 24, 2019

The much-ballyhooed May 22 White House meeting between President Trump and Congressional Democrats was over almost as soon as it started, as the President called a halt to further discussions with Democrats because of their investigations of his Administration.

The degree to which this week’s meltdown upsets you is probably proportionate to the degree to which you got your hopes up after the April 30 meeting, at which President Trump – whose chief conservative “handlers” were not in the room – impulsively agreed to work towards a $2 trillion infrastructure spending total (Democrats had only asked $1.5 trillion) and, somehow, promised that at the next meeting, three weeks hence, he would put forward his proposals for how to pay for that spending, before anyone in Congress had to put their own “pay-fors” out there.

$2 trillion in additional federal spending is such a gigantic amount – and the pay-fors needed would be so large –that the idea of Trump putting a real revenue plan of that magnitude out in public was almost inconceivable. Particularly, after:

• On May 17, POLITICO reported that Trump’s acting chief of staff and acting budget director had been busy “reassuring conservative leaders that it has no plans to hike the gas tax to help fund a massive infrastructure package.”
• On May 19, in an interview broadcast on Fox News, Trump said “I also think we’re being played by the Democrats a little bit, you know I think what they want me to do is say “Well what we’ll do is raise taxes,” and we’ll do this and this and this, and then they’ll have a news conference, see, Trump wants to raise taxes. So it’s a little bit of a game, but I do believe they’re doing that.”
• At about 7 p.m. on the night before the meeting (May 21), the White House released the text of a letter Trump send to House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY), which said “Before we get to infrastructure, it is my strong view that Congress should first pass the important and popular USMCA trade deal.” Then, rather than moving immediately to a stand-alone infrastructure bill, Trump wrote that “The highway trust fund is essentially bankrupt and needs to be reauthorized by September 2020. Hence, we believe that reauthorization is the best vehicle to achieve our goals.” The letter then asked Pelosi and Schumer to come to the meeting “with your infrastructure priorities and specifics regarding how much funding you would dedicate to each.”

All that being considered, the odds were very slim that the May 22 meeting would end in any kind of substantive agreement. White House aides had prepared very brief outline of an infrastructure spending plan that would include Highway Trust Fund reauthorization (for as long as ten years, which at baseline levels would have been about $625 billion), plus the $200 billion placeholder in the President’s budget, plus some other odds and ends. This could have been compared with the specifics of whatever plan the Democrats brought, before they all realized that Trump was not going to take the lead on a massive revenue increase.

But things never got that far. The President walked in at least 10 minutes late, criticized Pelosi for a few minutes about the various investigations that were ongoing by various House committees and about how she had told a closed-door meeting of House Democrats earlier that morning that she thought Trump was engaged in a “cover-up,” and then walked out before the Democrats could get a word in.

Trump then summoned the White House media to the Rose Garden, where he delivered a long statement that mostly focused on the extent to which he had been investigated already, but which also contained this: “I just wanted to let you know that I walked into the room and I told Senator Schumer and Speaker Pelosi, ‘I want to do infrastructure.  I want to do it more than you want to do it.  I’d be really good at that.  That’s what I do.  But you know what?  You can’t do it under these circumstances.  So get these phony investigations over with.'”

Meanwhile, Pelosi and Schumer had exited to the north side of the White House and walked over to the stakeout point (to find that most of the press and microphones that were normally there had gone to the other side of the building to hear Trump), where they gave their side of  what had happened in the meeting. Pelosi said she had hoped to work with Trump on a transformative infrastructure initiative, but “For some reason, maybe it was lack of confidence on his part, that he really couldn’t match the greatness of the challenge that we have, wasn’t really respectful of the reason – of the Congress and the White House working together.  He just took a pass and it just makes me wonder why he did that.  In any event, I pray for the President of the United States.  And I pray for the United States of America.”

Later that day, Pelosi sent a Dear Colleague letter to all House Democrats, saying that even though the President was currently uncooperative, “Democrats remain committed to an historic infrastructure package that is big, bold and bipartisan; green, future-focused and comprehensive; and jobs-creating.  Our outstanding Committee Chairs will continue to work relentlessly on bold, transformative infrastructure solutions that will create good-paying jobs, regardless of the President’s behavior.”

So what happens now?

At the start of the Congress, Pelosi reserved the bill number H.R. 2 for an infrastructure bill. But it was never quite clear what was going to be in the bill, particularly whether or not the surface transportation reauthorization bill – which everyone knows has to happen eventually, whether or not any other action on infrastructure ever takes place – would be included.

Trump’s decision not to work towards a Big Infrastructure Bill for the time being certainly makes it more difficult for committees that want to promote infrastructure that doesn’t fit in the surface transportation bill – like the $122 billion package of broadband, energy, environmental and health care infrastructure initiatives discussed by the House Energy and Commerce Committee this week. (Or the increase in the allowable airport passenger facility charge (PFC) promoted by House Transportation and Infrastructure chairman Peter DeFazio (D-OR) and others – a PFC increase is not a natural fit for the surface transportation bill, and the recurring aviation reauthorization won’t be up until 2023, so a Big Infrastructure Bill that crossed lots of committee lines was DeFazio’s best bet for a PFC increase in this Congress.)

DeFazio himself issued his own statement after the White House meeting, which concluded “Even if a transformative deal with the White House remains elusive in the near term, I will continue to use my position as Chair of the House Committee on Transportation and Infrastructure to work with Republicans to move individual pieces of legislation that will make a difference, I will continue to work on a surface transportation reauthorization bill, and I will continue putting in the legwork to make the improvements to our nation’s infrastructure that Americans expect and deserve.”

Highway Trust Fund programs (the heart of the surface transportation reauthorization bill) have a distinct advantage in that they are mostly paid for already (by excise taxes that are built into the budget baseline) – a ten-year reauthorization of Trust Fund spending at current (FY19) levels, plus annual inflation increases, would provide about $625 billion in real money but would only require about $175 billion in extra pay-fors (in addition to those excise taxes) to keep the Trust Fund solvent for that period. That’s over $3.50 of real spending money for every $1.00 of pay-for. New or expanded infrastructure programs that don’t already have dedicated revenues built into the baseline would require $1.00 in pay-fors for every dollar of real spending (if you are going to pay for things at all).

The Senate is expected to move first on surface transportation reauthorization, with the Environment and Public Works Committee hoping to approve the highway title of the bill by July 31. DeFazio’s committee is on a slower timeframe, but the September 30, 2020 expiration of current Trust Fund spending waits for no one.