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  • McClatchy Trump team compiles infrastructure priority list

    http://www.mcclatchydc.com/news/poli...128492164.html

    BY LYNN HORSLEY, STEVE VOCKRODT, WALKER ORENSTEIN AND LINDSAY WISE
    The Kansas City Star and McClatchy Washington Bureau

    Update: This story has been updated to add details on the origin and circulation of information about potential infrastructure investments and White House comment.

    President Donald Trump’s team has compiled a list of about 50 infrastructure projects nationwide, totaling at least $137.5 billion, as the new White House tries to determine its investment priorities, according to documents obtained by McClatchy’s Kansas City Star and The News Tribune.

    The preliminary list, provided to the National Governor’s Association by the Trump transition team, offers a first glimpse at which projects around the country might get funding if Trump follows through on his campaign promise to renew America’s crumbling highways, airports, dams and bridges. The governor’s association shared that list with state officials in December. The group told the officials the projects on that list were “already being vetted.”

    Among the projects could be a new terminal for the Kansas City airport, upgrades to Interstate 95 in North Carolina and a proposal to replace the nation’s radar-based air traffic control system with one called NextGen, based on satellites.

    Another more detailed document obtained by the Star, circulated within the congressional and business communities, proposes funding an almost identical list of 50 projects as public-private partnerships, with half the money coming from private investment.

    According to a senior congressional aide, the Trump team put together the priority list of “Emergency & National Security Projects.” It includes cost estimates and job impact numbers. Another congressional aide told McClatchy on Wednesday that both documents are working drafts that continue to be developed with input from the National Governors Association.

    The projects on the more detailed document are nearly identical to the ones on the spreadsheet circulated by the National Governors Association among state officials in December, seeking further suggestions.

    All but two projects on both lists are the same, and they are listed in the same order. The preliminary list circulated by the governor’s association includes the Alaska Pipeline & LNG Project instead of the Texas Central Railway and it lists the Fort Mojave Solar Project instead of the Howard Street Tunnel.

    Some projects that governors suggested — in California and Washington state in particular — do not yet appear on either list.

    The governors’ association has received 43 responses from states and territories so far, Waskey said.

    “The total number of projects is more than 300,” Waskey said. “We are working to convene information for as many states as possible that we will then forward to the administration.”

    Some states, such as Missouri, have more than one project listed, while others appear to have come up empty. Neither document lists any projects in Kansas, for example.

    White House spokeswoman Lindsay Walters said on Wednesday that the more detailed document is “not an official White House document.” While a spokesman for the Trump transition said the Excel file was “not a Transition document,” the National Governor’s Association confirmed to McClatchy again on Wednesday that the group got the spreadsheet as an Excel file from that team.

    “The Excel file came to NGA from the transition team,” said Elena Waskey, a spokeswoman for the group. “If they’re saying it’s not a transition team document, I don’t really have an answer for you.”

    The National Governors Association asked governors’ offices last month for input on a preliminary list of infrastructure projects compiled by the Trump team, said Jaime Smith, a spokeswoman for Washington’s Democratic Gov. Jay Inslee.

    “They seek examples of priority infrastructure projects that might be incorporated into a future infrastructure investment program,” said the letter from the governors’ association, dated Dec. 16. “Specifically, the transition team is looking for 3 to 5 project suggestions from each state that they would vet for inclusion in a new program.”

    The letter said the vetting would be done by a bipartisan infrastructure commission overseeing investments.

    “The initial spend on these projects for 2017 is expected to be $150 billion, and the transition team hopes that this type of project will be continued over the next 2 years,” according to the letter.

    The letter also noted that any contributions governors made would not be binding, and that this was “just an initial information-gathering request.”

    Once the Trump administration officially took office, the letter said, “there will be a more formal process for states to submit information. Projects will be chosen through a more formal process as well.”

    The letter included a list of projects already being vetted, with the request that governors use it as a model for submissions.

    It already had the Seattle-Tacoma International Airport expansion on it, so Inslee sent a letter back to the association with five additional possibilities for federal investment.

    California Gov. Jerry Brown’s office sent nine examples of big shovel-ready projects in California, including the Sacramento River Bank Protection Project and Bay Area Commuter and Freight Projects.

    The projects have to meet specific criteria:

    ▪ A national security or public safety “emergency.”
    ▪ “Shovel-ready,” with at least 30 percent of initial design and engineering work complete.
    ▪ Direct job creator.
    ▪ Project with the potential for increased U.S. manufacturing.

    Both the preliminary list and the more detailed document obtained by the Star include a new terminal for Kansas City International Airport. The detailed document says the project would cost $972 million and generate 1,000 jobs.

    Missouri Gov. Eric Greitens declined to comment.

    The Kansas City airport is one of three airport projects on the spreadsheet circulated by the governor’s association. The others are expansions of the Lambert-St. Louis International Airport and the Seattle-Tacoma International Airport.

    “The business case for a new terminal was bolstered after Southwest and the other airlines told the City Council on April 26 that they would finance the nearly $1 billion new terminal, to be built where Terminal A is now,” reads the more detailed document’s description for KCI, which lifts word-for-word a passage in a June 24 article in The Star.

    In North Carolina, the I-95 project would provide urgent improvements to one of the oldest sections of the busiest interstate in the nation, according to the document. The cost is listed at $1.5 billion, and the project would produce an estimated 5,400 jobs, the document says.

    The 250-mile high-speed railway in Texas would enable commuters to travel between Houston and Dallas/Fort Worth in less than 90 minutes, according to the document. It is a $12 billion proposal that would create 40,000 direct jobs, the document says.

    Other proposals include I-395 reconstruction in Florida and a Cadiz Valley Water Conservation, Recovery and Storage Project designed to conserve billions of gallons of renewable groundwater in California’s Mojave Desert.

    Senate Democrats on Tuesday proposed their own $1 trillion plan to fund infrastructure projects over a 10-year period. Democrats say their proposal would create more than 15 million jobs.

    Horsley and Vockrodt of The Kansas City Star reported from Kansas City, Missouri. Orenstein of The News Tribune reported from Tacoma, Washington. Wise and Anita Kumar of McClatchy’s Washington Bureau contributed from Washington.






    http://www.mcclatchydc.com/news/poli...128794374.html


    List of 50 infrastructure projects used by Trump transition team came from consulting firm





    Last edited by Slimprofits; February 04, 2017, 11:00 AM.

  • #2
    Re: McClatchy Trump team compiles infrastructure priority list


    “The initial spend on these projects for 2017 is expected to be $150 billion, and the transition team hopes that this type of project will be continued over the next 2 years,” according to the letter.

    150 billion is less than 1% of USA GDP. If it is really executed at all. It's been said that during last financial crisis China implemented a public construction plan financed with public expenditure in the range of 10% of GDP. The results were really meaningful: growth accelerated to near 10%. If such a plan is financed by PPP's at least partially, then it's impact seems quite modest. The number of expected jobs to be created (couple thousands here, couple thousands there) seem unimpressive in a more than 100 million employed economy.
    My intention is not to say how good-bad the plan is, just measure it's investment implications.

    Comment


    • #3
      Re: McClatchy Trump team compiles infrastructure priority list

      Originally posted by Southernguy View Post

      “The initial spend on these projects for 2017 is expected to be $150 billion, and the transition team hopes that this type of project will be continued over the next 2 years,” according to the letter.

      150 billion is less than 1% of USA GDP. If it is really executed at all. It's been said that during last financial crisis China implemented a public construction plan financed with public expenditure in the range of 10% of GDP. The results were really meaningful: growth accelerated to near 10%. If such a plan is financed by PPP's at least partially, then it's impact seems quite modest. The number of expected jobs to be created (couple thousands here, couple thousands there) seem unimpressive in a more than 100 million employed economy.
      My intention is not to say how good-bad the plan is, just measure it's investment implications.
      China is most definitely NOT a model that should be emulated.
      The structure of the USA economy and the Chinese economy are diametric opposites; what may be good for one is not necessarily good for the other.

      Comment


      • #4
        Re: McClatchy Trump team compiles infrastructure priority list

        Originally posted by Southernguy View Post

        “The initial spend on these projects for 2017 is expected to be $150 billion, and the transition team hopes that this type of project will be continued over the next 2 years,” according to the letter.

        150 billion is less than 1% of USA GDP. If it is really executed at all. It's been said that during last financial crisis China implemented a public construction plan financed with public expenditure in the range of 10% of GDP. The results were really meaningful: growth accelerated to near 10%. If such a plan is financed by PPP's at least partially, then it's impact seems quite modest. The number of expected jobs to be created (couple thousands here, couple thousands there) seem unimpressive in a more than 100 million employed economy.
        My intention is not to say how good-bad the plan is, just measure it's investment implications.
        $150 billion with another $50-$75 billion to account for cost overruns.

        Comment


        • #5
          Re: McClatchy Trump team compiles infrastructure priority list

          http://thehill.com/policy/transporta...meeting-report

          Japan is planning to invest in U.S. infrastructure as part of a broader policy framework that Prime Minister Shinzo Abe is expected to pitch to President Trump when they meet next week, The Japan Times reported.

          The Washington summit between Trump and Abe on Feb. 10 comes following Trump's vow to make massive infrastructure spending a top priority.

          The president personally asked Republican leadership to add a rebuilding package to their 200-day agenda, though the legislation could likely be sidelined until other GOP priorities are addressed.

          Still, the talk has spurred great optimism among transportation advocates and investors.

          Japan’s Government Pension Investment Fund (GPIF), which is the world’s largest pension fund and manages over $1 trillion, will reportedly buy debt issued by U.S. companies to fund vast infrastructure spending.

          Reuters said the investment will amount to $150 billion in public and private funds over 10 years, aimed at projects such as high-speed rail and cybersecurity.


          http://thehill.com/policy/transporta...infrastructure

          House lawmakers began mapping out ideas Wednesday to tackle one of President Trump’s chief campaign promises: to rebuild U.S. roads, bridges and airports.

          During its first hearing of the new Congress, the House Transportation and Infrastructure Committee considered input from key businesses and organized labor about a strategy to upgrade the country’s ailing transportation system.

          Leaders from FedEx Corporation, Cargill Inc., BMW of North America and Vermeer Corporation outlined the types of projects they think should be targeted in any infrastructure proposal and offered ideas about how to pay for such a package.

          The hearing was widely bipartisan, and lawmakers called it a good first step in the process. But it remains clear that Congress and the White House still have a long way to go to come up with the necessary cash for new roads, bridges and other public works.

          http://www.cnbc.com/2017/02/02/paul-...il-spring.html

          House Speaker Paul Ryan said Thursday that Republican lawmakers will try to push through tax reform and infrastructure bills — two key policies for investors — in the spring after focusing on health care.

          "It's just the way the budget works that we won't be able to get the ability to write our tax reform bill until our spring budget passes, and then we write that through the summer," Ryan said on "Fox and Friends."

          He added that an infrastructure package "comes out of our spring budget, as well."

          Comment


          • #6
            Re: McClatchy Trump team compiles infrastructure priority list

            Originally posted by GRG55 View Post
            China is most definitely NOT a model that should be emulated.
            The structure of the USA economy and the Chinese economy are diametric opposites; what may be good for one is not necessarily good for the other.


            Far from my intentions saying what the US gov. should or should not do. My question is: is this kind of economic stimulus enough to create big budget deficits and boost economic activity so that interest rates and the dollar exchange rate change significantly?
            The answer to that question has big implications for us as (however modest) investors. So far my tentative answer is "no"

            Comment


            • #7
              Re: McClatchy Trump team compiles infrastructure priority list

              Originally posted by Southernguy View Post
              Far from my intentions saying what the US gov. should or should not do. My question is: is this kind of economic stimulus enough to create big budget deficits and boost economic activity so that interest rates and the dollar exchange rate change significantly?
              The answer to that question has big implications for us as (however modest) investors. So far my tentative answer is "no"
              You're probably right from a GDP/investor point of view. But from a political standpoint it would be enormous. Huge. Ten miles of new pavement would get him re-elected.

              Comment


              • #8
                Re: McClatchy Trump team compiles infrastructure priority list

                Originally posted by Southernguy View Post
                . My question is: is this kind of economic stimulus enough to create big budget deficits and boost economic activity so that interest rates and the dollar exchange rate change significantly?
                whether it's private/public partnerships or straight up gov't spending will make a huge difference in its [hypothetical] budget effect. if the former, the budget impact is limited. if the latter, i would guess the fed will end up holding the bonds to prevent rates and the dollar from rising too much. the dollar will be supported in either case by protectionism, high rates relative to those in other developed countries, and a tax break to encourage the repatriation of foreign profits.

                the hypothesized infrastructure spend won't happen for 2-3 years in any event. in the meantime imo the economy will continue sluggish, except for some sectors such as defense and oil services. [an analogy is investing in the makers of picks and shovels instead of gold mines.]

                the protectionism and repatriation of profits can happen quickly. the relatively high rates are already in place. i would guess the dollar continues to strengthen.

                heaven knows if this analysis is accurate, but i've put a little bit of money where my mouth is.

                Comment


                • #9
                  Re: McClatchy Trump team compiles infrastructure priority list

                  an eye-opening article on public private partnerships as - essentially- rip-offs which go bankrupt after the developers get paid off, leaving taxpayers holding the bag.

                  https://www.nakedcapitalism.com/2017...y-go-bust.html

                  Comment


                  • #10
                    Re: McClatchy Trump team compiles infrastructure priority list

                    Thanks jk, I did read that article.

                    It makes an excellent case that these have never worked out well and the incentives are all stacked against these ever working as advertised.

                    Comment

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