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Capitol Watch: With Transportation Revenue Unclear, Administration Tackles Permitting

By Katie Cross, Associate, Blakey & Agnew

At a celebration of the U.S. Department of Transportation's (USDOT) 50th Anniversary in March, in reference to our nation's infrastructure needs, Secretary Chao said "the problem is not money." Instead, the Transportation Secretary argued that the investment shortfall in our nation's infrastructure stemmed from "delays caused by government permitting processes that hold up projects for years." At the time, several Administration officials said that investors had plenty of money available to invest in infrastructure projects and that public-private partnerships (P3s) could be the solution to funding our system. However, they argued, private companies were hesitant to commit to any partnerships because of hold ups resulting from the permitting processes, presenting too much risk for investors.

In order to address these barriers to private investment and to, according to the White House's "Plan to Rebuild America's Infrastructure," released in June 2017, "jumpstart investment" in U.S. infrastructure, President Trump has been moving quickly to attempt to improve the permitting process.

Soon after taking office in January, President Trump issued an Executive Order (EO) to expedite the environmental review process by identifying certain projects as "High Priority Infrastructure Projects" and mandating such projects be prioritized for review and completion. The White House's guiding principles for their plan to rebuild America's infrastructure included a goal to "lower the average permit time from 10 years to two years." In order to facilitate that goal, the President issued another EO in August 2017 requiring one agency be designated the lead agency in the environmental review process and setting a two-year goal for completion.

USDOT is also working to streamline the permitting process, submitting a proposed rulemaking in late September 2017 to the Federal Register that would bring the Federal Railway Administration under the same environmental review process as the one the Federal Highway Administration and Federal Transit Administration currently use. According to USDOT, this harmonized environmental review process will "ensure that multimodal projects have to follow only one process, rather than multiple agency processes."

It is true that permitting reviews can pose significant delays to the construction of vital infrastructure, an idea with which industry stakeholders have long agreed. However, the declining condition of our nation's infrastructure system cannot only be

attributed to the long permitting process. A key contributor to the state of U.S. infrastructure is underinvestment.

In fact, there is a substantial need for increased funding, with the American Society of Civil Engineers estimating in their 2017 Infrastructure Report Card that there is a funding gap for infrastructure totaling around $2 trillion. Indeed, a discretionary grant program created by the Fixing America's Surface Transportation (FAST) Act in 2015 and designed to make investments in our nation's highway and freight networks saw $13 in requests for every $1 in available funding in its first round – documenting the vast need of projects.

Recently, both the Administration and Congress have recognized that P3s alone will not solve infrastructure's funding issue but should instead be considered as one tool in the tool box. President Trump himself has reportedly walked back his stance on P3s, saying that they may not actually be the solution to repairing U.S. infrastructure. While there is no clear favorite funding mechanism, the recent possibility of an infrastructure investment program has spurred a much needed dialogue on the topic. During a House Transportation and Infrastructure Subcommittee on Highways and Transit hearing on October 11, 2017, Chairman Shuster (R-PA) suggested using asset recycling as a potential funding tool. Asset recycling is when government assets are leased to private enterprise and the revenue from the lease is invested into infrastructure projects. In late October 2017, Gary Cohn, chief economic adviser to President Trump, reportedly suggested raising the gas tax, which has not been changed since 1993. Secretary Chao and USDOT have also not completely backed away from the potential of private investment in infrastructure. During an October 23, 2017 speech, Secretary Chao noted that, while not the solution for every project, "private sector investment can save taxpayers time and money and enhances safety."

Blakey & Agnew, LLC is a public affairs and
communications consulting firm based in
Washington, DC.