Are We “Shovel-Ready”?
A famous line of dialogue came from the 1989 film “Field of Dreams”: “If you build it, he will come.” Perhaps the quote endures because of its inherent irony — it’s not always true. In fact, during the Obama Administration, there was an unfortunate lesson best illustrated by paraphrasing this quote: “If you fund it, it will get built.” Unfortunately, even President Obama was forced to concede that the 2009 American Recovery and Reinvestment Act’s $69 billion funding for “shovel-ready” infrastructure improvements was ill conceived.1
The problem? With provisions requiring project funding to be committed within about a year and a half of passage of the bill, not enough attention was paid to the time-consuming myriad of bidding, design and approval processes that caused inevitable delays.2
That’s one thing about short-term planning: It seldom leads to long-term success. For example, if you need a new roof on your home, it may be better to invest in a high-quality roof replacement that will last the rest of your life. If you opt to pay for a cheaper “patch job,” you may end up having to replace the whole roof later. Big projects like that could cause stress on your retirement savings, especially toward the latter years of retirement. If you’d like help planning and budgeting for big and small expenses in retirement, please give us a call.
According to President Trump’s latest bill, his promised U.S.-Mexico border wall is to be an integral part of America’s infrastructure. That’s because in March, the president called for immediate budget cuts of $18 billion from a variety of programs in order to put a down payment on construction of the border wall.3 Programs with proposed cuts in his budget include the Transportation Investment Generating Economic Recovery (TIGER) grant program, a popular infrastructure funding tool for cities and states.4
While that proposed budget has little chance of being passed in its current form, it may be worth pondering what the new administration considers to be viable infrastructure projects during its tenure. It has been reported that Trump is prioritizing “shovel-ready” projects to begin within 90 days of passing an infrastructure funding bill.5
Some investment analysts are excited about Trump’s infrastructure plans, many of which are slated to be privately funded. In fact, given the White House’s propensity toward deregulation, it may forge a path for more predictable, streamlined regulatory processes to facilitate expediting new projects.6
Trump’s team put together an infrastructure wish list early on in his budget proposal process. The inventory includes a vast array of interesting options, such as Project Clean Lake in Cleveland, an Atlantic coast pipeline for natural gas and a satellite-based next-gen air traffic control system.7
Content prepared by Kara Stefan Communications
1 Mark Niquette. Bloomberg. March 2, 2017. “Trump’s $1 Trillion Infrastructure Dream Faces the Same Old Nightmares.” https://www.bloomberg.com/news/articles/2017-03-02/trump-s-1-trillion-infrastructure-dream-faces-the-same-old-nightmares. Accessed March 28, 2017.
3 Andrew Taylor. Chicago Tribune. March 28, 2017. “White House calls for domestic cuts to finance border wall.” http://www.chicagotribune.com/news/nationworld/politics/ct-mexico-border-wall-cost-funding-20170328-story.html. Accessed March 28, 2017.
4 Melanie Zanona. The Hill. March 12, 2017. “Infrastructure grants could be on chopping block in Trump budget.” http://thehill.com/policy/transportation/323287-infrastructure-grants-could-be-on-chopping-block-in-trump-budget. Accessed March 28, 2017.
5 Maxwell Tani. Business Insider. March 25, 2017. “‘Seems like it’s going to be about his corporate cronies’: Environmental groups fret over Trump’s infrastructure plan.” http://www.businessinsider.com/environmental-impact-trumps-infrastructure-plan-2017-3. Accessed March 28, 2017.
6 Diana Britton. Wealth Management. Feb. 1, 2017. “Are We Entering the Golden Age of Infrastructure?” http://www.wealthmanagement.com/alternative-investments/are-we-entering-golden-age-infrastructure. Accessed March 28, 2017.
7 President-elect Trump. Dec. 14, 2016, “Emergency & National Security Projects.” https://assets.documentcloud.org/documents/3409546/Emergency-NatSec50Projects-121416-1-Reduced.pdf. Accessed March 28, 2017.
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