- Stresses importance of waterways, against Ohio River backdrop
- Praises Saudi King Salman, Blackstone’s infra-investing partner
- Repeated call for $1 tln total, with at least $200 bln of federal money
President Donald Trump, speaking in Cincinnati, outlined his vision for an infrastructure overhaul, including at least $200 billion of direct federal spending.
He repeated his call for generating a total investment of $1 trillion, which he suggested was modest compared with the $6 trillion spent on foreign wars.
Speaking “on the shores of the very magnificent Ohio River,” as he put it, Trump said the United States has been “spending money all over the world except here.” The country will restore its “rivers, runways, roads and rails,” he pledged, “and we’ll do it using American labor, American energy, American iron, aluminum and steel.”
Reminding the crowd of his administration’s exit from “the so-called Paris Accord,” announced last week, Trump declared, “We will never have outside forces telling us what to do and how to do it, believe me.”
The president’s infrastructure plans are of enormous interest to the private equity industry, which has targeted billions of dollars for investment in projects.
Trump went on to thank King Salman bin Abdulaziz Al Saud of Saudi Arabia: “We spent a lot of time together, and they’re doing a great job.” Trump suggested the Saudis “are going to be doing something very special” to stop the funding of terrorism. The country’s Private Investment Fund is also contributing $20 billion to an infrastructure vehicle set up by Blackstone Group to target mostly U.S. projects.
Blackstone’s co-founder and CEO, Stephen Schwarzman, is a close economic adviser to the president. Trump did not mention this deal specifically but did tout “more than $350 billion of military and economic investments into the United States” resulting from his recent trip to Saudi Arabia.
Trump did not go into the details of funding, beyond repeating the fiscal necessity of repealing and replacing Obamacare. The administration has proposed heavy reliance on public-private partnerships, while Democrats strongly object. On Monday, Senate Minority Leader Charles Schumer (D-New York) said such an arrangement “means Trump tolls from one end of America to the other, and huge profits for financiers who, when they put up the money, want to be repaid by the average driver, worker and citizen.”
According to Business Insider, after the June 7 speech, Rep. Jamie Raskin (D-Maryland) told reporters, “This is just a private money-making operation for the big-business buddies of the president. They plan to give away billions of dollars to Wall Street banks and foreign investors including Saudi Arabia.”
“They’re just obstructionists,” Trump said of Democratic lawmakers. “Every single thing is obstruction.”
Before the split over financing, upgrading infrastructure was seen as an area of bipartisan agreement. Trump called for “all Democrats, and Republicans, to join together — if that’s possible — in the great rebuilding of America.”
Trump’s speech was notable for a new emphasis on “the 12,000 miles of inland waterways” that carry the nation’s coal, oil, and steel, which he said “depend on a dilapidated system of locks and dams that is more than half a century old.” According to Trump, maintenance of this system has been underfunded to the tune of $8.7 billion.
Action Item: Read the American Investment Council‘s May 2017 report “Private Capital and Public Good: Revitalizing Infrastructure with Private Capital” here.
U.S. Interior Secretary Ryan Zinke (left), Environmental Protection Agency Administrator Scott Pruitt (2nd left) and Agriculture Secretary Sonny Perdue (right) join U.S. President Donald Trump as he delivers remarks on his potential infrastructure proposals during an event at the Rivertowne Marina in Cincinnati on June 7, 2017. Photo courtesy Reuters/Jonathan Ernst