News Analysis: Trump pushes 'great rebuilding' of U.S. infrastructure, but could face hurdles in Congress

Source: Xinhua| 2017-04-06 04:15:14|Editor: Mu Xuequan
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By Matthew Rusling

WASHINGTON, April 5 (Xinhua) -- To boost a U.S. economy still hurting from the 2008 downturn, President Donald Trump on Tuesday pushed a "great rebuilding" of U.S. infrastructure. While the move may boost the economy, he will face some hurdles in Congress.

While the official jobless rate is low, the numbers do not reflect the millions of Americans who have simply given up trying to find full time work - especially in rural areas - out of sheer frustration at their dim prospects. Jobs and the economy were the main reason why Trump was elected in November.

But in order to sell any job policies to Democrats in Congress - most of whom despise him - the former New York businessman will have to make it all about jobs. Only if he does that will Democrats work with him to pass what could be a 1-trillion-U.S. dollar infrastructure revamp, experts said.

"Trump was elected because people thought he would improve the economy and make the lives of average Americans better," Republican strategist Ford O'Connell told Xinhua.

"So everything he does...he has to make sure he sells it (either) as a jobs bill, or something that will improve the lives of everyday Americans," O'Connell said.

The Democrats in Congress basically are looking at the 2018 election, and their base has informed them that they cannot negotiate whatsoever with Trump. But if Trump's plan helps Democrats' constituents economically, that may be the one thing on which they could agree with Trump, he said.

In a televised speech on Tuesday, Trump pushed for a "great rebuilding" of the U.S., saying that he would push a massive infrastructure program that would put many Americans back to work.

Barry Bosworth, an economist at the Brookings Institution, told Xinhua that such a plan would need Congressional approval.

"He has no bill and has not explained how it would be financed," said Bosworth.

Moreover, it remains unknown how the plan would be paid for, with either budget cuts or borrowing, and that could set the stage for a battle with Congress.

"I do not think the Congress will agree to a plan that is debt financed. The Republicans will want to cut social programs to pay for it and the Democrats will not agree. It will end up in a big argument with nothing accomplished," Bosworth said.

Trump needs to make choices, but he will not do that. Thus, he has no viable economic program, he said.

"I am afraid that the time for fiscal policy is passed, and most of these proposals are impractical. Infrastructure will depend on actions of the states, not the federal government," Bosworth said.

Desmond Lachman, a resident fellow at the American Enterprise Institute, noted that the plan being proposed by Trump involves spending an additional 1 trillion U.S. dollars in infrastructure spending over the next decade.

"This is bound to increase employment, especially in the construction sector and will bring back into the work force at least some of those workers who are discouraged from seeking work," he told Xinhua. "However, it is also likely to add to inflationary pressures on a labor market that is already tight."

Noting how the markets have viewed Trump's talk of infrastructure spending, Diane Swonk, a veteran economist who is now independent, told Xinhua that investors in the stock market have bought into the hope of deregulation, infrastructure investment and tax cuts.

"The good news is that the economy is healing. I worry that investors have not looked at the other (side) of this equation, which is higher inflation and interest rates. There also is no acknowledgement of the uncertainty surrounding policies and the downside risk on protectionism," she said.

Meanwhile, Tuesday morning saw House speaker Paul Ryan announce that some of the mountain of regulations enacted during the administration of former President Barack Obama would begin to be peeled back.

"As of today, Congress has approved more than a dozen separate measures to take excessive regulations off the books," Ryan said at a press conference.

"After years of sluggish, pathetic economic growth, this is one way we are working to boost our economy and create jobs," Ryan said.