Infrastructure Week

This last week was declared “infrastructure week” by the President. Trump stressed that his administration’s push will focus on “forging new partnerships” with businesses to generate $1 trillion in infrastructure investment. He had a whole week of events planned to highlight his new plan, but was overshadowed by the drama back in Washington over the testimony by former FBI Director James Comey before the Senate Intelligence Committee.

The President began the week by announcing his plans to privatize the nation’s air traffic control system. His proposal would mirror a plan being worked on in the House Transportation Committee that would separate Air Traffic Control from the Federal Aviation Administration. His plan’s goal is to reduce congestion, flight times, and fuel usage, and allow America to use and develop modern technology and communication equipment. This proposal was not universally acclaimed, even by Republicans, because of the concern that it would reduce service to small and rural airports. Senator Jerry Moran (R-KS) was one of those Republicans expressing opposition because of the potential impact on small and rural state airports and on the private airplane business. Kansas is home to several private plane manufacturers.

On Wednesday, the President pointed to America’s failing inland waterway system and how his infrastructure plan would fix this problem. Waterway upgrades and maintenance relies primarily on federal funding, which has been insufficient in meeting operational demands of the system. He says his plan will empower state and local governments to make the infrastructure improvements. He also pointed out that there is an $8.7 billion maintenance backlog. Others were quick to point out that his statement seems at odds with his budget proposal for fiscal 2018, which would cut the Army Corps of Engineers’ construction account by more than 50 percent and provide only enough funding to work on a single new lock and dam project on the system. The barge industry successfully lobbied to have its diesel fuel tax raised in 2014 in order to collect more money to invest in new and major rehabilitation projects, whose costs are split with the federal government. But the Trump administration’s budget proposal would leave this extra money sitting in a trust fund rather than putting it to use on the types of projects Trump touted in his speech today.

On Thursday, a Governors and Mayors listening session was held to ensure that the Administration’s policies on infrastructure align with the states’ specific needs. The session covered issues such as rural infrastructure, permitting reform, transformative projects, drinking and wastewater, transportation, and energy.

To finish the week, the President signed an executive order to improve the efficiency and timeliness of America’s infrastructure projects. The order will reduce the time it takes to permit a major infrastructure project, which could generate trillions of dollars in economic benefits.

The top Democrat on the Ways and Means committee announced that Democrats want to tie infrastructure spending to tax reform as part of a bipartisan effort. “We could use the money [from taxing revenues currently overseas] for a jobs program called infrastructure,” said Rep. Richard Neal (D-Mass.). Bringing those funds home at a special one-time rate to pay for infrastructure upgrades has also been endorsed by House Transportation and Infrastructure Chairman Bill Shuster (R-Pa.) and Trump campaign economic adviser Stephen Moore.













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                FROM THE CHART ROOM

                U.S. Crude Fuels More Chinese Demand


                China sailed past Canada in April as the largest buyer of U.S. crude for the second time since Congress lifted restrictions on oil exports two years ago, according to U.S. Census Bureau data released Friday. The Asian country purchased about 9.68 million barrels of U.S. oil last month, while America’s northern neighbor took 8.87 million. China is probably trying to diversify its crude supply as OPEC reduces deliveries to Asia following the group’s announced production cuts, said New York-based Timm Schneider, senior managing director for financial consultant Evercore ISI. Read more on Bloomberg



                Michael Best Strategies’ Energy Team

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