The Infrastructure Executive Order: Something to Build On?

by Kevin Swanson and Patrick Firth

Playing the “what if” game in politics never results in catharsis of the conscience for those tasked with shaping, shepherding and supporting a President’s agenda and as we all know hindsight is 20/20. But what if President Trump had kicked off his domestic legislative agenda with an infrastructure package? Would it have started the 115th Congress out on a somewhat civil footing? We will never know and the constant waves of controversy and the fallout from the Obamacare battering the White House from all sides certainly make ambitious legislative efforts such as tax reform and infrastructure investment seem a distant reality.

However, despite the seemingly never ending dust ups, the administration continues to pursue its policy agenda through the use of executive orders. While the news will likely not carry beyond the beltway to the places where Trump’s pro-growth and pro domestic investment message carried him to victory during the campaign, this week the President signed an executive order (EO) designed to lower regulatory barriers to infrastructure projects, and to speed up and simplify the process for obtaining necessary permits and clearances. Trump’s EO calls for reducing the wait time for environmental reviews and authorizations by federal agencies to approximately 2 years. Additionally, the EO mandates there be a “one federal decision” policy which means different agencies cannot render different decisions—the federal government speaks with one voice. The Departments of Interior and Agriculture will act as lead agencies where appropriate and “[facilitate] the identification and designation of energy right-of-way corridors on federal lands for government-wide expedited environmental review for the development of energy infrastructure projects.”

The Administration’s decision to address the regulatory streamlining side of the infrastructure investment and reform equation first, falls in line with the Administration’s cues to date on how it views this effort should come together; namely, that it will be a bill that tries to catalyze private investment infrastructure with possibly a 80/20 private to federal funding mix. Thus, the EO falls right in line with attempting to institute policies and a framework that will provide certainty to private investors looking to invest in infrastructure. Following the order’s release, Cass Sunstein, President Obama’s former Administrator for White House Office of Information and Regulatory Affairs praised the order, stating that it is a necessary step towards improving the nation’s roads and bridges. However, at the same time, the order received a swift rebuke from the ranking Democrat of the House Transportation and Infrastructure Committee, Peter DeFazio (D-OR). While the Democrat report questions the Administration’s characterization of how much the current regulatory framework is responsible for delaying infrastructure projects, the critique sets up the more substantial fight that is likely to play out in Congress, regarding how much the federal government should commit to spending towards the effort. Because despite the regulatory hurdles in place, the nation’s infrastructure woes are not 100% attributable to regulatory red tape. Look for that spending number to be the key component of the Democratic ask for this bill at a time when it will likely take Democrat votes for the bill to pass. Rural Republicans will also be a worthwhile contingent to watch as the Administration’s faith in private investment to improve infrastructure will likely not play out in many rural states where much needed investment is simply not investible.

One of the highlights of the EO is the Council on Environmental Quality’s (CEQ) role in developing and implementing an action plan to improve environmental reviews government-wide. The CEQ will mediate disagreements between Federal agencies so a decision isn’t delayed amid bureaucratic disputes. The Office of Management and Budget (OMB) will develop a two-year government-wide modernization goal and ensure federal agencies take steps to achieve it. In typical Trump fashion of offering both carrots and sticks, agencies will also be scored on their implementation of the EO by the OMB through a performance accountability system and “poor performance will be considered in budget formulation and could result in the imposition of penalties.”

Simply put, the success of this EO will be by how well it is implemented. An EO that tackles an issue as large and complex as America’s infrastructural state will require laser focus and long-term, committed, hard work. Yet, with the never ending cycle of distraction after distraction hampering this administration’s ability to do substantive legislating in harmony with Congress, it’s not unreasonable to have low expectations. This might be the best opportunity for the Trump administration to turn the page and make progress on this key issue. Let’s see if they take it.


 

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                    Michael Best Strategies’ Energy Team

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