Federal construction projects are funded through a two-step process: authorization and appropriation. Whereas authorizations provide the authority and parameters for federal spending, no construction projects break ground without spending first being made available to federal agencies through the annual appropriations process.
President Trump released his first budget request covering fiscal year 2018 that also looks out over the next 10 years (2018-2027). The proposal, “A New Foundation for American Greatness,” calls for $1 trillion in total tax cuts over the next 10 years, while also cutting federal spending by $4.6 trillion over that same time period. The budget assumes the economy will grow by $2.1 trillion, which would reduce 10-year deficits by $5.6 trillion and balance the budget in FY 2027.
As with most budgets submitted by respective administrations, President Trump’s is largely seen as a messaging document that primes the budget and appropriations debate for the coming year. This year however, the budget carries a bit more relevance due in large part to the president’s promise to include $200 billion for his infrastructure initiative. The budget did provide a fact sheet detailing four key principles for the White House’s initiative, but did not provide any details on a specific infrastructure plan.
In terms of federal construction accounts tracked by AGC, the budget is status quo with previous year’s appropriations and budget requests—approximately $120 billion. While the budget provides significant funding increases for border wall construction and a $5 billion dollar down payment on the administration’s infrastructure initiative, it also cuts TIGER grants, Capital Investment Grants for transit projects, rural water programs, and the Community Development Block Grant Program. Even more troubling, the budget assumes that funding for the Highway Trust Fund will be cut by $95 billion in 2021.
A full analysis of the FY 2018 budget for federal construction accounts can be found here.
Additional details on budget funding and policy issues—including the infrastructure initiative—can be found here.