Trump infrastructure plan relies mostly on funding outside the federal government's control

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President Donald Trump on Monday is to roll out his long-awaited infrastructure plan that could make it more hard to attract the federal funding being counted on for the Gateway Tunnel project.

But there's one major hole in the White House's proposal, Mr. Trump's plan relies nearly entirely on funding from entities outside the control of the federal government.

In a preview to its "infrastructure week" blitz, the administration said Sunday it plans to split the $200 billion in new federal spending in half, with $100 billion in "incentives" for matching dollars spent by state and local governments on infrastructure.

The White House is pointing to a wide variety of potential cuts in its budget proposal that could be used to offset the costs of the plan. "The president is counting on cash-strapped local governments to put up 80 percent of the cost of infrastructure projects, this comes after Republicans squeezed state and city budgets by capping the state and local tax deductions".

Trump is set to host a meeting with state and local officials on his proposal Monday, but it is not clear if any of them will be from NY.

"There will be a lookback provision so that states and local governments who have already recently raised revenues aren't penalized for being forward thinking and implementing the types of policies that we're encouraging through this program", a senior administration said.

The rest of the money would support other infrastructure-related undertakings, including existing loan programs like the one operated by the Environmental Protection Agency under the Water Infrastructure Finance and Innovation Act, which White House officials said could leverage up to $40 in local and private money for every $1 in federal investment. The rural programme aims at that, the officials said.

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The additional spending could increase the deficit to about $1.2 trillion in 2019, and there's a risk that interest rates "will spike" as a result, Mulvaney said. And how do we know they truly care about them?

The principle is based on polls which show that the public would prefer to invest locally, in projects that they benefit from, rather than send money to Washington and wait for the Federal government to invest - in a process that is hampered by the Washington bureaucracy that has often been a target of the President.

Topping the priorities in the budget plan is the $200 billion request in federal funds to spur about $1.5 trillion in infrastructure investments with state, local and private partners, Mulvaney said.

"Monday's our opening in terms of providing ideas to Capitol Hill", senior administration officials told reporters.

And he said if local governments do engage in the Trump plan, it could result in an even heavier tax burden on residents in NY and other high-tax states where many taxpayers likely will pay more federal taxes because they can deduct only $10,000 in state and local taxes from their federal returns.

The official said the default mindset for how to fund infrastructure projects needs to shift. That levy has been 18.4 cents a gallon since 1993, and inflation as well as rising vehicle fuel efficiency have reduced its usefulness in raising enough money to keep pace with fix needs.

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