3
Exhibit 1
Shares of Public Spending for capital and for the Operation and maintenance of Transportation and Water infrastructure , 2014 .
Federal government ($ 96 billion )
71 %
29 %
States and local governments ($ 320 billion )
65 %
35 %
Operation and Maintenance : $ 27 billion for the federal government and $ 208 billion for states and local governments .
Capital : $ 69 billion for the federal government and $ 112 billion for states and local governments .
Source : Congressional Budget Office based on data from the Office of Management and Budget and the Census Bureau .
Trump ’ s administration undertook spending cuts to adjust a growing gap of infrastructure investment .
◆ Significant cuts were proposed in March aiming to spur economic growth and expand labour force . For instance , the Environment Protection Agency will experience a decrease of 31 % of their budget in order to support the infrastructure program . Massive cuts were applied to federal funding programs , a difficult situation for states wishing to close a profound gap . Pinnacle of Trump ’ s campaign , the budget allocated to improve can be seen as a readjustment to reduce the gap already exposed by the report of the American Society of Civil Engineers . Looking at the numbers , we noticed that the country ’ s needs in terms of investment is outpacing the current proposition of $ 200 billion . To maintain the nation ’ s surface transportation infrastructure through 2025 , the government will have to find $ 1 trillion to repair and build critical highways , bridges or transit rails necessary to improve the economic activity . Furthermore , in 2040 at least $ 3.2 trillion will be needed to only maintain the surface transportation infrastructure which is a significant amount of investment to restore the country ’ s productivity . Finding others source of funding is a real challenge for the U . S economy to finance their infrastructure deteriorated by the time . Going through the details could be useful to pinpoint critical infrastructure , we believe that the government could use PPP to construct critical infrastructure so they can transfer susbtantial risks to the private sector .
Indeed , the private sector will bring innovation and will reduce construction delays to permit a better allocation of the government ’ s resources in others areas . It could be also interesting to let projects of low importance to be handled by the private sector to expand the labour force and create opportunities for businesses to use infrastructure as a shield against inflation in a period of slow growth . ◆
American Infrastructure : Trump ’ s promise to rebuild America faces a dilemma with an unrealistic investment plan