Democrats, led by Senate Minority Leader Chuck Schumer of New York, will present a plan to spend $1 trillion to upgrade the nation's infrastructure on Tuesday. The issue was raised in a meeting on Monday between congressional leaders and President Donald Trump. Democrats are searching for common ground with the new president. At the same time, they are seeking to score a win against congressional Republicans, who prevented an increase in infrastructure spending during President Obama's two terms, citing the need to contain the federal government's debt – which now stands at nearly $20.0 trillion.

At $289.3 billion in November, total monthly public construction spending remains well below its peak of $325.5 billion in March 2009, according to Census data obtained via the St. Louis Fed (the data are seasonally adjusted at an annual rate). Federal construction spending accounted for just 8.5% of the total in November. 

According to the New York Times, Senator Schumer argues, "From our largest cities to our smallest towns, communities across the country are struggling to meet the challenges of aging infrastructure." The plan will reportedly devote "$180 billion to rail and bus systems, $65 billion to ports, airports and waterways, $110 billion for water and sewer systems, $100 billion for energy infrastructure, and $20 billion for public and tribal lands." Other initiatives include expanding broadband access to rural areas as well as money for veterans' hospitals, water treatment facilities and schools.

Democrats also hope to leverage Trump's background as a real estate developer and his cultivated image as a "builder" to push their agenda. The Washington Post reports that Trump asked Richard LeFrak and Steven Roth, both of whom are also real estate developers in New York, to advise him on infrastructure projects. Trump proposed financing his plans through tax credits and public-private partnerships. One proposal is reported to call for $137 billion in tax credits to generate the requisite $1 trillion in private investment over ten years. These projects are typically transportation-related, like toll roads. Trump's Transportation Secretary pick Elaine Chao told senators during her confirmation hearing that she wanted to "unleash the potential" of the private sector to rebuild infrastructure. (See also: Stocks, ETFs to Watch During Donald Trump's Presidency.)

If Senate Democrats can use Trump's early-term political capital to pass major fiscal spending on infrastructure, construction firms like Caterpillar Inc. (CAT) will likely benefit. ETFs like the  iShares Global Infrastructure ETF (IGF), which has gained 5% since Trump's election in November, are also likely to reflect the government's profound shift away from eight years of Republican austerity to a new public works program that could be billed as The New Deal Lite.


Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.