NEWS

A Federal COVID-19 Response That Would Pay Dividends

14 Mar 2020

As Congress grapples with how to deal with the immediate health and public safety impacts of the COVID-19 epidemic, including making tests kits available and helping states with additional funding for safety efforts, many are also beginning to think about how to best mitigate any economic fallout resulting from the crisis.

The House of Representatives has passed a bill, supported by the administration, to alleviate sick leave issues, free testing, and more. A single bill, however, does not have to be the full response from the federal government. In fact, a single response from Congress may be far too narrow. More can and should be done for the sake of Americans, our economy, and importantly, our infrastructure.

President Trump initially proposed a payroll tax cut to help blunt the economic pain to individuals, but some lawmakers are looking for a more comprehensive solution, like stimulative infrastructure investment. While a payroll tax cut could provide an economic boost to those receiving regular paychecks, hourly workers or independent contractors who are adversely impacted by the health emergency would have no paycheck at all. Infrastructure investment on the other hand could solve multiple problems at once.

First, many of those most impacted by an economic slowdown are those in the building trades who would also benefit the most from an infrastructure rebuild. And, while a temporary tax reprieve can help folks get by, infrastructure investment will strengthen our economy in the short-, medium-, and long-term. Infrastructure importance is a bipartisan view, but when and how much to spend is less aligned.

In fact, the largest impediment to a massive infrastructure package in Congress has been disagreement over whether or not to fund such a large investment. Many lawmakers would argue that in the case of COVID-19, the money will be spent either way, so Congress may as well spending on something that is both needed and has bipartisan support.

For example, House Transportation and Infrastructure Committee Chairman Peter DeFazio (D-Ore.), said this week that now is an “ideal time” to invest in infrastructure because the federal bonds needed to finance projects are at record lows. Similarly, Rep. Rodney Davis (R-Ill.), the ranking member on the House Transportation and Infrastructure Subcommittee on Highways and Transit, said “…I certainly hope infrastructure — be it in this coronavirus period that we’re in or post-coronavirus — is the top bipartisan issue we can address before this Congress ends.”

Second, when the dust settles, the economic pain for those hit hardest will not be over. Missing out on paychecks or work during the current crisis means having less money to pay for necessities like food and utility bills both now and going forward. But an extra cost like vehicle repair caused by pothole-covered roads could be insurmountable. Even higher rates for public transit, which may arise out of this crisis could be a barrier for daily life. Infrastructure can save or cost consumers money in many ways.

Small business owners looking to expand need functional roads for customers to get to them, parking lots or street parking, telecommunications infrastructure to connect them to the world, and clean, abundant, and reliable energy. Each of these are supported by infrastructure, be it in the subcategory of transportation, telecom, energy, or others. And each of them needs federal attention.

Finally, with so many people working from home and avoiding events, it may also be the best time to commit to road and bridge maintenance and construction jobs that would otherwise shut down roads, cause traffic, and stunt economic activity by delaying productivity. Roads are conspicuously quiet in many areas of the country. And with officials recommending that organizations suspend large events, even small and intermediate sized events are canceling out of an abundance of caution. Putting people to work on the roads stimulates workers in need of pay and gets the work done without disrupting others.

By investing now in infrastructure, we can make real, long-lasting investments and shore up our economy when the current crisis subsides. America’s infrastructure crisis will be there on the other side of COVID-19 unless we deal with it. The time might just be right to do it now.

 

Written by Shane Skelton, Policy Advisor and Benjamin Dierker, Director of Public Policy