The U.S. House of Representatives passed an over $1 trillion infrastructure package just before midnight on Friday, November 5, 2021. The bipartisan bill, which already passed the Senate in August, now moves on to the Executive branch for President Biden’s signature.
While intraparty challenges among Democrats kept the bill from passing the House until this week, the final vote puts an emphasis on infrastructure, broadband, and highway improvements across the country. A subsequent reconciliation package focused on social issues, climate, and other priorities dubbed “human infrastructure” is expected soon.
The aging infrastructure within the United States has been a hurdle to both economic growth domestically and U.S. competitiveness internationally. The American Society of Civil Engineers graded U.S. national infrastructure overall as C- earlier this year. Costs to the economy from traffic congestion alone cost the U.S. over $120 billion per year, while delays at airports and the subsequent trip cancellations cost the economy an additional $35 billion per year.
This infrastructure bill seeks to allocate massive funding to fix the nation’s outdated infrastructure and includes the following allocations:
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- Roads, bridges, and major highway projects: $110 billion
- Passenger and freight rail: $66 billion
- Public transit: $39 billion
- Airports: $25 billion
- Port infrastructure: $17 billion
- Transportation safety programs: $11 billion
- Electric vehicles: $7.5 billion
- Zero and low-emission buses and ferries: $7.5 billion
- Broadband internet: $65 billion
- Power infrastructure: $73 billion
- Clean drinking water: $55 billion
- Resilience and Western water storage: $50 billion
- Removal of pollution from water and soil: $21 billion
- Revitalization of communities: $1 billion
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While the investments to American infrastructure are needed, the price tag of this bill will be a factor in adding $6 trillion to the national debt when combined with other spending programs over the past two years. A portion of the bill’s spending comes from previously authorized congressional spending. New spending from bill (around $550 billion) will be paid for in part with unused COVID-19 relief funds and other federal funds including unused unemployment insurance. Despite this, the Congressional Budget Office (CBO) estimates that these revenue sources will not raise enough to cover the full cost over the next decade.
In addition to costs, critics point to several items also included in the bill that have less to do with traditional infrastructure investment. Among these are items granting $400 million in COVID-19 relief to American universities, $500 million for tree equity, and $75 million for a study into income-based road usage fees. Other new spending spans climate change initiatives, supply chain studies, social and racial focuses, other programs.
With physical infrastructure in need of attention, money going to roads, bridges, and resilience are critical, but studies and new programs are potentials for waste. With the high price tag coming amidst the backdrop of persistent inflation, each new debt-financed dollar will be less impactful at elevating American infrastructure. The bipartisan infrastructure bill nevertheless provides needed funds, critical attention, and relief to networks and systems in need of maintenance and improvements. Other provisions may serve to elevate communities and boost the economy through access to high speed internet and transportation systems.
Still needed –continually– will be private innovation and technological solutions to current and future infrastructure challenges. These will be a hedge against inflation, drive down costs, improve public safety, and safeguard the infrastructure systems relied on by millions of Americans every day.
Written by Roy Mathews, Public Policy Associate
The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization. An innovative think tank, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, energy, infrastructure, innovation, technology, and transportation.