Three focuses of my blog are Current Events, Financial Literacy/Money and Business/Entrepreneurship. President Joe Biden’s infrastructure bill has been in the news for quite some time. Most citizens don’t have time to understand what’s in it though as is often the case with politics. The following contributed post is entitled, An Inside Look Into Biden’s $2 Trillion Infrastructure Bill.
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2021 has been a year for the books for so many reasons, and not all of them were bad, but from a landmark news perspective, if you’re anything of a news nerd or politics junkie – you’ve had one of the best years ever.
Controversial courtroom rulings like the Kyle Rittenhouse not guilty verdict, to the bizarre story of Jussie Smollet – and we haven’t begun to look at all of the ongoing Covid news stories that just never seem to end. If you’re not an avowed optimist, you’d be having a very hard time indeed.
But, somewhere in between all of the madness of the year that was(n’t), came news of what some are calling the best thing to happen to domestic spending in history, and what others have called the biggest disaster to spend in the United States, but whatever you views on this landmark announcement are one thing is for certain, it is going to leave America physically changed. It is the massive infrastructure bill recently passed into law, and it effectively amounts to $2 trillion, although the amount in the discussion was actually $1 trillion. Well, that also depends on who you believe because some forecasters believe that the final bill will be closer to $3 trillion. That’s $ 3,000,000,000,000 to you and me.
With all of this lovely money swishing about, already questions are being asked about where this money is going to be spent? Who stands to benefit? Who decides where this money gets spent, and perhaps most importantly – where is this money going to come from? We’re going to try and unpack some of these questions now.
Essentially, President Biden’s (officially) $2.3 trillion (or that may actually be $1.8 trillion) infrastructure plan has prioritized spending on transportation, drinking water as well as broadband projects and it comes after the American Society of Civil Engineers released a report in 2021, some call it the report card, on which American infrastructure scored a dismally low, C-minus.
This prompted massive studies across the nation conducted by various government agencies and local authorities to determine which areas had the biggest and most urgent need. The question many wanted answering though, is just why has our infrastructure been allowed to fall into such a state of disrepair in the first place? You may find that that, is a very loaded question, but what all sums have been done and all arguments made, the answer is written rather succinctly by the American writer, Kurt Vonnegut:
“Another flaw in the human character is that everybody wants to build and nobody wants to do maintenance.”
And that is quite the crux of it all, as administration after administration since Regan have all just about had ambitious plans to revitalize America’s roads, bridges, urban centers, schools, rapid and mass transit systems, and more.
That in turn, leads us to the next very important question – how much of our infrastructure needs to be fixed or upgraded anyway, and why is it so outrageously difficult to get politicians to agree on it?
As with all things political, there are a few answers to that question.
Firstly, roads, bridges, etc. are all designed (in principle at least), to have as long a life-span as possible and with the knowledge that at some point, their ‘parts’ are going to wear out. The longer something is intended to last, the more expensive it’s going to be to build.
For example, the bridges that form America’s Interstate Highway System, which was started during the Eisenhower administration (more than six decades ago), are now very much nearing the end of their intended lifespan and worryingly, in the case of some of them – are probably beyond their lifespan. Sixty years is a long time for any object to take the pressure and pounding that these bridges take every day – without significant investments in maintenance and upgrading.
Then there is the real reason and if you’ve been thinking it’s all money-related – you’re right. America’s infrastructure is controlled by the public sector – in other words, taxpayer-funded. A lot of the funding for the maintenance of these giant projects like highways and bridges is provided for by federal and state gasoline taxes. To effectively maintain these projects, a lot of money is needed – money, that comes directly from taxes. Taxes that will have to be increased to afford these upgrades and maintenance projects, tax increases, that can cost politicians – their careers.
Then you have the legacy issue. Politicians are not huge fans of making their successors look good. It takes a long time to get approval from all the moving parts in government to get this spending into place, and often it looks like it may happen just as a Presidents term is about to end. That would mean that the next guy gets to take the credit for what his predecessor effectively put into place, and to turn a phrase, ain’t nobody got time for that.
Then, there is the question of visibility. While bridges, tunnels, and roads are in plain view, some other parts of America’s infrastructure are not so easily noticed, until they stop working. Think sewer lines.
So, which states are going to benefit the most?
According to this report by CNBC, the states that are likely to win big (that means cash in the most) are, New York, Texas, and California with critics citing that it is rather some of the more underpopulated states with less developed rural economies like Montana and Alaska, that should get a bigger share to compensate for much fewer tax revenues.
Well with all of that being said, we’re certain that there will still be lots and lots of quarreling and across the floor back and forth to determine that amount.
Meanwhile, all is not entirely silent in Washington. It appears that there is something of a brouhaha about it all, and more than just a little dose of déjà vu happening too. It all started with Donald Trump’s term in office. He pledged to spend $1 trillion specifically focused on rebuilding America’s roads and bridges. That amount was eventually upped to $2 trillion, but despite all his enthusiasm for the plan, it wouldn’t amount to much, and the term infrastructure week (the period when all of this debating was happening), would become used as something of a euphemism for, futility. Not our nation’s best work.
So, just to create some understanding of what we’re talking about when the word infrastructure is used in this context, we agree that the term infrastructure is something of a ‘hold all’ term that refers to roads, bridges, tunnels, rail lines, dams, buildings, systems that supply water and electricity for example. It basically covers all of the systems that the American civilization needs to function.
Joseph Schofer, a professor of civil and environmental engineering at Northwestern University says that infrastructure is “the built environment that supports our lives”.
OK, so let’s go a little deeper, where is this money going?
Roads and bridges: At the very top of the 2,702-page bill’s spending outlines, roughly $110 billion of new funds will be allocated to improving America’s roads and bridges, as well as investment in other major transportation programs. Everything from Asphalt Resurfacing to major upgrades and new road construction.
Public transit: This spending program also includes the largest-ever federal investment
program of its kind in public transit with a massive $39 billion going to modernizing systems, improving access, and repairing over 24,000 buses, 5,000 railcars, and thousands upon thousands of miles of train tracks.
Amtrak: Biden’s plan hails the largest investment in passenger rail since the
creation of Amtrak, over 50 years ago. There is an eye-wateringly, giant $66 billion that’s heading to Amtrak for the development of high-speed rail, safety upgrades, Amtrak grants as well as ‘modernization’ of the route that connects Washington, D.C, and Boston.
Added to that list are massive investments in airports, broadband internet, urban center regeneration, green initiatives, clean energy, electric cars, buses, and ferries, clean drinking water projects, and road safety.
Perhaps this is a good time, to start a construction company then.
What do we really love about this program? The massively long-overdue investment into our Great Rivers and Lakes. The bill has more than $50 billion for water infrastructure improvements and about $1 billion is slated for the Great Lakes Restoration Initiative. An initiative that proposes a major clean-up program that targets toxic hot spots (areas of shockingly bad industrial pollution), with a further $17 billion going to ports and waterways.
Love it or hate it, there is no denying that if these plans are implemented as they’re intended to be, that America’s infrastructure will enjoy more investment than it ever has, and with around 19 million jobs that are anticipated out of this program, the overall economy should see a significant boost too.
Whichever way one looks at it, it’s probably very much overdue, and about time.
You’ll find a detailed and in-depth look at the bill on the White houses’ website, here.