What’s in the infrastructure bill?

On 15 November, President Biden signed a $1.2 trillion bipartisan infrastructure bill. So what’s in this infrastructure bill, and why is it important for the United States?

According to John Oliver, infrastructure is “basically anything that can be destroyed in an action movie.” Here’s his 2015 attempt to add some excitement to something we usually see as dull. (To be fair, a lot of engineering is about preventing excitement.)

Infrastructure supports nearly every aspect of life. Our pipes deliver drinking water to homes and hospitals. Airports, railroads, and inland waterways transport goods from farms and manufacturing plants to store shelves. The roads that crisscross the country allow us to get to work and school safely, and the network of transmission and distribution lines keeps the lights on and our electronics charged. Dams enable consistent water supply in arid climates, and levees hold back floodwaters to protect rain-soaked communities.—ASCE, 2021 Report Card for America’s Infrastructure

The infrastructure report card

Since 1998 the American Society of Civil Engineers (ASCE) has issued a report card every four years for the nation’s infrastructure. The overall grade for 2021 of C- isn’t very good, although it’s better than 2017’s grade of D+. Clearly, our infrastructure is not adequate for a rich country in the 21st century. Eisenhower’s interstate highway system, which dates from the mid-1950s, has aged long past its design life. Lead pipes in municipalities such as Flint, MI, can’t provide safe drinking water. Ports can’t unload ships quickly enough to keep them from backing up.

ASCE rates various types of infrastructure according to the following criteria.

  • Is its capacity adequate for current and future needs?
  • What is its condition?
  • Is there adequate funding to meet projected maintenance and repair costs?
  • What are the future needs, and will there be enough money to pay for them?
  • Can the owner operate and maintain it properly?
  • To what extent does its condition jeopardize public safety, and what would be the consequences of failure?
  • How resilient would it be under various types of threats and multi-hazard incidents?
  • How are innovations in materials, techniques, technologies, and delivery methods being implemented to improve the infrastructure?

The 2021 report card rated the following individual categories: aviation, bridges, dams, drinking water, energy, hazardous waste, inland waterways, levees, ports, public parks, rail, roads, schools, solid waste, stormwater, transit, and wastewater. ASCE estimates that to bring the nation’s infrastructure up to what it needs to be in the next decade would cost $5.9 trillion. With only $3.3 trillion already allocated, there’s a gap of $2.6 trillion. Biden’s $1.2 trillion includes both $550 million of new money and money that was already allocated to infrastructure. That is, the $1.2 trillion infrastructure bill is not nearly enough to complete the job.

The infrastructure bill

So where’s the money going? In addition to the $110 billion for roads and bridges and $66 billion for rail services, there’s $65 billion to improve broadband access, $6 billion to extend the life of nuclear power plants, and $7.5 billion for charging stations for electric vehicles. That is, the infrastructure bill uses a broader definition of “infrastructure” than ASCE does. Even so, it truly is an investment in the nation’s future.

According to The Economist, “The bill will not fix everything. But it could be the beginning of a process that will make a real difference.” For example, good locks and dams on the upper Mississippi help US soybeans compete in the global market. US farmers have high labor costs, but reliable waterways get their soybeans to the market at a competitive cost.

As a rough rule of thumb, an additional $100bn per year spent on infrastructure could boost growth by about a tenth of a percentage point when the digging actually begins, and potentially more if it catalyses additional private-sector investment, notes Ellen Zentner of Morgan Stanley, a bank. In the longer term, she estimates, a sustained expansion of infrastructure spending could support productivity and raise America’s potential growth by as much as a fifth of a percentage point, a big deal for a large, mature economy. “That’s why whenever you talk to economists, infrastructure is the stuff that we go to bed at night dreaming of,” says Ms ZentnerThe Economist, 11 November 2021.

However, The Economist remains skeptical about Americans’ willingness to pay the taxes necessary to fund all that construction. In addition, we need to spend the money efficiently. On the other hand, no matter how well we manage the projects, we won’t have everything we’d like. “Even so, better to fix roads, expand ports and lay broadband cables than not.”