Infrastructure
https://www.cfr.org/backgrounder/state-us-infrastructure
https://www.cfr.org/event/renewing-america-fixing-americas-infrastructure
The Senate has taken the first steps towards passage of the hard infrastructure package. It addresses roads and bridges, broadband, water, lead pipes, seaports and airports, railroads, ferries, river navigation, and public transit. It costs about $1.2 trillion over five years and will add $550 billion in new spending, and it will add $250 billion to the federal deficit over the next decade. The Senate vote was 69-30.
When you travel to other countries, you appreciate how much the US lags on highways, airports, broadband, rail and public transit. When you sit stuck in traffic or your planes are delayed, you appreciate the personal costs of our failures to invest in and maintain our critical infrastructure. Those add up: $120 billion per year for road traffic delays and $35 billion annually for plane delays. As a nation, we all saw last winter the impacts of the failure to maintain our energy infrastructure in Texas. Large dams have failed in California and crucial interstate bridges failed in Tennessee and Minnesota. Flint Michigan residents situated on the Great Lakes were drinking poisoned water from corroded lead pipes. The investments in our common infrastructure have multiplier effects of 3-1 in improved productivity and economic competitiveness.
In our nation’s history, we have been great builders of canals, railroads, the interstate highway system, the nation’s airports, telegraph, telephone lines, internet connectivity, power lines, rural electrification, sewage treatment, irrigation canals and vast water systems. These internal improvements have been financed by the federal government, by state and local governments, and by private developers operating in concert with government. After the large infrastructure investments in the post war years, we hit a wall in the 70’s and 80’s with stagflation and the tax revolts at federal, state and local levels and federal funding for infrastructure fell sharply and stayed down. This coincided with the decline in American manufacturing dominance, the loss of purchasing power of American workers and the growth in economic inequality.
Our biggest infrastructure investment gaps are in roads and bridges and the nation’s ports. How bad is it? One quarter of the nation’s bridges are deficient; 20% of airport arrivals and departures are late; Amtrak needs $30 billion; water, water treatment and irrigation systems need $632 billion; 18 million Americans lack any broadband access. We rank 13th globally in the quality of our infrastructure. We invest far less as a percent of GDP in infrastructure than the other developed nations, including Australia, Norway, Japan, France, Germany and the UK. More and more of the financial burden has shifted from the federal government to the state and local governments.
The Biden plan, as initially proposed, was for $2 trillion over five years; however, this included soft infrastructure and climate change funding, and was funded by an increase in taxes on the wealthy and large, profitable corporations. The bi-partisan Senate compromise was for $1 trillion over five years. It includes: $110 billion for roads and bridges, $39 billion for public transit, $66 billion for rail, $42 billion for airports and seaports, $65 billion for broadband, $15 billion for electric vehicles, $28 billion for the power grid, $55 billion for clean water, $46 billion to mitigate the impacts of drought, fire and floods, and $21 billion to clean up the environment.
Still to come are the budget reconciliation package for human (soft) infrastructure and climate change mitigation. This is projected at $3.5 trillion over 10 years; it would include the expanded child tax credit, paid family and medical leave, universal preschool, free community college, increased subsidies for individual health insurance, Medicare coverage of dental and vision services for seniors and lowering the age to qualify for Medicare. It would include measures to mitigate, reverse and reduce climate change. It would be paid for by increasing the corporate income tax rates from 21% to 28% and repealing the Trump tax reductions for the wealthy. No Republicans will vote for this package so it must be crafted to get unanimous Democratic support.
Prepared by: Lucien Wulsin
Dated: 8/10/21