U.S. Infrastructure: A New Hope

Infrastructure is a bipartisan issue, except for the price tag, and politics always has a way of complicating things.

This year is the first time since the Great Recession that the United States may finally enact a broad infrastructure investment package. Promises of bipartisanship, Senate and House majorities, and strong political leadership atop the U.S. Department of Transportation (DOT) set-up this year as the best hope for something to finally get done.

Biden’s Administration formally began two weeks ago and has just 18 months before campaigning begins in earnest for the midterm elections. If any substantial infrastructure package is not enacted by then, the U.S. may yet again miss another opportunity. Now is the time!

Moynihan Train Hall (January 2021); New York, NY Source: Office of Gov. Andrew M. Cuomo

A Time for Transformational Change

The havoc wrought by the pandemic exposed deep faults in the country’s social and physical infrastructure and reenergized the need to build. Rahm Emanuel famously said in 2008:

“You never want a serious crisis to go to waste. I mean, it’s an opportunity to do things that you think you could not do before.”

The human and economic toll of the pandemic cannot be ignored; the country does itself a disservice to future generations if it fails to act. A new administration has the best opportunity to enact the kind of transformational change that’s needed.

Inequities brought to the forefront this past year underscore numerous concerns. According to the Brookings Institution, “COVID-19 has exposed the continued neglect of our water infrastructure” with lower-income and minority communities facing some of the greatest water inequities. Major cities like Chicago have a significant lead contamination problem and events in Flint, MI and Newark, NJ have increased national attention on the issue.

Many people face eviction, were late on mortgage or rent payments, and those at the lower end of the income scale faced heightened housing insecurity. According to the National Low Income Housing Coalition (NLIHC), the U.S. is short more than 7 million homes for extremely low-income renters. In the San Francisco Bay Area and other western metros housing costs have skyrocketed in recent years from an influx of residents and lack of affordable multifamily housing. Incentivizing cities and smaller communities to invest in new housing and changing zoning laws is a crucial first step.

Source: National Low Income Housing Coalition

These water and housing inequities are among many non-traditional infrastructure problems taking a prominent role in public debate. During the campaign, President Biden supported new investments in cities and a “second great railroad revolution” among his proposals. The social and physical issues on top of the country’s crumbling infrastructure compound the challenges. Selling any broad infrastructure package will be difficult, but there is greater potential something can pass with President Biden placing a rising star to lead the U.S. DOT.

Political Acumen at the Top of U.S. DOT

The confirmation of Pete Buttigieg as Secretary of the U.S. DOT brings a rising political star and charismatic speaker to a position not known for being high profile. His ability to elevate the mission of the DOT, bring the administration’s infrastructure message to the masses, and deliver on this crucial policy goal affects the administration’s success and his own political ambitions.

Introduction of Pete Buttigieg as U.S. DOT Secretary nominee (Dec. 16, 2020)

DOT has over 55,000 employees and an $87 billion budget with more than a dozen administrations overseeing the nation’s airspace, highway system, pipelines, and more. The position of Secretary typically requires a deep understanding of federal bureaucracy and disbursements of funds (skills not typically known for launching presidential hopefuls). Nonetheless, infrastructure has been a critical part of Biden’s “Build Back Better” platform and Buttigieg has the skills to carry this over the finish line.

Delivering on any broad infrastructure package will depend on the Senate. The administration’s push for a large third stimulus package in its first month, absence any funding for infrastructure, could limit Congress’ desire for future spending. Deficit hawks are already circling as two rounds of fiscal stimulus have pushed public debt to new heights not seen since World War II. Navigating an evenly split senate, midterm elections in two years, and political divisions over future spending make selling infrastructure difficult.

Source: Congressional Budget Office, “The 2020 Long-Term Budget Outlook”

While new infrastructure spending is popular among voters, divisions arise on how its should be funded. Despite the need to increase the federal excise tax on motor fuels, it is politically unpopular. Support for new roads, bridges, and rail stations quickly evaporates when you start discussing how to pay for them. Adding an infrastructure bill on top of a third round of fiscal stimulus will face political resistance.

Source: Vox.com

A New Hope

I have watched numerous weeks devoted to infrastructure go by without any meaningful action. As the New York Times put it:

“Infrastructure Week” is less a date on the calendar than it is a “Groundhog Day”-style fever dream doomed to be repeated.

The lack of investment in the decaying assets of the U.S. spreads throughout all areas of the country. Eroding lead pipes contaminate drinking water, bridges and tunnels carrying millions of commuters are at risk of collapse, and past planning decisions have been detrimental to economic growth and social equity.

If the U.S. finally wants a federal infrastructure plan, this is the right team at the right time. Investment is only likely to occur after a crisis with strong political leadership at the helm. The team assembled within the Biden Administration has the experience and political know-how to get things done. Infrastructure is one area likely to receive broad bipartisan agreement and could be a win for the administration in what’s remaining of its first 100 days.

For more of my thoughts and what I’m currently reading, follow me on Twitter @WhatTimTweets. Tweets and any opinions are my own.

State and Local Government Finance | Cities, Transit, Infrastructure, Economics, Demographic Change. Opinions are my own.