Infrastructure appears to be back on the front burner with House Democrats and President Donald Trump calling for more than $1 trillion in investments.
House Democratic leaders unveiled a $1.5 trillion infrastructure investment plan Thursday, promising massive government spending on transportation, water systems, broadband internet and other projects.
Two days earlier, it was reported that the White House was considering a $1 trillion package. According to Bloomberg, the bulk of the investment would be in traditional infrastructure, like roads and bridges. It would also set aside funding to expand 5G and rural broadband.
Both plans are being discussed at a time when the federal government has already poured more than $3 trillion into coronavirus relief efforts and are continuing to look for ways to bring back jobs and grow the economy.
Politicians on the left and right have argued that the timing may be perfect for the United States to catch up on infrastructure investment. Unemployment is high, borrowing costs are low, many people are still working from home, meaning less stress on transportation and transit systems. Moreover, the United States is at least three decades behind in infrastructure and has a roughly $2 trillion investment gap to fill over ten years, according to the American Society of Civil Engineers (ASCE).
"There is tremendous interest in the country in building the infrastructure," House Speaker Nancy Pelosi, D-Calif., said at a Thursday press conference citing President Donald Trump's stated interest in it. "We think that this will be nonpartisan, very bipartisan and we look forward to working together, House and Senate, Democrats and Republicans and with the White House."
Amid the coronavirus crisis, President Trump has repeatedly urged that the timing was right to "have a big Infrastructure Phase Four." In March, he cited the Federal Reserve's historically low rates and later called for a $2 trillion investment "focused solely on jobs and rebuilding the once great infrastructure of our Country!" The statements were never followed by concrete proposals.
On Thursday, President Trump sent more than a dozen tweets announcing close to $1 billion in Department of Transportation grants to states to improve highways and bridges. A broader package is being kept under wraps.
The White House press secretary confirmed this week that the administration is discussing infrastructure with congressional Democrats. "It's something that we think that we could find common ground on," Kayleigh McEnany said Wednesday. "No formalized plans, though, on where infrastructure stands."
According to Reuters, the Trump administration is expected to release further details of its trillion-dollar infrastructure package in July. Democrats have promised to have their $1.5 trillion bill ready for a vote on the floor before July 4.
In addition to bridges and highways, the Moving Forward Act would invest in clean water and wastewater treatment facilities which currently have only 30% of the funding they need. There would be money for ports and inland waterways where roughly half of the country's locks and dams have passed their design lifespan. The bill would also expand broadband access, rebuild schools and affordable housing.
While House Democrats have included $15 billion in infrastructure spending in their most recent coronavirus relief bill, they are pushing the Moving Forward Act as a coronavirus "recovery package."
"We're going to need a lot of jobs when we come out of this; a lot of jobs aren't coming back," said Rep. Peter DeFazio, D-Ore., the chairman of the House Transportation and Infrastructure Committee.
Many of the jobs created by infrastructure investment tend to be high-paying with opportunities in construction, design, engineering, manufacturing and technology. According to a study by Duke University, every $1 billion invested in transportation infrastructure had the potential to create up to 1 million jobs.
"The impact of investing in infrastructure has the greatest multiplier effect of any federal dollars ever spent," DeFazio emphasized. Infrastructure also has "the strongest buy American requirements of any part of the federal government," and House lawmakers made those requirements even stronger in their bill.
NOW IS THE TIME, BUT NOT ACCORDING TO THE POLITICAL CALENDAR
Experts have offered a lot of reasons to put infrastructure back on the table now, particularly considering the medium to long-term impacts on the economy.
According to Beth Ann Bovino, S&P Global Ratings chief U.S. economist, a $2.1 trillion investment in infrastructure, larger than the one proposed by the House, could add as much as $5.7 trillion to the U.S. economy over the next decade. That would follow a period when the economy is expected to contract by nearly 12%. The investment could add more than 2.3 million jobs in just four years while boosting wages and average household income.
"The opportunity to build infrastructure (and create jobs) during the Great Recession in 2009 was missed," Bovino wrote. "Right now, the U.S. may have a second chance."
Yet the United States may still miss its second chance. One of the biggest issues standing in the way this time is the 2020 political calendar.
"I think it's going to be difficult for Democrats to hand the president a win right before a presidential election," said DJ Gribben a senior fellow at the Brookings Institute and founder of Madrus, LLC, an infrastructure consulting firm.
President Trump has consistently pushed infrastructure investment since his 2016 election bid. Getting a bill passed before November would mark a significant legislative win on the economy, his main reelection issue.
It would not be the first time partisan politics derailed an infrastructure plan. Last year, bipartisan negotiations for a $2 trillion infrastructure deal ended after Trump stormed out of meeting, demanding Democrats stop investigating his administration. When Trump first took office he launched "infrastructure week," which ended in a partisan blowout over the Russia investigation and soon became a running joke in Washington.
"We need an infrastructure bill but it's unlikely we're going to get something constructive until after the election," said Nicole Gelinas, an urban economics expert at the Manhattan Institute. "If we had functional congress and a functional administration, it would be a great time to accelerate infrastructure work but that's not what we have."
Congress also has other funding priorities ahead of infrastructure. In May, the House passed a $3 trillion coronavirus relief bill, the HEROES Act. It contained $15 billlion for state departments of transportation. But significant portions of the bill called for funding to help state and local governments avoid massive budget shortfalls amid the pandemic.
Since very little infrastructure is federally owned, it will be cities and states doing the building. Most will be trying to secure emergency aid to merely continue operations and avoid a deficit before considering new projects, Gelinas explained.
Another issue that could prove to be a significant roadblock is the push to ensure any 21st-century infrastructure program is climate-resilient and has minimal to zero impact on carbon emissions.
After the Democrats won back the House in 2018, congressional leaders insisted that any deal on infrastructure had to both mitigate climate risks, like severe weather and rising sea levels, as well as help the country transition to a clean energy economy.
"I think prior to that, funding was the big issue," Gribben said. "Now we have funding plus the need to reach some kind of consensus around climate change. Unlike infrastructure, there's not much consensus around climate change."
On Thursday, Speaker Pelosi emphasized the Moving Forward Act would focus on "building the infrastructure of America in a green and resilient way."
Republican members of the House Transportation Committee denounced the proposal as "partisan" and "more Green New Deal nonsense," dubbing the legislation the "My Way or the Highway" act.