Public works used to be the glue of bipartisanship. Everybody from everywhere had a project that needed federal funding. Now infrastructure has become the definition of a political battleground.
In his America Jobs Plan released this week, President Biden stretched the definition of infrastructure in a modern economy and redefined how to pay for major improvements. On cue, the political battle has begun over what’s included and how much it costs.
Some perspective is useful before arguing over what’s in Biden’s infrastructure proposal and how he would fund at least part of the investment. For decades, infrastructure typically meant roads and bridges. Improvements were funded largely by fuel taxes and vehicle registration fees. Airport expansion and improvements were funded by an assortment of user fees. Water and sewer system improvements also relied largely on customer surcharges. Funding for other forms of infrastructure investment came from congressional earmarks or competitive grants, which emphasized a dimension of political popularity and favored congressional seniority. Funding for ports and public transit came from assorted taxes, which usually sparked political debates.
None of those funding schemes take into account the big picture or the level of overall investment in infrastructure. Improvements were piecemeal. It was left to interest groups and state or local public agencies to issue reports on the status of roads, bridges, ports, airports, rail, transit and water and sewer systems. Not since President Eisenhower pushed for creation of the Interstate Highway System after World War II has there been a national effort to fund a wide range of infrastructure improvements.
Arguably, the United States has been more dedicated to modernizing its military and pioneering space exploration than maintaining and modernizing the nation’s basic infrastructure.
The COVID-19 pandemic has exposed gaping holes in the nation’s safety net, including shortages of housing for America’s expanding older adult population and to combat rampant homelessness. The lack of physical space has bedeviled the delivery of mental health services and childcare. The disparity of who has been affected most by the virus underlined the reality of underserved communities. The readiness of American’s public health network has been put to the test. The reliability of major supply chains has been challenged. The value of public spaces and parks has been reinforced.
Climate change has forced rethinking about fossil fuels, the choice of vehicles and public buildings. Americans have been forced to reckon with more frequent disaster aftermath from storms, wildfires and flooding.
Intensifying competition with China has unmasked economic weaknesses – lost ground on next-generation technology innovations, the absence of a national infrastructure reinvestment strategy and unexploited retraining opportunities for displaced American workers at community colleges. Maybe the greatest exposed weakness is the absence of a plan to put Americans, including those in obsolete or fading economic sectors, back to work.
The world has changed since the 1950s when the lessons of a world war informed a decision to create an interstate highway system to enhance national security and domestic economic opportunities. The world also has changed since Lyndon Johnson’s War on Poverty in the 1960s, which was patterned after the New Deal and centered on filling gaps in the national safety net through programs such as Medicare, Medicaid and Head Start that have provided stability and opportunity for millions of Americans.
Since then, the United States has increasingly relied on the private sector to boost economic expansion and job growth. The recent emphasis has been on supply-side policies to reduce tax rates to spur investment and job growth. The federal gas tax is 18.4 cents per gallon and remains unchanged since 1993, even though fuel economy in vehicles has increased by 30 percent since 2004, which means the gas tax raises less money per miles driven.
Until the invention and mass adoption of the internet, personal computers and smart phones, hardly anyone thought about broadband capability. Now we worry about broadband deserts in rural areas and low-income neighborhoods.
Pew Research has found growing inequality between upper-, middle- and lower-income groups in America. Since 1970, the aggregate share of income for upper-income Americans has risen from 29 percent to 48 percent, while middle-income households have seen a drop from 62 percent to 43 percent. Lower-income families have remained at 10 percent or less of aggregate earnings. The wealth gap is sharper and rising more than the income gap, Pew says. Upper-income households now enjoy more than 80 percent of the nation’s collective wealth, while middle-income households only possess around 15 percent. The largest rate of income growth was achieved by the top 5 percent of US families.
The vast majority of US investment in research and development is conducted by private industry, led by manufacturers and technology companies. However, the US percentage of global R&D investment has fallen from 39 percent in 2001 to less than 30 percent. In the same period, China’s global percentage of R&D has risen from 15 percent in 2001 to around 25 percent.
Since unsuccessful presidential candidate Hubert Humphrey proposed full employment, there hasn’t been a serious effort to implement a national jobs policy. The federal minimum stands at $7.25 per hour and hasn’t been changed in 10 years. The Trade Adjustment Assistance program, created in 2015, provides aid to workers who have lost jobs or wages as a result of imports. Benefits include job training, job search, income support and relocation allowances. The program doesn’t focus on replacing old or dying industries causing huge worker displacements.
The bottom line is that America has a lot of decay in its economy, communities, physical facilities and support systems. The concept of infrastructure has expanded because just fixing roads and bridges won’t fix the other structural weaknesses the nation suffers. Increasingly, the structural weaknesses, not just the deteriorating roads and crumbling bridges, are impeding economic progress, income equality and a competitive edge against the likes of China.
The debate over the $2 trillion American Jobs Plan shouldn’t be limited to the price tag or the items traditionally identified as infrastructure. Biden’s proposal offers a perfect launch pad for a discussion of our widening infrastructure needs, the advantage of a national strategy and the long-term costs of doing a little versus trying to do what’s needed. The debate should center on how to make the smartest investments, not whether to make them.
The majority of items in Biden’s infrastructure package could attract bipartisan support on their own, such as improving road safety, increasing community resiliency, upgrading public school ventilation systems, bringing home critical supply chain links and paving the way for electric vehicles. Many of them have the potential to be immensely popular such as investments in childcare facilities, enhanced broadband networks, clean energy manufacturing and expanded public transit. Investments aimed pulling up underserved communities, hiring dislocated workers to replace aging pipes and building more affordable housing would be deeply appreciated.
Instead of pecking at one program or another in Biden’s plan, start the discussion with a simple question: “What kind of our infrastructure does America need to maintain its economic position, to give all Americans a decent opportunity to succeed and to own our future?”
Instead of pecking at one program or another in Biden’s plan, start the discussion with a simple question: “What kind of our infrastructure does America need to maintain its economic position, to give all Americans a decent opportunity to succeed and to own our future?” When the cost of the investments is totaled up, also estimate the cost of not making the investments for coming generations and the future of the American dream for everyone.
Some individual programs in Biden’s plan may fall by the wayside or be cut back in a serious analysis, but it’s likely a consensus plan would contain much more than just roads and bridges. Modern infrastructure, as we’ve discovered, involves a lot more than just concrete and steel.