We should be looking at the ways in which we can do the spending so that we are getting the most bang for the buck.Economist James Poterba, Massachusetts Institute of Technology, on a new infrastructure spending bill expected to pass the Senate.
- The $1 trillion bill has roughly $550 billion in new spending.
- Some suggest it will have limited impact on the economy because of the lower price tag (compared to other stimulus plans), and a longer timeline (it will be spent over the course of a decade).
- The bill is expected to pass the Senate with bipartisan support. It will then go to the House of Representatives, where it also needs to pass in order to become law.
- Something To Consider: When the federal government passes plans like this, it can lead to states cutting their budgets for the same items (because the federal money can be used instead of state funds). When this happens, it leads to mixed forecasts about how much a stimulus plan will truly boost NEW projects like bridges, roads, and public transportation (a few items supported in this particular bill).
- Why It Matters: An infrastructure bill has long been sought as a subject of bipartisan support. This represents another round of stimulus, on top of the nearly $6 trillion already flooding into the economy to blunt the impact of the COVID-19 pandemic.
What’s in the agreement for roads, bridges, transit and water?
The bill includes $110 billion in funding for roads, bridges and major projects, as well as $39 billion to modernize and make public transit more accessible to the disabled and elderly. Significant chunks of that money will go to major city transit systems, like New York City’s, based on federal funding formulas.
The deal also includes a $66 billion investment in rail maintenance, modernization and expansion, most of which will go to Amtrak. It would also alter Amtrak’s stated mission to focus on “the intercity passenger rail needs of the United States” rather than turning a profit or at least breaking even, something the system hasn’t done since its creation in 1971. The system is attempting a major overhaul to provide a reliable alternative to flying and driving outside of just the Northeast Acela corridor.
The legislation will provide $11 billion in funding for highway and pedestrian safety programs. A total of $7.5 billion will go to implementing a network of electric vehicle chargers, and another $7.5 billion will be used for zero-emission or low-emission buses and ferries. Ports and airports will be boosted with $42 billion in new spending.
The group agreed to spend $50 billion to bolster the country’s infrastructure generally against climate change and cyberattacks. Another $55 billion will go toward clean drinking water and $65 billion will go toward broadband infrastructure and development. The deal invests $21 billion in removing pollution from soil and groundwater, job creation in energy communities and a focus on economic and environmental justice. The legislation will include $73 billion to update and expand the power grid.
by Jenna Lee,