What’s inside the $1 Trillion Infrastructure Bill
On August 10, 2021, the Senate voted 69–30 to approve a roughly $1 trillion bipartisan infrastructure bill. This bill combines previously approved funds with $550 billion in new spending that the Senate approved on July 28. The legislation focuses on improving roads and bridges, internet infrastructure, electric vehicles, water systems and port infrastructure. The bill now goes to the House of Representatives.
Why is the infrastructure bill important?
The World Economic Forum (WEF) ranked the United States №13 by the quality of its infrastructure, which is a high score relative to other developed nations. The US is performing especially well in airport and road connectivity. However, there are areas where the US is falling behind, such as railroad infrastructure and road infrastructure, which are ranked 48th and 17th, respectively. Moreover, the US has received relatively low scores for reliability of its water supply and electricity supply quality, which are ranked 30th and 23rd, accordingly.
But what about China, America’s largest rival? WEF ranked China’s infrastructure №36. However, China has been investing heavily in its infrastructure during the past decade. According to the data by OECD, China spends more than 5% of its GDP annually to upgrade inland transport infrastructure. In contrast, the US spends 10x times less, or only 0.5%. As a result, WEF’s ranking of China’s infrastructure has also improved substantially during the past 10 years, rising from 46th in 2009 to 36th in 2019.
However, the new infrastructure bill goes beyond political confrontations. It aims to help current and future generations combat climate change by investing in electric vehicles, empower rural communities by providing access to the internet, improve health through better water systems, and provide the foundation for a strong economy through better quality roads and bridges.
What parts of the US economy does the bill address?
Roads & bridges: The largest investment, $110 billion, would be assigned to roads and bridges. According to the American Society of Civil Engineers (ASCE), 40% of road infrastructure in the US is in poor or mediocre condition, and motorists are forced to pay over $1,000 every year in wasted time and fuel. There are also over 617,000 bridges in the US, and whereas 7.5% of the bridges are considered structurally deficient. A recent study by ASCE shows that the nation’s backlog of bridge repair needs is $125 billion. Thus, the $110 billion aims to upgrade roads and bridges with a focus on climate change mitigation, resilience, and safety for all users, including cyclists and pedestrians.
Railway: The deal would also invest $66 billion in passenger and freight rail. Of this amount, $22 billion would be provided as grants to Amtrak, making it the largest investment in passenger rail since the creation of Amtrak 50 years ago. Infrastructure-related issues continue to be the largest source of delays, which caused 328,000 train-delay minutes in 2019 alone. The infrastructure bill would address deferred maintenance, enhance existing corridors, and build new lines in high-potential locations.
Water infrastructure: Additional $55 billion would be invested in water and wastewater infrastructure, making it the largest investment in clean drinking water in US history. The investment will replace all of the nation’s lead pipes and service lines. According to a study by researchers from the CDC and NCEH, an increase in drinking water with lead results in cognitive impairments and reduces human capital in areas where lead pipes are present.
Other projects: Other notable projects include investments in modernizing public transit, which would improve accessibility for the elderly and people with disabilities and replace thousands of transit vehicles with zero-emission vehicles ($39 billion); addressing repair and maintenance backlogs at airports ($25 billion); building a national network of electric vehicle (EV) infrastructure to accelerate the adoption of EVs as competition in the EV market has intensified during the past five years ($7.5 billion); and delivering thousands of electric school buses nationwide ($2.5 billion).
The fact that the Senate reached a bipartisan deal could lead to a more ambitious $3.5 trillion bill to fund universal pre-K education, child tax credits, an expansion of Medicare, child care, and free community college. “At its core, it is about restoring the middle-class in the 21st century and giving more Americans the opportunity to get there,” Senate Majority Leader, Chuck Schumer, told colleagues on August 10. However, the legislation still needs to be passed by the House of Representatives before it becomes law.