Written by Erman Eruz
Overview
On March 31, President Biden introduced his administration’s long-awaited infrastructure plan, titled the American Jobs Plan. Totaling $2.25 trillion over eight years, the Plan calls for investments in roads, bridges, water systems, broadband, the electric grid, economic development of power communities, housing, schools and community colleges, R&D in clean energy technologies, manufacturing, and more. The Plan aims to be a “once-in-a-generation investment” that will help fulfill the President’s earlier commitments to put “the United States on an irreversible path to a net-zero economy by 2050.” Plan expenditures will constitute an annual approximately 1% of the GDP over the eight-year period.
The Plan is the first part of a two-part recovery effort. The second part is set to focus on childcare, healthcare, and education, and the president will announce its details later in April.
Is $2 Trillion Enough?
The American Society of Civil Engineers’ 2021 Failure to Act: Economic Impacts of Status Quo Investments Across Infrastructure Systems outlines projected infrastructure investment gaps between 2020-2029 across a variety of infrastructure types. The amounts allocated for these infrastructure types in the American Jobs Plan would cover a significant portion of these gaps, but would not address them in their entirety. It also provides funding for capital priorities not included in ASCE’s report.
| Infrastructure Systems | Funding Gap (2020-29), $B) |
American Jobs Plan (2021-28, $B) |
Difference, $B / % of Gap Remaining |
|---|---|---|---|
| Surface Transportation | $1,205 | $579 | ($626) / 52% |
| Water/Wastewater Infrastructure | $1,089 | $111 | ($978) / 90% |
| Electricity | $197 | $100 | ($97) / 49% |
| Airports | $111 | $25 | ($89) / 77% |
| Inland Waterways & Marine Ports | $25 | $17 | ($8) / 32% |
| Totals | $2,456 | $832 | ($1,795) / 68% |
Source: American Society of Civil Engineers & EBP, The White House
How Will Cities and States Benefit?
Over the next few months, there will be debates over the Plan’s size, contents, and funding. Transportation Secretary Pete Buttigieg said that the President is hoping for “major progress from Congress before Memorial Day,” while Speaker Nancy Pelosi is hoping to get the Plan through the House by the Fourth of July. The details on how funds will flow to state and city governments will be clarified during the legislative process.
Generally, funds may be allocated through some combination of:
Click below to jump to the investment categories most important to you:
The Affordable Housing Proposal
The Plan proposes to spend $213 billion to produce, preserve, and retrofit more than 2 million affordable and sustainable units by:
Back to list
The Broadband Proposal
The Plan proposes to spend $100 billion for broadband infrastructure and closing the digital divide. The broadband portion of the Plan is based on the Accessible, Affordable Internet for All (AAIA) Act, reintroduced in March in the Congress by House Majority Whip Clyburn (D-SC) and Senator Klobuchar (D-MN) (see here for summary). The priorities are well-aligned with the primary issues highlighted in the Broadband Equity Partnership’s nationwide survey of state and local broadband leaders on local priorities for a national broadband stimulus; namely, large-scale funding for fiber deployment, digital equity and adoption; changes in the federal funding distribution that enables local governments to have greater control on how that funding is used; and policy changes that eliminate prohibitions on local governments, utility companies and cooperatives from delivering broadband service. The AAIA proposes:
Back to list
The Proposal to Transition to Clean Energy
The current version of the Plan includes $100 billion for power infrastructure and economic development investments in distressed and disadvantaged coal, oil & gas and power plant communities. The Plan proposes the first batch of funding to advance the goals announced in the President’s January 27th Executive Order on Tackling the Climate Crisis at Home and Abroad, including commitments on a just transition to a clean energy economy, environmental justice, and federal procurement, including:
Back to list
The Innovation Proposal
The Plan includes $480 billion to spur innovation through investment in R&D, a more equitable innovation economy, and domestic manufacturing, including:
Back to list
The Resilience Proposal
The Plan proposes $161 billion to create more resilient communities and rebuild water infrastructure, including through:
Back to list
The Talent Development Proposal
The Plan contains $237 billion for talent development. This includes:
Back to list
The Transportation Proposal
The Plan includes $571 billion for transportation infrastructure, to repair roads, bridges, rail, and transit systems in poor condition. This includes:
* * *
HR&A will continue to track the progress of the American Jobs Plan and other federal funding for a just and resilient recovery. To learn more about our efforts, drop us a line at stimulus@hraadvisors.com.
