Biden Administrations Plans for National Infrastructure Package
Published: February 17, 2021
As the Biden Administration continues to focus on a Covid-19 relief package, we take a look ahead at President Biden’s plan for the highly anticipated national infrastructure package to repair roads and bridges, create new jobs, and combat the effect of climate change.
During the 2020 Presidential campaign, newly elected President Joe Biden laid out a new $1.3 trillion infrastructure spending plan to update and invest in our national infrastructure over a period of 10 years. While the total price tag was an early figure and is likely to change during actual drafting of the plan, President Biden’s plan is calling for the investment in order “to equip the American middle class to compete and win in the global economy, to move the U.S. to net-zero greenhouse gas emissions, and to ensure that cities, towns, and rural areas all across our country share in that growth.”
This isn’t the first time President Biden has overseen a massive national recovery plan. In the midst of the Great Recession in February 2009, Congress passed the national economic rescue package known as the American Recovery and Reinvestment Act. It included tax cuts, expanded unemployment support, infrastructure projects and money for a range of Democratic domestic priorities, such as green jobs and high-speed rail, adding up to a total of approximately $800 billion in relief money. The person put in charge of overseeing how all that money was spent was the country's new vice president, Joe Biden. After President Obama signed the bill, he shifted his attention to health care and gave Biden the reins for the program supervision. The former vice president was said to prioritize accountability and efficiency during the financial crisis. While his role was somewhat undefined to those outside of the White House, Biden was focused on the “implementation” of the package and sought to ensure tax dollars were spent wisely and effectively.
According to the U.S. Census Bureau’s December 2020 Construction Spending report, the value of public construction in 2020 was $350.5 billion, 4.8 percent (±1.6 percent) above the $334.4 billion spent in 2019. Highway construction came out to $98.8 billion, just above the $97.1 billion figure in 2019. The American Society of Civil Engineers (ASCE) also released a status report in June 2020 which explores COVID-19’s Impacts on America’s Infrastructure and the further impact to outdated infrastructure nationwide. Estimates show:
- 46,100 structurally deficient bridges across the country
- One out of every five miles of highway pavement is in poor condition
- Aging terminals, old technology, and chokepoints at hub airports negatively impact the aviation system
Funding has been an area of need and future concern for our infrastructure system. One major issue is the stagnant federal gas tax, which has not kept up been raised since 1993. The tax’s purchasing power had already declined before the reduced driving habits and consumption that came as a side effect of the COVID-19 pandemic and subsequent lockdowns. ASCE recommends that now is the time to renew, modernize, and invest in national infrastructure to maintain international competitiveness.
Looking at President Biden’s infrastructure plan, titled the “Biden Plan to Invest in Middle Class Competitiveness,” there are three main pillars of focus.
- Create good, union jobs that expand the middle class.
- Build resilient infrastructure and reduce greenhouse gas emissions.
- Revitalize communities in every corner of the country so that no one is left behind.
The infrastructure plan looks to immediately spend $50 billion over the first year of the administration to kick start the process of repairing the nation’s existing roads, highways, and bridges. Biden is also looking to send a portion of the relief directly to cities and towns which oversee most roads, as well as expediting the permitting process so that projects can break ground quicker. Part of this action includes a focus on safety, with Biden looking for the U.S. Department of Transportation, under new Secretary of Transportation Pete Buttigieg, will work with cities around the country to build “complete streets,” designed to help drivers, pedestrians, cyclists, and others safely share the road. As part of this renewal process, Biden is also expecting to try and stabilize the Highway Trust Fund. The already underfunded program posted a 49% decline of receipts in May 2020 when compared to May 2019 as the pandemic continued to curb travel and spending.
President Biden is also looking to future needs and requirements, calling for the nation to speed the transition to low- and no-carbon vehicles. Biden called for restoring the full electric-vehicle tax credit, to encourage American families to buy electric cars for their personal use – and to incentivize American businesses to build or shift their existing fleets to electric vehicles. In addition, the plan aims to bring together all involved parties to build a national electric charging system of 500,000 public charging outlets by 2030 in order to allow Americans to be able to drive anywhere in the United States in an electric car. The push for new technology and innovation is not limited to electric vehicles, but also delves into smart cities, new water technology, and modern infrastructure planning. These goals also tie in to Biden’s promise to attack climate change, as Biden’s plan calls for items including climate resiliency construction, to reinstate the solar Investment Tax Credit (ITC) slated to expire in two years; and constructing net-zero-carbon federal buildings.
A large focus of this plan is the dedication ensure growth is shared by communities across the country and not leave any areas behind. Biden plans to expand the New Markets Tax Credit, which has helped draw tens of billions of dollars in new capital to low-income communities by providing tax credits to investors in community development organizations that support everything from supermarkets to real estate projects to manufacturing plants. Administratively, the plan also includes doubling the funding for the Economic Development Administration to help underserved communities tap existing federal resources. Biden also hopes to fund anchor institutions in distressed areas to continue to support local economies. These larger locations can help to provide a reliable source of income and good-paying jobs for communities and include examples such as hospitals, colleges and universities, and government administrative offices. A further area of focus will also be water infrastructure, which was brought to national attention with the public water issues arising in Flint, Michigan. The infrastructure plan includes doubling federal investments in clean drinking water and water infrastructure in order to protect citizens and the public health.
The administration has thus far been focused on a pandemic relief package, but has already begun looking ahead to this infrastructure package that was a core aspect of Biden’s presidential campaign, saying at the time that it would be the "largest mobilization of public investment since World War II." This ambitious package could test the desire for bipartisanship from the White House as President Biden is looking at strong moves to shore up an economy fresh from dealing with a year-long pandemic, but new details and discussions should come within the next few months to present a clearer view of what will ultimately be included in the final plan.