Infrastructure may be 'the best way' for President Biden to bring unity to Congress

Infrastructure Week could finally happen in the Biden era.

President Biden’s ambitious Build Back Better Recovery Plan “will make historic investments in infrastructure and manufacturing, innovation, research and development, and clean energy.” And newly confirmed Secretary of Transportation Pete Buttigieg said during his confirmation hearing that he sees “a generational opportunity” to transform infrastructure.

“If [Biden] is truly serious about wanting to be bipartisan, infrastructure’s the best way to do that,” Michele Nellenbach, vice president of strategic initiatives at the Bipartisan Policy Center, told Yahoo Finance. “Plus, we know that infrastructure grows the economy. It puts people back to work. If you were looking at a post-COVID economy, infrastructure is really one of the best ways to help us get moving and growing again. I’m hoping that they can all come together and live up to that expectation and actually get it done.”

‘A pothole doesn’t care if you’re a Democrat or Republican’

Biden’s plan calls for $2 trillion — which would need approval of both Democrats and Republicans in Congress — to "create an equitable clean energy future" through modern and sustainable infrastructure.

Sen. Joe Manchin (D-WV), a key swing vote in the new Senate, recently called for as much as $4 trillion to be spent on infrastructure, and he doesn’t see it as a partisan issue.

“A pothole doesn’t care if you’re a Democrat or Republican, it’ll still pop your tire,” Manchin told Yahoo Finance in a statement. “Congress must work together to create an infrastructure package that, if done correctly, will be an economic investment putting hard-working Americans back to work with ripple effects throughout our entire economy. Whether it’s fixing our crumbling roads and bridges or deploying broadband to our rural communities, making sure every American is connected to our modern way of life is an investment in every American community and should be a priority for Congress and the Biden administration.”

A recent Goldman Sachs note stated that Congress is “likely to spend whatever tax revenue it raises on infrastructure and social benefit spending,” adding that although infrastructure does appear to be a top priority, it’s unclear whether some aspects could pass the reconciliation process.

“To be honest, I think the question is more like what can be paid for,” Nellenbach said. “The needs are such that you could spend a couple of trillion and probably still not get us to where we should be as a leading economy in the world. It’s just a matter of how you’re going to pay for that.”

“For instance,” she continued, “you have the highway trust fund, the gas tax hasn’t been updated since 1993, and with the advent of more fuel efficient vehicles and electric vehicles coming online, it’s not going to be able to meet the needs for the foreseeable future. What do you do about that? If you’re looking at drinking water and wastewater, they don’t have a trust fund. It’s all appropriated dollars. How do you significantly increase that unless you want to deficit spend? We just don’t know where members are going to come down on debt and deficit in fiscal austerity at this time.”

The main priority should be having a “clear national vision,” according to Joe Kane, an associate fellow for the Brookings Institution, because the lack of one is why previous plans have never come to fruition. “It’s not just simply throwing money into the same system as before, but actually better targeting our investments, having improved measures, and so on.”

‘It’s like buying a new car’

The state of the U.S. infrastructure has largely declined over the years.

In 2017, the American Society of Civil Engineers gave the U.S. infrastructure a D+ grade and predicted that it would cost approximately $4.6 trillion over the next decade to improve roads, bridges, schools, and ports across the country. It called for infrastructure investment to increase to 3.5% of U.S. GDP by 2025 (the current level is roughly 2.5%).

Nearly one in four bridges are deficient, according to the Government Accountability Office (GAO), which also found that 10% are “structurally deficient” and 14% are “functionally obsolete.”

Broadband, another area under focus in the infrastructure conversation, is unreliable in rural and low-income communities. Approximately 18 million Americans lack access to any broadband network.

“One of the big problems we have is deferred maintenance,” Rick Geddes, a professor of policy analysis and management at Cornell University, told Yahoo Finance. “I’ve learned it’s like buying a new car. When you buy a new car, there’s an owner’s manual and it tells you how often you’re supposed to change the oil. It’s the same thing for a road, a bridge, a tunnel, that the engineers who built it tell the owner — who’s almost invariably a public entity like a state, city, or county — how they’re supposed to be taking care of it, and that it could be resurfacing.”

Geddes added that “regular maintenance that you need to do to keep it in a state of repair has been slowly deferred over time. Politically, it’s not an appealing way to spend money … We’re good at building and designing new things, but in terms of taking care of what we have, we’re not that great.”

The key is for the federal government to provide the money to the states. According to the Center on Budget and Policy Priorities (CBPP), federally-funded infrastructure projects are “particularly effective” at boosting employment and earnings. But if the state funds the project through tax hikes or spending cuts in other areas, “the impact on a state’s employment would be smaller” (but likely still positive).

Though the definition of infrastructure can be broad, Geddes, Kane, and Nellenbach all agreed that it’s an issue that affects every American.

Infrastructure “affects all places and all people whether you’re in an urban community, a rural community, or a suburban area,” Kane said. “We all depend on having safe, reliable, efficient transportation, water. It's really essential for everyday life. We also know it’s essential for our environment, which of course has support among many progressives.”

He also described it as the “foundation” for economic growth and productivity.

“When we think of our freight movement, our logistics movements, our ports, that’s hugely important for our shippers, our manufacturers, our farmers who have to get their products to market,” Kane said. “The impacts are so wide.”

And because of how broad infrastructure is, it affects other various aspects of life, like health (clean water), jobs (creating the infrastructure), and even environmental health (sustainable innovation).

“It’s something that we all depend on and if we didn’t, if we don’t have that reliability, then the economy simply can’t grow, and we also can’t go about our jobs,” Kane said. “We can’t go about our daily lives. While our infrastructure for the most part is hanging in there, we put the duct tape and the chewing gum to hold it together. The time for repair or outright replacement is here.”

‘It’s not just simply throwing money into the same system’

Biden’s plan focuses on nine key areas of investment: infrastructure, auto industry, transit, the power sector, buildings, housing, innovation, agriculture and conservation, and environmental justice.

In the transit sector, Transportation Secretary Pete Buttigieg noted during his confirmation hearing that when transportation policies are at their worst, it “can reinforce racial and economic inequality.”

In the power sector, Biden is aiming to create millions of jobs while generating clean electricity. For housing, his goal is to construct 1.5 million sustainable homes and housing units.

By upgrading 4 million buildings and weatherizing 2 million homes, Biden said, the plan would create at least 1 million jobs while lowering residential energy bills. Additionally, his infrastructure bill would “drive dramatic cost reductions in critical clean energy technologies, including battery storage, negative emissions technologies, the next generation of building materials, renewable hydrogen, and advanced nuclear.”

Nellenbach noted that the previous two administrations talked about infrastructure but “then the politics of other issues got in the way,” so actually making Infrastructure Week a reality would be true bipartisan feat.

“Every member of Congress wants to be able to go home and say to their constituents and their owns ‘I got some money to go towards this road’ or ‘we’re going to help you address those stormwater questions,’” Nellenbach said. “The question is how they go about it.”

Adriana Belmonte is a reporter and editor covering politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells.

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