The Infrastructure Bill: Law And Beyond

On November 15, 2021, US President Joe Biden signed the Infrastructure Investment and Jobs Act (IIJA) into law. The bill, also known as the Bipartisan Infrastructure Law, was passed by the Senate on August 10, 2021, and by the House on November 5, 2021. The law provides $550 billion over fiscal years 2022 through 2026 in new federal investment in infrastructure, including roads, bridges, mass transit, water infrastructure, resilience, and broadband.

Roads, bridges and mass transit

Roads, bridges, and mass transit are a key focus of the Bipartisan Infrastructure Law, also known as the Infrastructure Investment and Jobs Act (IIJA). The law, which was signed by President Biden on November 15, 2021, provides $550 billion in new federal investment in infrastructure over fiscal years 2022 through 2026. This includes a significant portion dedicated to roads, bridges, and mass transit improvements.

The law includes $110 billion for repairing and rebuilding roads and bridges, with a focus on climate change mitigation, resilience, equity, and safety for all users. This is the single largest investment in repairing and reconstructing bridges in the US since the construction of the interstate highway system. It will rebuild economically significant bridges and thousands of smaller bridges across the country.

The legislation also includes the Safe Streets and Roads for All program, which aims to support projects to reduce traffic fatalities. This is an important initiative as over 20,000 lives were lost in traffic accidents during the first half of 2021.

In addition to road and bridge repairs, the IIJA also emphasizes the expansion and modernization of mass transit systems. It includes $39 billion in new investment to modernize transit, on top of continuing existing transit programs for five years. This brings the total guaranteed funding for public transit over the next five years to $89.9 billion, making it the largest federal investment in public transit in US history.

The funding will be used to expand public transit options across every state, replace thousands of deficient transit vehicles with clean, zero-emission vehicles, and improve accessibility for the elderly and people with disabilities. This will particularly benefit communities of color, who are twice as likely to rely on public transportation and often lack sufficient transit options.

Overall, the Bipartisan Infrastructure Law's investment in roads, bridges, and mass transit aims to improve safety, equity, and accessibility while also addressing the impacts of climate change and promoting the adoption of cleaner and more sustainable transportation options.

Water infrastructure

On November 15, 2021, US President Biden signed the Bipartisan Infrastructure Law, also known as the Infrastructure Investment and Jobs Act, into law. The law is a once-in-a-generation investment in the nation's infrastructure and competitiveness, including water infrastructure.

The Bipartisan Infrastructure Deal will invest $55 billion to expand access to clean drinking water for households, businesses, schools, and childcare centers across the country. It will also invest in water infrastructure and eliminate lead service pipes, including in Tribal Nations and disadvantaged communities.

The Drinking Water and Wastewater Infrastructure Act, which is part of the Bipartisan Infrastructure Law, provides $35 billion over five years in federal financing and funding to address the nation's water infrastructure needs. The Act reauthorizes and increases the Clean Water State Revolving Fund and the Drinking Water State Revolving Fund to $3.25 billion each annually over five years, for a reauthorization of $14.65 billion each.

The Act also reauthorizes the Water Infrastructure Finance and Innovation Act (WIFIA) at $50 million annually for five years and codifies an existing 10% state set aside from the Clean Water State Revolving Fund that provides additional assistance to disadvantaged communities. States are allowed to spend up to 30% of their total allocation on these communities.

The Bipartisan Infrastructure Law also includes funding for water infrastructure resilience and sustainability programs, with a focus on increasing the resilience of water systems to natural hazards, including extreme weather events due to climate change. This includes specific grants for small and disadvantaged communities, as well as medium and large systems for drinking water resilience.

Broadband

On November 15, 2021, President Biden signed the Bipartisan Infrastructure Law, also known as the Infrastructure Investment and Jobs Act (IIJA), into law. The law includes a \$65 billion investment in broadband infrastructure deployment to ensure that every American has access to reliable high-speed internet. This investment is particularly aimed at rural communities, where more than 30 million Americans lack access to broadband infrastructure with minimally acceptable speeds.

The National Telecommunications and Information Administration (NTIA) is responsible for overseeing the broadband programs funded by the Bipartisan Infrastructure Law. These programs include:

• $42.45 billion in grants to states, the District of Columbia, and territories to fund high-speed broadband deployment to households and businesses that currently lack access. Each state will receive a minimum of $100 million, and each territory will receive a minimum of $20 million, with the remaining money allocated based on need.
• $2 billion for Tribal broadband grants, which is more than double the funding for NTIA's existing Tribal Broadband Connectivity Program. This funding gives tribal governments the opportunity to determine how best to meet the broadband needs of their communities.
• $2.75 billion to fund Digital Equity, including digital literacy training, workforce development, and device access programs.
• $1 billion for middle-mile connections to build a high-speed backbone for communities, businesses, and anchor institutions.

The Bipartisan Infrastructure Law's investment in broadband infrastructure is expected to connect 25 million Americans who currently lack high-speed internet access.

Environmental impact

The Bipartisan Infrastructure Law, also known as the Infrastructure Investment and Jobs Act, was passed on November 15, 2023, marking a significant step towards rebuilding America's infrastructure. The law has a dedicated focus on addressing the environmental challenges faced by the nation. Here are some key ways in which the Bipartisan Infrastructure Law impacts the environment:

Clean Drinking Water

The Bipartisan Infrastructure Law addresses the issue of millions of American households lacking access to safe drinking water. It invests $55 billion to expand access to clean drinking water for households, businesses, schools, and childcare centers across the country. This includes replacing lead service pipes in Tribal Nations and disadvantaged communities.

Electric Vehicle Infrastructure

The law supports the adoption of electric vehicles (EVs) by investing $7.5 billion in building a national network of EV chargers. This includes funding for chargers along highway corridors and within communities, with a focus on rural, disadvantaged, and hard-to-reach areas. This initiative will not only reduce emissions but also improve air quality and create manufacturing jobs.

Clean School Buses

The law provides funding for thousands of electric and low-emission school buses, particularly in rural communities. This initiative will help improve air quality, reduce children's exposure to diesel pollution, and support the demand for American-made batteries and vehicles.

Modern and Clean Infrastructure

The law invests $17 billion in port infrastructure and $25 billion in airports to address repair backlogs, reduce congestion, and drive electrification and low-carbon technologies. This will not only improve efficiency and competitiveness but also significantly reduce emissions and environmental impacts on neighboring communities.

Resilience to Climate Change

The Bipartisan Infrastructure Law is the largest investment in the resilience of physical and natural infrastructure in American history. It allocates over $50 billion to protect against the impacts of climate change, including droughts, heatwaves, wildfires, and floods. This includes a major initiative to weatherize American homes, making them more resilient to extreme weather events.

Legacy Pollution Remediation

The law delivers the largest investment in addressing legacy pollution by allocating $21 billion to clean up Superfund and brownfield sites, reclaim abandoned mines, and cap orphaned oil and gas wells. This will help remediate environmental harms, improve public health, and advance environmental justice, especially in communities of color and disadvantaged areas.

Transit and Rail

The law provides $91.2 billion in mandatory transit funding over five years, including investments in low or no-emission vehicles. It also authorizes $66 billion in passenger and freight rail, the largest investment since the creation of Amtrak. These improvements will provide more energy-efficient and climate-friendly transportation options.

Active Transportation

The Bipartisan Infrastructure Law supports active transportation options by providing $1.4 billion for the Transportation Alternatives Program, which includes funding for pedestrian and bike infrastructure. It also includes $1 billion for the Safe Streets and Roads for All program, making streets safer for those walking, biking, or using other non-motorized transportation.

Ports and Airports

The law directs $80 million towards reducing emissions from idling trucks at port facilities, improving air quality. Additionally, it provides $450 million for the Port Infrastructure Development Program, which grants funds for projects that reduce toxic air pollutants and greenhouse gas emissions. The law also supports climate-friendly projects at airports, investing $1 billion in a new Airport Terminal Program for energy efficiency upgrades.

Congestion and Air Quality

The law includes over $1.2 billion for a Carbon Reduction Program to reduce transportation-related emissions, and $50 million for a Congestion Relief Program to relieve traffic congestion in large cities through innovative multimodal solutions.

These environmental initiatives within the Bipartisan Infrastructure Law demonstrate a strong commitment to addressing climate change, reducing emissions, improving air and water quality, and creating a more sustainable future for all Americans.

Economic impact

On November 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act (IIJA) into law. The Bipartisan Infrastructure Law is the largest long-term investment in US infrastructure and the economy in the country's history. It provides $550 billion over fiscal years 2022 through 2026 in new federal investment in infrastructure, including roads, bridges, mass transit, water infrastructure, resilience, and broadband.

The economic impact of the infrastructure bill is likely to be spread out over time. The bill includes $550 billion in "new" spending above baseline amounts that were expected under current budgets. Of that, more than half is targeted at transportation projects, including $110 billion for major road and bridge work, $66 billion for passenger and freight rail, and $39 billion to improve public transit. The rest is spread among other areas such as airports, ports and waterways, electric vehicle infrastructure, and electric buses.

Another $264 billion is directed toward other types of infrastructure work, including power infrastructure (such as improving the electrical grid), broadband expansion, water projects, and environmental remediation.

The bill will also have an impact on the construction and utilities sectors, with an increased demand for skilled labour. However, with inflation and interest rates high, infrastructure builders need to be careful to prioritise projects that can deliver the most value in the long run.

The bill is not expected to have a dramatic impact on the markets, as the spending is spread over a five-year period and the package is scaled back compared to original proposals. However, it is still a significant investment, particularly when combined with baseline infrastructure spending.

The bill's impact on GDP growth is likely to be minimal, as higher government debt will crowd out private capital and erode productivity, leaving GDP unchanged. According to the Penn Wharton Budget Model, the bill will be funded by $132 billion in new tax provisions and $351 billion in new deficits, and government debt would grow by 1.3% by 2031 and 0.6% by 2050.

Despite this, economists generally agree that federal infrastructure investment can have significant positive impacts on the economy. According to Mark Zandi, Chief Economist at Moody's Analytics, "Increasing infrastructure investment has significant macroeconomic benefits...Long term, economic research is in strong agreement that public infrastructure provides a significantly positive contribution to GDP and employment."

The Brookings Institution notes that infrastructure investment can have extremely broad economic benefits that might not show up in some narrow cost-benefit analyses, such as health benefits that may improve test scores and lower crime. The Economic Policy Institute suggests that the rate of return on public investment in infrastructure is quite high, with each $100 spent boosting private-sector output by $13 (median) and $17 (average) in the long run.

However, it is important to note that the economic returns from infrastructure spending depend on various factors, including how quickly funding leads to outlays, how outlays increase productivity, and how outlays are financed. Deficit financing of infrastructure investment can have a mitigating impact on the economic returns, as it reduces the amount of money available for private investment and increases federal spending.

Frequently asked questions