Senate infrastructure bill could take years to transform U.S.

WASHINGTON - It has taken years for Congress to finally get behind its long-imagined goal of legislation to upgrade the nation’s ailing infrastructure. And even if signed into law this fall, it could take many more still for Americans to feel its full impact.

While President Joe Biden’s stimulus plan delivered tangible economic benefits to most of the country within weeks, key parts of the infrastructure plan the Senate passed on Tuesday morning may take the better part of a decade to come to fruition. The proposal must still clear the House of Representatives.

Substantial pots of funding are likely to be quickly disbursed, particularly for updating existing projects, such as repaving the nation’s roads. But major public works projects often have to go through a lengthy process - from federal agency to locality to private builder - and may not result in new usable infrastructure for years.

The long-term nature of the benefits may push completion of many of its projects into the next administration, which could complicate who receives its political benefits. The White House maintains the package will create both short-term and lasting economic benefits for the nation, and pointed to polls showing it is widely popular among voters of both parties.

Through a separate process known as reconciliation, the administration is also moving toward delivering a major expansion of immediate economic benefits ahead of the 2022 midterm election, including continuing a new child benefit for 90% of American parents that was launched in the stimulus and new Medicare benefits for tens of millions of American seniors. The reconciliation package could pass this fall with a slew of additional federal benefits, such as tuition-free community college and universal prekindergarten.

Of the infrastructure legislation’s $566 billion in new spending, only about $20 billion will be spent by the end of fiscal year 2022, according to estimates based on Congressional Budget Office reports by Marc Goldwein, senior vice president of the Committee for a Responsible Federal Budget, a nonpartisan think tank, and Donald Schneider, who served as an economist for Republicans on the House Ways and Means Committee. The fiscal year 2022 ends right before the 2022 midterm elections.

Roughly $125 billion, or about a quarter of the funding, will go out by September 2024 - right ahead of the 2024 presidential elections, Goldwein and Schneider have found. Annual federal spending from the bill ramps up from there in fiscal years 2025, 2026 and 2027.

Those allocations represent only when the money is disbursed, but in some cases states will be able to start spending funding with the expectation they will later be reimbursed by the federal government. These numbers do not include an extension of highway and transit funding that was already expected to occur before the infrastructure bill, although its extension is included as part of the package.

“It’s going to be a real challenge to get political credit for projects that get finished three, four or five years from now, and that’s when the bulk of the projects will be completed,” said Mark Zandi, chief economist at Moody’s Analytics. “We’re talking about a lot of long-lived projects - broadband, power infrastructure, water systems, even public transit and rail - and that’s going to take awhile to go from start to end.”

The infrastructure bill devotes billions of dollars to pillars of the American economy that many experts believe are in dire need of repair - highways, roads, bridges, water systems, and commuter and passenger rail lines.

Jim Tymon, executive director of American Association of State Highway and Transportation Officials, said that if Congress passes the bill, money will start through existing federal channels to states and cities as soon as October.

“There’s enough out there that’s ready to go that the impact will be felt pretty quickly,” Tymon said. “They’re ready to . . . take those dollars and convert them into projects that are going to make a real difference in people’s quality of life.”

Even before the money goes out the door, it will set plans in motion that Biden officials can seize on as evidence that their investments are producing results. And there are important policy justifications for taking time to ensure the funding is spent appropriately, experts say.

Tymon said a second tranche will take more time, such as spurring the development of electric-vehicle charging stations. States also operate on multiyear plans for their more ambitious initiatives, he said.

“Having the predictability of 5 years of federal funding allows them to develop those plans” more strategically, Tymon said, “rather than having to react on a year-to-year basis” depending on the whims of Washington. Practically speaking, that could mean moving major projects up “to year 3 or 4, rather than 7 or 8,” of a long-term plan, he said.

Ray LaHood, President Barack Obama’s first transportation secretary, said there are vast and complex projects that will extend over years, such as a new train tunnel under the Hudson River connecting New Jersey and Penn Station in Manhattan, known as the Gateway Program, or major bridge replacements. But, LaHood added, there is also a pipeline of road, transit and other projects that states can jump on quickly, making a swift impact.

In many cases, the necessary environmental documents are already in hand, he said. When construction season begins in earnest next year in states with tough winter weather, and earlier in places like Arizona and Florida, “you’re going to see hundreds and hundreds of orange cones going up all over the country, where workers are going to be repaving roads and building bridges, and that process is a long-standing partnership with the governors.”

“Many of these states are just one big pothole,” LaHood said, and governors are primed to make repairs. Amtrak has projects ready to go now, as do transit systems, he said.

White House spokesman Andrew Bates said in a statement that the infrastructure agreement would fulfill the president’s campaign promise “by achieving progress in almost every major area it touches within a year,” including roads and bridges, transit, high-speed internet and clean energy.

“These investments will pay off for American families in the short, medium, and long run - even for decades to come and the next generation, just like the Transcontinental Railroad and the interstate highway system,” Bates said.

Still, prior efforts to revamp the nation’s infrastructure offer cautionary tales. In 2009, Obama approved infrastructure legislation that sent $3.5 billion to California for high-speed rail funding intended to transform how residents travel. About 12 years later, California travelers can point to little that has changed in their daily lives beyond intensified bickering among local officials over how to proceed.

The project has been bogged down by a lengthy construction process, in part due to U.S. inexperience constructing high-speed rail and because federal dollars forced the state to start construction before all the necessary land had been acquired. Forcing the rail line to go via a more populated but less direct north-south route appeared to appease political demands but delayed construction.

“We barely have 100 miles to show for it and even that’s not really to completion,” said Ethan Elkind, director of the climate program at the University of California, Berkeley School of Law Center for Law, Energy & the Environment.

The bipartisan infrastructure bill earmarks $66 billion for passenger and freight rail - funding for which high-speed rail projects are expected to be eligible to apply. Elkind said the new rail funding will take years to translate into tangible improvements, arguing the projects require excessive environmental site reviews.

“Planning alone often can take minimum a couple of years, but often longer than that, particularly if there’s litigation,” Elkind said. “These projects take way too long to build - sometimes decades - so that is a real problem, even if the investments are worthwhile.”

Some analysts also said the gradual spending path makes sense, given concerns that too much government spending is causing inflation in the current economy. Critics have already accused Democrats of pouring too much new federal funding into the economy through the $1.9 trillion stimulus plan.

Sen. Rob Portman, R-Ohio, one of the Republicans backing the legislation, recently defended the legislation from critics by pointing out “it’s not money that will be spent next year” and that projects may last 10 to 15 years before their completion.

Some experts contended Congress may be missing an opportunity to improve the process and speed for building infrastructure in the United States.

Compared with other rich European countries, the United States spends up to five times as much on similar infrastructure projects, according to a report by the Niskanen Center, a libertarian leaning think tank.

Rail transit costs about 50% more on a per-mile basis to build in the United States compared with global peers, while tunneled projects take nearly a year-and-a-half longer to build, the Eno Center for Transportation, a nonpartisan think tank, has found.

Some proposed changes, like improving state project selection decisions, were largely left out of the Senate’s agreement. It is unclear how or if the legislation will change when it reaches the House of Representatives.

“They negotiated over what to spend money on, but there has been virtually no attention paid to how the U.S. actually does infrastructure,” said Sam Hammond, a policy expert at the Niskanen Center. “They’re pouring money at particular projects, but aren’t taking this as an opportunity to do deeper structural reforms needed to ensure you get bang for your buck. As we know from Obama’s 2009 recovery act, you can come up with the money for a wish list of projects but that does not mean they come to fruition.”

Other experts contend the lack of funding - partially addressed by the bill - has proved the real obstacle to completing infrastructure projects. Lawmakers should also be wary about building too quickly without proper environmental review, an omission that could in particular harm poor and minority communities, said Kevin DeGood, an infrastructure expert at the Center for American Progress, a left-leaning think tank.

“These investments will work their way through our system over 5 to 10 years, and that won’t really be an arc of time that people will register,” DeGood said. “But the overarching stumbling block to project completion is money. On the public infrastructure side, the handicap has been lack of funding.”

Either way, the backlog of new funding could take time to clear. For instance, $15 billion in new federal funding to replace the nation’s lead service water pipelines will be allocated to the states’ drinking water revolving funds. If a state already has replacement projects underway that are pending - such as Illinois - the money can be disbursed relatively quickly. But about 40 states have not conducted a formal survey to estimate how many lead service lines they have in operation, a step that would help expedite their access to funding for replacements.

“In 40 states, they do not have a good handle on how many lead service lines they have and so the money won’t go out the door quickly,” said Erik Olson, a water infrastructure expert at the Natural Resources Defense Council. “It will take some time, though we don’t know how long.”

John Porcari, a former deputy U.S. transportation secretary who was interim executive director of the Gateway project, said projects like repaving roads or working on storm drains will have immediate positive impacts on communities and employment.

“But no one would argue those are transformative projects,” said Porcari, who led Maryland’s transportation department and is now managing partner of infrastructure consulting firm 3P Enterprises.

For those bigger efforts, “philosophically, everybody needs to understand that you break ground on projects other people finish, and you cut ribbons on projects other people have started for you,” Porcari said. “We’re living off assets our great grandparents bought and paid for. It’s time for us to pay it forward. Who gets the credit should be a secondary concern.”