Biden’s Urgency Belies Infrastructure Rollout Running Into 2030s
(Bloomberg) -- President Joe Biden's multi-state tour to tout a $1.2 trillion infrastructure plan is designed to boost Democrats in the midterm elections, but the slow-moving wheels of government won't allow him to show off many new roads or bridges next year -- or even in time for the 2024 presidential election.
Unlike the pandemic relief bills passed since last year, the infrastructure package is a five-year authorization bill with money spread through 2027. Not all of the money is mandatory, either -- some discretionary programs will need Congress to continue to fund them year after year.
“This funding isn't going to show up tomorrow. It will take a little time to stand these programs up, but we're ecstatic and ready for it,” said Jimmy Wriston, secretary of the West Virginia Department of Transportation.
Some provisions of the bill will take even longer than five years. A $1.2 billion upgrade of the Washington subway system won't be fully paid until 2030. A drawdown of the strategic petroleum reserve could take until 2031. And some port infrastructure funds don't have to be spent until 2036.
That timeline could blunt the law's effectiveness as a campaign issue as Democrats struggle to keep control of Congress next year, and it won't be an immediate panacea for the inflation and supply-chain problems that have dogged Biden's poll numbers. He plans to visit Kansas City on Wednesday, his first trip to promote the public-works bill in a state that voted for former President Donald Trump.
Biden was pitching the new law to voters last week in one of five districts in the U.S. that voted for Barack Obama in 2012, Trump in 2016 and Biden in 2020.
“We know about our infrastructure problems -- we've known for a long time. Now we're finally doing something about it. No more talking. Time for action,” Biden said in Dakota County, Minnesota.
At last month's signing ceremony for the bill, Biden said that it would be a solution to short-term constraints, saying it would “reduce supply chain bottlenecks, as we're experiencing now.”
White House Press Secretary Jen Psaki tried to set more nuanced expectations.
“There are some components that we are going to see rather quickly and some that will take a little bit more time,” she said at Nov. 15 White House press briefing. “What the president feels this bill is going to help do is have an impact over the short, medium, and long term by putting more people back to work.”
The law is vast not just in size but in scope. It's actually 15 different bills rolled into one -- including the “Cyber Response and Recovery Act,” the “Repairing Existing Public Land by Adding Necessary Trees Act” and the “Wildland Fire Mitigation and Management Commission Act of 2021.”
The conventional surface transportation bill takes up about half of the final measure, but the rest of it will be administered by dozens of federal agencies, including the Energy Department, the Environmental Protection Agency and even the intelligence community.
One of the most visible infrastructure projects in the nation could take seven years to complete. The last three presidents have all used the 58-year-old Brent Spence Bridge, which links Ohio and Kentucky along the Interstate 75 Highway, as an emblem of the nation's outdated infrastructure.
A local television reporter in Cincinnati asked Biden last month if he could guarantee that the infrastructure bill would fund a new bridge to ease congestion.
“The answer is yes,” Biden said.
But Kentucky Governor Andy Beshear said construction of the additional bridge over the Ohio River will depend on how much money the state can get from a federal grant application, which could eliminate the need for tolls. Plans for the bridge are now seven years old and would likely need to be updated. Construction would begin in 2023 at the earliest and take five years to complete.
Transportation officials say much of the money will be allocated by formula grants to states, who could apply some of it to pre-approved projects. Other programs -- like installing electric vehicle charging stations or investing in smart cars that can prevent drunken driving -- could take years to get started.
“Over the next 12 months you'll begin to see some exciting news about how we're bringing the plan to life,” said Deputy U.S. Transportation Secretary Polly Trottenberg.
“The good news is we know local transportation agencies have a lot of projects and are ready to start investing the money right away,” she said. “But I also want to be careful in setting expectations. This is a five year bill. Some of the projects are going to take some time.”
DOT will need to hire in order to administer all that money, as its annual budget swells from $90 billion to $140 billion.
“So obviously we are an agency that is going to grow,” Trottenberg said.
West Virginia is among large beneficiaries of the law, with $4.4 billion in expected federal spending. Its share of federal highway and bridge spending ranks seventh in the nation, even before including an allotment through the Appalachian Regional Commission.
The state's Democratic Senator Joe Manchin wields a crucial vote for Biden's legislative agenda, since the Senate is deadlocked at 50-50.
Each state has a four-year transportation plan, but they're frequently amended and will likely need to be revised again to take into account the specific provisions of the infrastructure law.
“It didn't come off of Mount Sinai with Moses. It's a dynamic document,” Wriston said.
©2021 Bloomberg L.P.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
-
Joining The Dots | Dark Skies, Steady Diya: Why Hope Holds This Diwali
With war, a weak rupee and foreign outflows weighing on sentiment, policymakers at the NDTV World Summit and market veterans at NDTV Profit Ignite: Diwali Edition offered the same advice: stay invested and filter out the noise.
-
The Curious Case of Equitas Small Finance Bank And A CEO Who Quit For Stock
PN Vasudevan believes persistent investor concerns over a perceived conflict of interest had become a governance overhang on Equitas Small Finance Bank's stock, even as the lender improved profitability and asset quality.
-
Talking Points This Week: AI Cash Burn, A Tiger Comeback And An India That Still Finds Its Own Path
India is not immune to higher oil or tighter global liquidity, yet its earnings base is broader, its domestic policy levers are still available.
-
Foreign Investors Own Half Of HDFC Bank and ICICI Bank. An LTCG Cut Could Matter Most Here
Foreign portfolio investors have US$115 billion parked in HDFC Bank, ICICI Bank. If the government cuts long-term capital gains tax, Jefferies says returning foreign money could land here first.