The Infrastructure Bill: What It Means for Business

Updated on April 8, 2021

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The Infrastructure Bill: What It Means for Business

In recent years American infrastructure has deteriorated rapidly.

Historical US Infrastructure Rank

2008 72009 82010 152011 162012 142013 152014 122015 11

The ASCE's report card is bleak.

A = ExceptionalB = GoodC = MediocreD = PoorF = Failing

Energy D+Parks and Rec C-Roads DPorts CBridges C+Wastewater DLevees D-Drinking Water DSchools DTransit DRail C+Inland Waterways D-Aviation DSolid Waste B-Hazardous Waste DDams DCumulative GPA D+

Largely a measure of no long term reauthorizations of transportation spending.

Why?

The Highway Trust Fund Deficit

1957-2007 $02008 $8.8B2009 $7.1B2010 $9.7B2015 $15B

December 2015: Congress passes a $305 billion bill to fund roads, bridges, and rail lines.(Senate Vote: 83-16)$61 billion a year for the next five years.

While it's the longest reauthorization of transportation spending in a decade, is it enough?

In 2014 the Economic Policy Institute issued a report outlining the effects of three tiers of transportation bills.

Largely affecting our future, including:

overall economic activityproductivitynumber and types of jobssustainability

Scenarios range from $18-$250 billion annually.

Scenario 1:$30 billion annually over the next ten yearsCancellation of automatic across-the-board cuts from the sequesterTraditional infrastructure investments–Largest portions of funding:Construction (9 out of 18 billion)

Scenario 2:$92 billion annually over the next ten yearsCentered on energy efficiency in residential and commercial buildingsCreation of national "smart grid"–Largest portions of funding:Construction (52/92 billion)Smart Grid (40/92 billion)

Scenario 3:$250 billion annually until 2020Centered on traditional infrastructure (water treatment, distribution, and sewage systems)Would nearly close the US "infrastructure deficit"–Largest portions of fundingConstruction (83/250 billion)Water and sewage systems (50/250)Transit and ground passenger transport (35/250)

All Three Options Would Yield Immediate Economic Boosts

Option 1:cost: $18 billionYield: $29 billion increase in GDP and 216,000 new jobs by year oneOption 2:cost: $92 billionYield: $147 billion in GDP and 1.1 million new jobs by year oneOption 3:cost: $250 billionYield: $400 billion and 3 million net new jobs by year one

Employment:All three options create jobs that are disproportionately male, Latino, high-earning, and skewed away from young workers.

Male/FemaleOption 1: 77/23Option 2:80.4/19.6Option 3: 74.1/25.9Economy average: 50.2/49.8

Latino/non-LatinoOption 1: 15.4/84.6Option 2: 16.2/83.8Option 3: 14.3/85.7Economy average: 13.2/86.8

Under 25 Adults/OverOption 1: 9.3/80.7Option 2: 9.5/80.5Option 3: 7.8/82.2Economy average: 13.2/86.8

Jobs in bottom wage quintile/AboveOption 1: 9.5/90.5Option 2: 9.4/90.6Option 3: 11.2/88.8Economy average: 18.9/82.1

Economy:Option 3–the most aggressive policy–would increase productivity growth by .3% annuallyThat's equal to half of productivity acceleration in the US Economy between 199-2005One of the most prosperous periods in American history.

Focus on water/sewage and passenger transport sectors would help many of the largest offenders

Cost to economy per year from lagging infrastructure[type, cost]Roads: $130 billionTransit: $90 billionBridges: $76 billionRail: $24 billion

As well as help save American infrastructure, life blood of the American economy from WWII to the 1990's.

ROADS

World Rank: 16

32% Poor or Mediocre Condition [pie chart]

Per Year:Cost to Economy $130BNeeded Investment $179BActual Investment $91BShortfall $88B

Unfunded Gap2010 48%2048 54%

BRIDGES

Per Year:Cost to Economy $76BNeeded Investment $20.5BActual Investment $12.8BShortfall $7.7

25% of US bridges are structurally deficient or functionally obsolete.

TRANSIT

Per Year:Cost to Economy $90BNeeded Investment $62.5BActual Investment $37.5BShortfall $25B [same format]

Unfunded Gap2010 40%2040 55%$1 trillion economic cost by 2040.

Accessibility GapHouseholds With No Transit 45%Rural Households With No Transit 86%

RAIL

World Rank: 15

Freight (Private)Investment 1980-2015: $600B40 cents / $1 Revenue

Congestion Cost to Economy:2013 $200B2040 $288B

Passenger (Public)

Ridership2000 16 million2014 31 million50% up

Northeast Corridor Ridership2014 11.66 million2040 43.5 million75% up

Next 15 YearsNeeded Investment $15BActual Investment (+)$8BShortfall $7B

AIRPORT

World Rank: 5

Cost to Economy2007 $22B2012 $24B2020 $34B2040 $63B

Per Year:Needed Investment $7.85BActual Investment $3.35BShortfall $4.3B [same subtraction format]

Increased infrastructure spending is a key component to making America great again.

Infrastructure and Business

Citations