Supporters of the $ 1 trillion infrastructure bill, which the Senate approved on Tuesday with bipartisan support, have repeatedly called it an investment of record size.
White House officials, Republican and Startocratic Lawmakers and social media users have all used the phrase “the greatest in history” to describe the infrastructure package, which includes $ 550 billion in new federal spending and an additional $ 450 billion for renewal. existing programs.
It’s wrong. The package is certainly important: an analysis by the Brookings Institution, a non-partisan think tank, concluded that the package would represent a “generational investment” and “easily the biggest infrastructure package in decades”. But it doesn’t quite match the size of several federal investment projects in the 20th century by just a few steps.
Adie Tomer, Brookings senior researcher in metropolitan policy and author of the report, told the New York Times that the package would take federal spending on infrastructure to about 1.25% of gross domestic product.
By comparison, New Deal infrastructure spending between 1933 and 1937 averaged 1.36% of GDP, according to Tomer’s analysis. Spending peaks in 1933 at 2.96 percent with the launch of the Public Works Administration, which funded and administered the construction of over 34,000 projects like the Lincoln Tunnel in New York City and the Hoover Dam.
Federal spending on infrastructure declined over the following decades before increasing again in the 1970s and 1980s to reach around 2% of GDP.
While the bipartisan package, which the House has yet to pass, doesn’t quite go beyond New Deal agendas or highways and water projects in the 1970s and 1980s, Mr Tomer said spending infrastructure would “surely exceed” New Deal investments if Democrats were also able to pass a separate $ 3.5 trillion economic package this year. This package is expected to include additional infrastructure spending, including upgrading veterans hospitals, creating additional affordable housing units, improving Native American facilities, and investing in energy efficient buildings and clean ports.
In a separate analysis, Jeff Davis, senior researcher at the Eno Center for Transportation and editor of Transportation Weekly, estimated the size of the infrastructure bill using estimates from the budget authority’s Congressional Budget Office – or the amount of money Congress authorizes agencies to spend – provided for in the bill. (Mr. Tomer focused on “spending” or actual and planned spending.) By budget authorization, infrastructure spending would total $ 840 billion from 2022 to 2026. This is about 3.45 of GDP in 2022 only, or 0.64% of GDP over five years, says Davis.
The Federal Aid Highway Act of 1956, which created the interstate highway system, authorized approximately $ 25 billion over 13 years. This was equivalent to about 6% of GDP in 1957, or about 0.32% over the entire period, according to Davis’ calculations.
Mr Davis also noted that there were no reliable estimates of major federal infrastructure spending in early parts of American history, such as government bonds and planned land grants under the Pacific. Railway Act of 1862 to build the first transcontinental railroad or even land deals like the Louisiana Purchase.