When it Comes to Infrastructure, the American Jobs Plan is Business as Usual
This article is the third in a five-part series that Strong Towns founder and president, Charles Marohn, has shared in response to the American Jobs Plan. Read part two here, or download the full series here as a booklet.
“The President’s American Jobs Plan is a historic public investment – consisting principally of one-time capital investments in our nation’s productivity and long-term growth.”
The unifying theme of the American Jobs Plan and the proponent’s rhetoric surrounding it is clear: Go Big! To make up for decades of disinvestment (the half-truth I discussed yesterday), we need to do something bold and historic. For people who reflexively believe in the redemptive power of infrastructure spending—a group I have dubbed the Infrastructure Cult—as well as those who simply applaud government action, this approach feels affirming.
Critics have focused on the size of the bill and the “go big” mentality as problematic. I largely tune this criticism out, not only because of its hypocrisy (deficits are okay for my priorities but for your priorities they will cause a financial catastrophe is not a serious position to hold) but because it presents no credible alternative.
The reality is that we have grown ourselves into a position where we must spend a lot more on infrastructure. A LOT MORE! So, the spending itself is not the problem, and I want to make that clear from the outset today because I am a critic of the American Jobs Plan, just not the kind of critic you are likely to hear from elsewhere.
My core argument is where I ended yesterday: The financial hole we have dug with our past infrastructure spending is so big we can’t fill it in. The American Jobs Plan pretends to try and fill it in. It’s big! It’s bold! It’s historic!
No, it’s more of the same, and it’s only going to make the hole bigger.
For example, the Plan says that:
One in five miles, or 173,000 total miles, of our highways and major roads are in poor condition, as well as 45,000 bridges.
Over the next decade, this bold and historic plan will “modernize” 20,000 miles of roads. It will repair 10,000 bridges. I read this and just shake my head. This is not a serious plan.
First off, 20,000 miles of repair is less than 12% of the roads currently in poor condition. What happens to the other 88%? This spending is going to occur over a decade, so what happens to the 153,000 miles of highways and major roads that are already in poor condition and will miss out on the spending? What will they look like a decade from now?
Image via Flickr.
Moreover, how many of the remaining four out of five miles of existing roads will deteriorate into the “poor” rating over the next decade? Since deterioration of a roadway is a rapid process once maintenance is shorted, it will certainly be more than 20,000 miles. So, despite this bold and historic amount of spending, we are certain to have more miles in poor condition a decade from now, not less.
These appropriations will run through the standard process we have in place for prioritizing spending, which now includes the return of earmarks by acclimation of both major political parties. I’ve worked with cities on the receiving end of this largess and what it means is that states and localities are typically offered money for projects they themselves don’t prioritize, but their congressional delegation does. To qualify for this money, there is a local match, which means diverting funds from maintenance and more urgent needs so as not to miss out on the once-in-a-lifetime opportunity for a major capital investment.
This is part of the crowding out that digs the hole deeper.
Now let’s focus on the word “modernize,” which, I am assuming based on past practice and the absence of meaningful reform in this plan, is the latest euphemism for expansion. We modernize highways and major roads by adding more lanes, widening shoulders, providing turn lanes, adding interchanges and overpasses, and maybe we’ll even throw in a bike lane so we can claim some credibility on climate change. Modernizing is simply business as usual (and if you doubt this, check out the reaction from PennDOT to the proposal).
The approach to bridges is even more incoherent. Here’s what the Plan says:
[The American Jobs Plan] will fix the ten most economically significant bridges in the country in need of reconstruction. It also will repair the worst 10,000 smaller bridges, providing critical linkages to communities.
It’s not clear where the numbers 10 and 10,000 come from—they have a pulled-out-of-a-hat kind of feel to them—but it seems more than strange. If we have economically significant bridges, investments that are so important we could put a toll on them and then retire the cost of the project in a reasonable amount of time, why not fix them all? Why stop at 10?
.jpg){kind=link}
Image via Flickr.
Even stranger is the notion that, with 45,000 bridges in poor condition, we should focus on 10,000 “smaller” bridges. I’ve worked on a number of small bridges, federally-funded spans that allowed wealthy lake property owners to reach their vacation homes. None of these should have received federal funding, but they did because there is a federal program for bridges in poor condition. Why is this a priority over the 35,000 larger bridges?
In 2015, I did an event with the then Iowa DOT chief Paul Trombino, who said that Iowa’s transportation system was going to shrink. It would start with small, remote bridges, some of which had already been closed. These are difficult yet prudent decisions being taken by responsible leaders across America; do we now give them matching dollars to backtrack from those hard choices? How does this not undermine their future decision making?
I’m all for taking incremental steps and recognizing the power of small projects, but small is not a virtue unto itself.
There is a lot of cheering for the Plan’s focus on public transit, but even there the plan falls far short of its ambition. The American Jobs Plan asserts that:
Our current transit infrastructure is inadequate – the Department of Transportation estimates a repair backlog of over $105 billion, representing more than 24,000 buses, 5,000 rail cars, 200 stations, and thousands of miles of track, signals, and power systems in need of replacement.
I think the $105 billion estimate is low but, much like highways and bridges, it doesn’t matter. We’re not going to tackle it. The American Jobs Plan spends just $85 billion over the next decade to “spend down the repair backlog,” although even that is a euphemism, since the repair backlog is going to continue to grow.
The Plan has an additional $80 billion to 1) address Amtrak’s repair backlog, 2) modernize the high-traffic Northeast Corridor, 3) improve existing corridors and connect new city pairs, and 4) enhance grant and loan programs that support passenger and freight rail safety, efficiency, and electrification. That’s a long list of objectives for a short stack of cash, especially when you recognize that the first item, Amtrack’s repair backlog, is already half of the proposed funding (and growing).
No matter. If the federal government is paying, Amtrak is ready to build. As I’ve written before, it’s appalling to me that the greatest wealth multiplier in our cities, public mass transit, is funded like a charity and forced to serve as a lesser appendage to our auto-based transportation model when it could be—should be—the heart of every local wealth-building strategy. The American Jobs Plan significantly increases transit funding while also keeping transit in its place as a servant to the auto-based development pattern.
The American Jobs Plan spends $25 billion on airports, which is comparable to the $25 billion in grants and $35 billion in subsidized loans that airlines received in the first round of bailouts in March of 2020. I realize these are two different expenditures made for very different purposes, but when there are reports of our nation’s newest major airport spending billions on expansion while falling far behind on maintenance, it fits a pattern we see everywhere that matching dollars for expansion and upgrades are deployed.
The American Jobs Plan also has “$56 billion in grants and low-cost flexible loans to states, Tribes, territories, and disadvantaged communities across the country” for upgrading and modernizing water and wastewater systems, drainage systems, clean water, and contaminant cleanup.
Again, this is work I used to do and I’ve written numerous times about how these projects “gift” disadvantaged communities more pipes and systems than they can maintain, let alone make productive use of, robbing them of future resources and capacity in the name of helping them out today. Even so, my home state of Minnesota’s share of this spending would be, if ratios hold, about $1 billion, which is slightly more than the current backlog of just the water projects on the state’s project priority list. Just another example of the problem being dwarfed by resources proposed to address it.
It feels like I’m starting to pile on here, but the point that the American Jobs Plan is business as usual is perhaps most represented in the section on broadband infrastructure. Here is how that issue is presented:
Generations ago, the federal government recognized that without affordable access to electricity, Americans couldn’t fully participate in modern society and the modern economy. With the 1936 Rural Electrification Act, the federal government made a historic investment in bringing electricity to nearly every home and farm in America, and millions of families and our economy reaped the benefits. Broadband internet is the new electricity.
This is certainly one way of interpreting history. It is the way I was taught the 1936 Rural Electrification Act, along with other New Deal programs, back in high school. Poor, rural people couldn’t afford to have access to electricity and so the federal government made an investment and brought power to every farm. Then we all benefitted. It’s very affirming of a certain worldview.
Another interpretation is that Americans were developing low-energy appliances as well as distributed energy production to fill demand for these new technologies from farmers and those living in rural areas. By stepping in during the 1930s, the federal government crowded out those innovations, kicking off a lot of economic growth as farmers increasingly found it more lucrative to sell their properties for suburban development—enabled by, among other things, low-cost distributed electricity—than continue to farm.
There is some sad irony in the American Jobs Plan seeking federal investments in clean energy, which are modern derivations of the same technology used on rural farms almost 80 years ago, technology made non-competitive then by New Deal investments in infrastructure. Either way, today there are 19 million Americans without access to broadband at threshold speeds, roughly 7.6 million households. The American Jobs Plan proposes $100 billion for this effort over the next decade.
$100 billion for 7.6 million households is $13,160 per household. SpaceX’s Starlink service costs $500 for hardware and then $99 per month for high-speed broadband. At this point, we should all be able to imagine the bold and historic spending package proposed by some future administration to modernize broadband systems that have been inadequately maintained.
None of this is to suggest that broadband isn’t important. It is. So are roads and bridges. So is transit. So are water, wastewater, and drainage systems. These things are important, but they aren’t important in and of themselves. They are only important to the extent that they are a platform for growing our local wealth, capacity, and prosperity.
For the past many decades, spending on infrastructure has not built our local wealth, capacity, and prosperity. It has, like the American Jobs Plan would do, provided us an injection of spending, a fiscal sugar high—followed by a hangover of commitments we are systematically unprepared to meet.
In that way, the American Jobs Plan is simply business as usual.
Tomorrow, I am going to get into how we create systems that make us wealthier and grow our capacity. If you would like a preview of that, check out chapters 7 and 8 in my book, Strong Towns: A Bottom-Up Revolution to Rebuild American Prosperity. And, if you haven’t already, you should sign up for the Strong Towns email list so we can keep you up to date on what it takes to build a strong town.
Read Part 4: “The American Jobs Plan Delays Necessary Infrastructure Reform”
MoDOT recently put out a tweet celebrating the 50-year anniversary of a highway that tore up Kansas City’s downtown. Here are just some of the (rightfully) angry reactions they got.