U.S. Infrastructure Bill: Public Works

This month, following a year of speculation and months of legislative uncertainty, the U.S. passed the Infrastructure Investment and Jobs Act, containing over $550 billion of new spending. Many of these investments are well-justified, but the spending likely won’t stop there.

We have written in the past about the political conundrum of infrastructure spending. Most politicians support investment in their districts, and the role of government in providing basic public services is not in question. Important details like identifying specific projects to be funded and how to pay for them derailed past proposals, but this year’s bill broke through to earn bipartisan support.

Surely some members of the Biden administration have taken to heart the struggles of the economic recovery under the Obama administration. Taking office amid a recession, Obama championed the American Recovery and Reinvestment Act of 2009, a $787 billion stimulus that included $105 billion for “shovel ready” infrastructure projects. However, major building projects require years of planning; the Recovery Act did little to get people back to work quickly. For this reason, Biden’s push for infrastructure was not positioned as economic relief, and this bill came after a final COVID relief act with a more immediate spending horizon.


Today’s circumstances are quite different than in 2009. The labor recovery from the COVID-19 recession continues. The greatest challenge now is finding workers to fill the plethora of open jobs. New public works will require labor and materials that are in short supply, to say nothing of the trucks and equipment needed on job sites. Spending is expected to take place over the next five years. Any lead time to start projects may be a benefit to allow time for the labor market recovery to continue; if shortages persist, government projects can be slowed or postponed with little economic loss.