Brookings
By Adie Tomer, Caroline George, and Joseph W. Kane February 1, 2023 With the 2022 midterms ushering in a divided federal government, the consensus view—at least in the media—is that Washington’s moment to enact big policy measures has now passed. The New York Times, The Washington Post, The Wall Street Journal, and others predict that disputes between a Republican-led House and Democrat-led Senate will cause federal legislative work to grind to a halt. A Politico headline said it most succinctly: “Biden’s era of big government is over.” It’s true that a divided Congress should mean a less productive and less ambitious legislative calendar. But Washington has only begun to execute all the work created by the previous Congress—and nowhere is that more true than infrastructure policy. Between the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA), the 117th Congress invested $1.25 trillion across the transportation, energy, water resources, and broadband sectors for the next five to 10 years. It’s now the Biden administration’s responsibility to get that historic amount of money out the door—yet the bulk of it is still sitting in federal coffers or unrealized tax credits on the federal balance sheet. Nor will implementation outside Washington be easy. Leaders in state and local governments, utilities, and qualifying industries will confront a range of challenging economic conditions to put all that federal money to work. Significant price inflation in the construction sector, the growing cost of municipal debt, a tight labor market, and a general downturn in state and local government revenues could all limit how many projects move from planning to physical construction. Communities and companies may need to right-size their infrastructure ambitions for those volatile economic realities. View the full article: Brookings.edu
Comments