Supporters of the $1 trillion infrastructure bill, which the Senate passed with bipartisan support on Tuesday, have repeatedly characterized it as an investment of record size.
White House civil servants, Republican and democratic lawmakers and social media users have all used the phrase “greatest in history” to describe the infrastructure package, which includes $550 billion in new federal spending and another $450 billion in revamping existing programs.
This is wrong. The package is certainly big: An analysis by the Brookings Institution, an unbiased think tank, concluded that the package would be a “generation investment” and “easily the largest infrastructure package in decades.” But it doesn’t quite match the size of several federal investment projects in the 20th century on a few measures.
Adie Tomer, a senior fellow at Brookings in metropolitan policy and the author of the report, told NewsMadura that the package would bring federal infrastructure spending to about 1.25 percent of gross domestic product.
In comparison, according to Mr. Tomer, infrastructure spending under the New Deal averaged 1.36 percent of GDP between 1933 and 1937. Peak spending occurred in 1933 at 2.96 percent with the launch of the Public Works Administration, which funded and managed the construction of more than 34,000 projects, such as New York City’s Lincoln Tunnel and the Hoover Dam.
Federal infrastructure spending declined in the following decades before rising again to about 2 percent of GDP in the 1970s and 1980s. At the time, the government repaired and added miles to the Interstate Highway System and provided billions of dollars in subsidies to water companies.
While the bipartisan package, which the House has yet to approve, won’t quite catch up with New Deal programs or highway and water projects in the 1970s and 1980s, Mr Tomer said infrastructure spending would “definitely exceed” New Deal investment if Democrats could also approve a separate $3.5 trillion economic package this year. That package will include additional infrastructure spending, including upgrading Veterans Affairs hospitals, creating additional affordable housing, improving Native American facilities, and investing in energy-efficient buildings and clean ports.
In a separate analysis, Jeff Davis, a senior fellow at the Eno Center for Transportation and the editor of Transportation Weekly, gauged the size of the infrastructure bill using estimates from the budgetary authority’s Congressional Budget Office — or the amount of money it spends. Congress authorizes agencies to issue – provided by the bill. (Mr. Tomer focused on “expenditure” or actual and projected expenditure.) According to the budgetary authority, infrastructure spending between 2022 and 2026 would total $840 billion. That’s about 3.45 of GDP in 2022 alone, or 0.64 percent of GDP over five years, Mr. Davis said.
The Federal Aid Highway Act of 1956, which created the highway system, authorized about $25 billion over 13 years. That was about 6 percent of GDP in 1957, or about 0.32 percent over the whole time span, according to Mr. Davis’ calculations.
Mr. Davis also noted that there were no reliable estimates of major federal infrastructure spending from earlier parts of American history, such as the government bonds and land grants provided as part of the Pacific Railway Act of 1862 to build the first transcontinental railroad or even land-build deals like the Louisiana Purchase.