Why is Infrastructure So Expensive in the U.S.?
Melissa Harris-Perry: This is The Takeaway. I'm Melissa Harris-Perry, in for Tanzina Vega. For much of his political career, Joe Biden has been teased for his verbal gaffes and goofs, but he's not alone. Do you remember this eek moment from President Obama during his 2012 reelection campaign?
President Obama: If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you've got a business, you didn't build that. Somebody else made that happen.
Melissa: Ugh. I mean, you just knew what the soundbite was going to be and how it would get used.
President Obama: You didn't build that, somebody else made that happen.
Melissa: Oh, cringe. Listen, I'm not hating. This was fair game in a presidential campaign, but the focus of the soundbite deflected attention from the far more important part of what President Obama was saying here.
President Obama: Somebody invested in roads and bridges.
Melissa: It's not just somebody who invested in roads and bridges. It was us, the American people. Throughout the 20th century, our government on our behalf, in an overwhelmingly bipartisan fashion, made significant investments in our core infrastructure. They joined up with private industry and American workers and completed projects that so transformed our built environment and our way of life, that honestly, they've kind of become invisible to us.
Yes, I mean the railroads, interstates, bridges, highways, and levees. But also the curbs, gutters, sewers, drains, stoplights, and yes, even the yellow lines that divide traffic going opposite directions. [traffic sounds] This is the infrastructure that makes it possible for you to live 40 miles from where you work every day. It's how we stock grocery shelves. It's why you can have almost anything you imagine delivered directly to your 23rd floor apartment, and it's why we could vaccinate nearly half the adult population against a deadly pandemic in less than six months.
But the invisible core of our nation is crumbling. In its 2021 report card, the American Society of Civil Engineers gave our national infrastructure a C minus, but President Joe Biden has made infrastructure a significant policy priority of his new administration. Here's President Biden speaking last week about his ambitious bipartisan infrastructure deal.
President Biden: I'm pleased to report that a bipartisan group of senators, five Democrats and five Republicans, part of a larger group, has come together and forged an agreement that will create millions of American jobs and modernize our American infrastructure to compete with the rest of the world and own the 21st century.
Melissa: The agreement reached by the president and a group of moderate senators to spend $1.2 trillion over eight years, would be the largest investment in infrastructure in almost a century. But there's one question that Biden must be able to answer before Americans will enthusiastically endorse this plan. Why does it cost so much? To help us get behind the dollar sign soundbite and truly understand the cost of infrastructure, is Jerusalem Demsas, policy reporter at Vox. Jerusalem, welcome back to the show.
Jerusalem Demsas: Hi there. Thanks for having me.
Melissa: Thrilled to have you back. Your piece was so helpful and useful in terms of thinking about this. Let's start with simply, what is infrastructure in 2021?
Jerusalem: I think that's been a big question for especially Democrats and President Joe Biden. Traditionally people think of infrastructure as the physical infrastructure you described, things like roads, bridges, gutters, curbs, water mains, but infrastructure is supposed to be the basic underlying, physical and organizational tools that we use in order to support the rest of our lives.
The Biden administration is making the case that that should include things like broadband, that should include things like childcare, and other priorities that they have. I think it's less relevant what we call it and more relevant about whether or not the American people feel like it's a good use of taxpayer dollars.
Melissa: Let's talk about that good use of dollars. When we're thinking about how expensive this is, can you help us to understand how litigation costs actually drive up the cost of infrastructure?
Jerusalem: Sure. The first thing I want to say right at the top though, is we're going to be talking a lot about why it costs so much to build in the United States, but sometimes people hear this conversation and they assume we need to slash budgets and that we're spending way too much money, but the United States actually spends very little of its GDP in comparison with our peer countries on infrastructure. We spend about 1.5% of our GDP on public infrastructure, while the UK spends 2%, France spends 2.4%, and Australia 3.5%.
Actually a lot of the problems we're going to talk about stem from the fact that we're not willing to actually spend on the upfront costs to make sure that we're actually getting the best bang for our buck. With that said, litigation costs are a really big problem. In 1970, the United States passes the National Environmental Protection Act.
The goal was to ensure that when federal dollars were being spent on either federal projects or private projects that needed a federal permit, which is the majority of projects in the United States that are big transit projects, that you need to make sure that you're not having some sort of negative environmental impact. That's a really good goal to have, but what ends up happening is that gets essentially hijacked by a bunch of people in order to stop construction projects that they just don't personally like, even if they benefit the entire community writ large.
To just put that into perspective for you, essentially what happens is you have to create an Environmental Impact Statement, an EIS. The average EIS used to be as short as 10 pages. Now it's more than 1,600 pages and takes potentially four and a half years to complete on average, which means that you're delaying by several years every time you're trying to build.
That means that people can litigate and can actually make sure that projects that are good for the broader community never end up happening, simply because they don't like the view, they don't want to deal with construction. Things that are reasonable things to be upset about, but not ones that are reasonable to stop entire transit lines over.
Melissa: Let's just pause for a second. You hear the word environmental impact study and I'm thinking, let's make sure that you're not poisoning the water. Let's be sure that you're not taking the habitat from animals that wouldn't otherwise have it. You're telling me that it's about the wealthy who are protecting their view?
Jerusalem: Yes, in many cases, and this is a really big problem that several economists and several transit researchers have been pointing to for quite a long time. People have weaponized the process in order to protect their own interests. I grew up in Montgomery County, Maryland, and before I was even born, they were thinking of creating a transit line across the county. A group of wealthy residents essentially began suing because they said that there was some sort of environmental impact, that there was some sort of potential species that would be at risk.
They didn't have any evidence for this and they ended up not having any evidence for it at all, and the courts didn't find any, but they ended up delaying the project for decades. It's still not built to this day and it's something that would have benefited lower income workers who need to get to the higher income areas quickly and don't have quick ways to get there right now. Domestic workers who live in one part of the county are having difficulty getting over to the other part of the county where the jobs are.
There's a lot of public comments that you can look through, that show that a lot of times people are actually trying to protect the view from a country club, or they are upset at the idea that there are lower income people from other counties who are going to be traveling through their area. It becomes very clear that this has very little to do with the environment. There are even more egregious examples. In California they have their own version of this law called CEQA.
Essentially it's been used to protect parking lots so that people don't have to build bike lanes. These are things that are very clearly not environmentally friendly projects. It's been used to kill even solar projects and wind projects. Very clearly, often it's not being used to protect the environment at all, but just the interests of wealthy Americans.
Melissa: I feel like you've built a really powerful story here. One where you're saying on the one hand we talk about this as being expensive, but actually from a percentage basis, it's actually that we're not spending enough. But in order to spend more, we're going to need to tax some folks, and the people who have the money or the tax, are the same people who are already beginning to, or have been for a couple of decades now, really standing in the way of these projects.
Is there a way to tell the story, to drive the narrative, to organize folks in such a way that actually builds that sense of collective and communal 'we have to build this together'? Which I think is what President Obama meant to say back in 2012.
Jerusalem: I think two things. Firstly, I think the idea that we necessarily have to tax people to spend on these kinds of projects is maybe not the case. We have extremely low interest rates right now which means that borrowing from the federal government's perspective is, essentially we're giving away money by not borrowing at this point with interest rates low.
Secondly, I would say that this has caused massive economic and environmental harms and it's something that President Biden came in with a mandate to tackle both of those crises. NYU researchers noted that there are studies that show building dense urban train networks could increase aggregate economic growth by 10% across the country. That's wages for real people. That's making sure that people can actually get to their jobs. That's making sure that people who want to live in certain regions have a way to do so.
Then on top of that, of course, we're talking about the environmental impact here. There is no way to really combat climate change without ensuring that especially in dense urban places, places like Boston, New York, Los Angeles, Seattle, San Francisco, DC. That in these places, people are able to get around without having cars and that they can make that choice without it being a massive cost to them. In many of these places, it is not possible to use mass transit and get to work on time in a reasonable way.
Creating a system in which people can live in that space is very, very important. I think making the case of both an economic and environmental one, but also realizing that even though I'm saying that it's protecting interests of some of these wealthy folks, it is a very small selection of people. When I was talking about those bike lanes that were stopped in San Francisco? That was one person. This is not like a mass movement of people who are using these things.
There's one person who delayed bike lanes for several years and during that time, 2,000 people ended up actually getting hit by a car when they didn't have a protected bike lane. That's what we're talking about here, is that fact that very, very small groups of people can hijack this. I don't think it's clear at all that the majority of wealthy people are opposed to transit or are opposed to this kind of development.
Melissa: That is so useful for understanding how this is operating. I also feel like your economic analysis is a very useful way for us to think through this. Just tell us, are we getting a good return for each of the dollars that we spend on infrastructure projects?
Jerusalem: I would say no. Right now, there are a lot of reasons for this. Americans transit agencies don't have the incentive to learn from other countries and to make sure that they are actually bringing things down to cost. A lot of it has to do with the fact that they're so underfunded, but just to give you some numbers, in New York, the Second Avenue subway cost $2.6 billion per mile, but in Copenhagen, they built a project at $323 million per mile. This is massive differences in costs that have a real impact on how much cost overruns actually happen.
Melissa: Jerusalem Demsas is a policy reporter at Vox. Jerusalem, thanks so much for joining us.
Jerusalem: Thank you.
Melissa: Right now I want to turn to a very different way of thinking about cost with one simple question: Are highways racist? Transportation secretary, Pete Buttigieg, weighed in on this back in April in an interview with [unintelligible 00:12:29]
Pete Buttigieg: There is racism physically built into some of our highways.
Melissa: Those comments were ridiculed by many Conservatives online and condemned in the opinion pages of the Wall Street Journal. Here to give us more context and help us understand the disproportionate burden of infrastructure development on communities of color, is Robert Bullard. Dstinguished Professor of Urban Planning and Environmental Policy at Texas Southern University. Professor Bullard, welcome to The Takeaway.
Professor Robert Bullard: Thank you.
Melissa: It's an odd way to put it, but let me just ask it this way. Are highways racist?
Professor Bullard: Highways are not racist, but highway policy planning has been used in a way that disproportionately impact people of color. The triple whammy that will make this infrastructure be in a way discriminatory is policy, planning and funding. The way it happens is that you can almost map which communities get the best infrastructure and which communities don't. It tracks closely with race and income.
Melissa: I was just talking with a reporter from Vox who was walking us through the idea that very small groups of wealthy well-connected individuals have been able to stop, for example, mass transit projects, or even things like bike lanes, because of what they're calling the environmental impacts, so holding these things up for years. Yet I'm thinking about your work in which whole communities were trying to address issues of real environmental impact, and often these projects were just done anyway. What is the asymmetry in power here?
Professor Bullard: America is segregated and so is pollution. If you look at the way that people of color and the environmental justice community has used the National Environmental Policy Act, is very different from the way your guest described it. Many of our communities of color are fighting projects that run freeways through their living room, or set dirty coal fire power plants next to their schools, or chemical plants, refineries. We were able to get the National Environmental Policy Act to incorporate an environmental justice equity lens, whereas before it was just using the idea of environmental impacts. Environmental impacts are not- the negative impacts are not distributed equally across the board, and the pollution follows people of color and racist planning and formulations.
Melissa: Let's talk a little a bit about highways. I know there's a recent example right there in Houston, where you are with the proposed expansion of I45. Can you tell me about that?
Professor Bullard: If you look at highways-- I wrote a book though in 2004 called Highway Robbery: Transportation Racism and New Routes to Equity. Transportation and highways historically have been used to mow down communities and using eminent domain and other kinds of strategies. I45 which runs north and south, runs through Houston's historic Fifth Ward and and Kashmere Gardens, was impacted 50 years ago. This past year there was a proposal to expand it and so you're building on top of inequity.
The idea was, no, we don't need to have another highway that's going to destroy this Black and Brown community. The secretary, Pete Buttigieg, weighed in and basically said this is another form of environmental discrimination, environmental racism, and transportation racism. This is not new or news, but it's unique in that this happened as soon as he got into the cabinet.
Melissa: Is there a way to address the infrastructure needs of the country in a way that is racially just, and actually addresses the infrastructure needs of Black communities, rather than just literally paving those over?
Professor Bullard: Yes, there is. We have a a strategy called Justice40 that we were able to get the administration to talk about making sure that infrastructure and other investments and benefits go directly into those communities that need them. All infrastructure is not created equal. Just because you have a proposal to build a bridge or a road or a highway, doesn't necessarily mean that that highway will benefit all communities in an equal way. In many cases highways run through neighborhoods where a high portion of residents don't even own cars so there are very few benefits for that.
We talk about issues of parks, bridges, roads, schools, solid waste, storm water, transit, wastewater. These are all infrastructure issues and if you look at them in a way of which communities don't have adequate resources and funding, you can really predict where money should go. It's no accident that many of our schools, for example, and our cities infrastructure is in bad shape. Many of these schools are located next to, across the fence, or adjacent to chemical plants and refineries and other kinds of toxic facilities.
So that when we talk about an infrastructure, it's more than roads and bridges, it's also talk about infrastructure for planning in our organizations to make sure that money, tax dollars follow need, as opposed to the way it really happens in the real world, is money follows money. Money follows power and money follows whites. It's no accident that the more affluent communities have more of infrastructure: Parks and green space, trees, and other kinds of amenities, whereas communities of color generally are barren. That's not just, that's not fair and that's not the way that federal funds should be used.
Melissa: Professor Robert Bullard, the distinguished professor of Urban Planning and Environmental Policy at Texas Southern University. Thank you for your body of work. Thank you for your clarity about what infrastructure is and how to do it in ways that are just.
Professor Bullard: Thank you.
Melissa: Last week President Biden and a bipartisan group of senators announced that they'd agreed to a $1.2 trillion infrastructure deal, but what happened in the days since is a little confusing, so stick with me here. Shortly after the agreement was announced, the president said the compromise agreement would only go through if a second infrastructure bill, which includes things like childcare and healthcare, passes as well.
President Biden: If only one comes to me, if this is the only thing that comes to me, I'm not signing it. It's in tandem.
Melissa: Those comments didn't sit well with the Republican senators who'd been part of the compromise. After hearing their frustration, Biden had to walk back his comments and said he did not intend to threaten a veto. One of the lead negotiators on the Republican side, Senator Rob Portman from Ohio, says he was glad to see the president clarify his remarks.
Senator Rob: We were all blindsided by the comments the previous day, which were that somehow these two bills were connected.
Melissa: Are the two sides finally ready to move forward with this bill? Joining me now to explain all of this is Nick Fandos who is the congressional correspondent for The New York Times. Nick, welcome to The Takeaway.
Nick: Glad to be here. Thanks for having me.
Melissa: Help us to understand what is different in the two bills that are on the table right now?
Nick: It's helpful to step back and remember several months ago when President Biden rolled out two plans, the American jobs plan and the American families plan that constituted his big sweeping economic and social agenda. These two bills are trying to go and enact most of that, turn most of it into legislation. But one of them is bipartisan and one of them is probably going to end up being Democrats only.
The bipartisan bill is things like traditional infrastructure projects. There's a lot of money in there, tens and hundreds of millions of dollars for roads, for fixing up bridges, for bringing high speed internet both to cities and rural parts of the country that don't have it, to cleaning up water pipes, getting lead out of water pipes, investing in public transit, creating a network of electric vehicle charging stations.
There's some climate resiliency money in there, but a lot of it looks like what an infrastructure bill that Republicans and Democrats might have written 10 years ago would be, with some updating. That's the bill that we're talking about that was introduced last week. At the same time though, Democrats are trying to put together their own bill that will go through a separate fast track budget process that will mean they could do it without Republicans, that is more liberal and frankly has more to do with social safety net programs, what they are calling human infrastructure, so that may well end up including money for healthcare workers, for daycare, for expanding Medicare, as well as potentially tax increases to pay for it.
Rolling back parts of Republican's 2017 tax plan that really lowered rates for corporations and for people making capital gains and things like that. The details of that plan are less particular right now, but they're probably going to be bigger, costlier things that Republicans wouldn't get on board with.
Melissa: It surprising that a bipartisan deal of any kind is possible in today's Washington?
Nick: Any time Republicans and Democrats can come together on something, it's surprising, and particularly here given just the politics around President Biden's ambitions. Republicans feigned outrage when he said he was going to hold these two bills together in tandem, but the president has not been shy about how ambitious his agenda is, and frankly Republicans and Democrats were always going to have to make their own political calculations about whether it was beneficial or harmful to the country, but also to their own party's political chances to work with each other.
In that sense I was a little surprised that they decided to come together on this, because if the plan works out, Republicans are going to in effect be supporting part of President Biden's multi-trillion dollar agenda, a lot of which they don't support, and Democrats are going to be letting them get credit for part of it, even if they won't go along with the whole loaf.
Melissa: Nick, I feel like politics or political science 101, we learned earmarks, even though they seem bad, are good, because Congress people want to build bridges and roads and that allows us to get all these other things through by earmarking. Then earmarks went away and along with it, so did a lot of the co-operative work that allowed people to make those deals. Should Biden maybe be holding out to put the human infrastructure stuff in with the roads and bridges?
Nick: I think it's become clear over the last couple of months that he is simply never going to get the Republican votes that he would need to pass those kind of priorities through regular order, so that's what's led to this awkward two track process, where they're trying to move two big bills simultaneously. One with just the Democratic votes that will go through this other special process called budget reconciliation.
I think whether or not he should hold up one bill for the other, I think maybe a debate for his advisors to have, but the reality is progressives on Capitol Hill who want to see Congress take their fleeting moment when they [unintelligible 00:24:48] Washington and do something really big, are not going to let him just get away with, or complete this process with just something small.
I think they're going to throw some of their own weight around and try and get something really big done and say if Republicans aren't going to go along with it, well, too bad for them, we can leave them on the sidelines altogether. We could try and put everything into a big reconciliation package. That creates its own problems with moderate Democrats, Joe Manchin and others who we talk a lot about. But his allies and elements of the Democratic party are going to be doing everything they can to make sure he goes as big as possible.
Melissa: Going big also means paying a big bill. Where's the revenue coming from?
Nick: Each of these bills have different-- the jargon on Capitol hill is called [unintelligible 00:25:41] In the bipartisan bill, they are, shall we say creative and eclectic and more modest. Some of it is repurposing money from the big coronavirus relief packages that passed in 2020. Money that never got spent or was meant for unemployment insurance but then Republican governors canceled the program in many states.
That money would be set towards this. There's other anticipations that the Biden administration would invest more in enforcement capacity for the IRS and that would bring in increased tax revenue, that would help pay for some of this. Part of it, they're just making a bet that the economy is going to improve with this investment and therefore tax revenues will be higher.
Now as I said, for the bigger more ambitious Democratic bill, they're really looking to pay for that with tax increases on the rich and on corporations, and I think that's where the real money will come from. Trillions of dollars in revenue.
Melissa: Let's talk about the timeline a little bit. This is a lot of money and a bipartisan agreement. We've got a-- seems surprising but the midterms are actually kind of around the corner. Folks already starting to raise money for their reelection campaigns. Will we see that money literally on the ground, on the roads and bridges, soon and in enough time to make a difference, moving towards midterms?
Nick: That is certainly President Biden's hope. The schedule that leaders on Capitol Hill seem to be trying to set up right now, is that the House and Senate are going to work really furiously up to their August recess, and try and get this process maybe halfway done by then. Then come back in September and try and complete all their work before the month is over.
The idea being that there are a lot of deadlines, particularly for existing transportation programs, that expire at the end of the month, and that they want to get these things in place, and as you say, get the money pumping out the door. Because it takes a long time to spend millions, billions, even trillions, especially trillions of dollars. The longer this goes the harder it is, and frankly, I think it gets a little harder politically to corral the votes as well, so they're aiming for the end of September. We'll see. Deadlines have a way of really slipping on Capitol Hill.
Melissa: Yes, but also if they need any help in spending millions, billions and trillions, I totally have ideas about that. Nick Fandos is a congressional correspondent for The New York Times. Thank you so much for joining us.
Nick: Thank you.
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