Senior Fellow - Brookings Metro
Joseph W. Kane
Fellow - Brookings Metro
Former Senior Research Assistant - Metropolitan Policy Program
The 2016 presidential election felt like a watershed moment for federal infrastructure reform. For the first time in decades, both the Democratic and Republican presidential candidates made infrastructure a central component of their platforms. Their proposals reflected years of consistent calls for congressional action from groups representing cities, states, and industries—all of whom welcomed the opportunity to debate their ideas in pursuit of new legislation and agency policy. Optimism and confidence out of Washington was palpable.
Now, just one year away from another presidential election, the federal government is no closer to wholesale infrastructure reform than it was in 2016. What went so wrong?
Unlike many other issues in the capital, politics was not the major obstacle. Infrastructure is famously nonpartisan in Washington, where both sides of the aisle regularly exchange ideas on transportation, water, and broadband policy. At different times over the past three years, House and Senate leadership expressed support for putting infrastructure debates on the legislative calendar.
We would suggest a different culprit. Washington could not deliver reform because Congress and the administration failed to commit to a process to rethink and redesign current law. Key parties agreed to do something, but they never actually debated what that something should be. Three years later, there is still no clarity on what “reform” even means.
To enact genuine reform—legislation that completely reshapes the government’s approach to infrastructure programming, funding, and regulation—federal leaders must be willing to revisit the fundamental goals the country’s infrastructure systems intend to achieve and honestly assess whether current policies share those objectives.
As it stands, current laws reflect a bygone era. Washington’s legacy policies still respond to challenges of a different time, like connecting cities across state lines, delivering telephone and cable service, or stopping sewage dumping. Today’s challenges—the most extreme income and wealth inequality since the Gilded Age, economic divergence caused by digitalization and global trade, the existential pressures of climate change—are different, and our current policies are struggling to address them.
To maximize value from existing infrastructure systems and strategically prioritize future improvements, the federal government must adopt a new set of economic, social, and environmental goals.
To maximize value from existing infrastructure systems and strategically prioritize future improvements, the federal government must adopt a new set of economic, social, and environmental goals. Our federal leaders and their state, local, and civic collaborators must be willing to rebuild our policies from the ground up, designing new approaches where it makes sense and keeping those legacy programs that still respond to today’s challenges.
To do so, it is necessary to convene technical and civic experts who can construct a framework to serve as a resource for a more robust policy debate within Congress and among national stakeholders. Over the next year, Brookings Metro will be doing exactly that as a way to kickstart a genuine reform process.
This brief makes the case for why it’s time for federal infrastructure reform. It first considers the current issues facing the country and what’s changed since Congress last adopted sweeping infrastructure laws. It then demonstrates how those decades-old policies cannot manage the challenges of this young century. The brief ends with a discussion of next steps, including what a genuine reform effort will require.
What is “infrastructure”?
Infrastructure encompasses a broad range of systems and facilities designed, constructed, operated, and governed across the public and private sector. These physical assets are either manmade or natural, often operate as part of larger networks, support a variety of economic activities, and provide a host of other services with a clear public benefit over the course of many years.
This series concentrates on three major types of infrastructure regulated by the federal government with a high degree of current or proposed public ownership: transportation, water, and broadband. Transportation infrastructure includes facilities used to move people and goods, such as highways, transit, railroads, ports, and the aviation network. Water infrastructure includes drinking water, wastewater, stormwater, and related green infrastructure assets. Broadband infrastructure includes the wireline and wireless connections essential to providing high-speed internet access.
Our 21st century challenges
The country today faces unique challenges to achieving shared, sustained prosperity—each of which have an inextricable relationship with our physical infrastructure systems. These challenges are national in scope, but still affect every community in distinct, local ways. Federal infrastructure policy can only achieve sizable, lasting impact if it can directly address these impediments to a more prosperous future.
There is no more pressing need than addressing climate insecurity. More frequent flooding in coastal and inland markets, more extreme storms and droughts, more forest fires, more warming—these are just the leading indicators of our climate instability. Each puts households in physical and financial danger and threatens the solvency of American businesses.
Current infrastructure networks and land uses make our climate insecurity worse. The transportation sector is now the country’s top source of greenhouse gas emissions, representing 29% of the national total. The country continues to convert rural land into urban and suburban development faster than overall population growth, leading to greater stormwater runoff, higher fuel consumption, and accelerated loss of tree cover, wetlands, and other natural resources. Existing pipes and water plants struggle to handle floods—or even daily rainfall—and many places have failed to adapt and invest in more resilient designs and technologies.
Income and wealth inequality represents another significant threat to American prosperity. While incomes for the highest-earning workers continue to rise, the average American household is stuck in place. Using inflation-adjusted data, income inequality in 2018 reached the highest level seen in 50 years’ worth of data. Meanwhile, the country’s wealth-building increasingly concentrates among a select group: In 2016, the top 1% of households owned 29%—or over $25 trillion—of household wealth, while the middle class owned just $18 trillion. Consumer spending, labor market outcomes, and savings rates are all affected by such inequality, as are many other parts of our economy.
Stalled real wage growth and a lack of a financial safety net mean many of our households face an inequitable infrastructure reality. Housing affordability is a challenge in metropolitan areas of all kinds, not just large, coastal cities. Transportation is the number two household expense after housing, primarily driven by vehicle costs and longer trips. Water and broadband prices are steep relative to many household incomes. All of this demonstrates how the country’s built environment is deepening our inequality.
Digitalization may be the defining macroeconomic trend of the 21st century, pushing businesses and workers to develop the products and skills that will keep the economy competitive into the future. Global supply chain management, e-commerce platforms, and ride-hailing already demonstrate the power of digitalizing traditional industries like manufacturing, retail, and transportation. The coming years will only hasten this transition as industries, workers, and communities find new ways to take advantage of artificial intelligence, the internet of things, and 5G wireless capabilities.
Remaining globally competitive in the digital age will require a highly skilled workforce, genuine digital security, and fast and reliable telecommunications networks—all areas directly impacted by infrastructure policy. However, there are still millions of Americans who do not have basic digital skills, do not have direct access to computing equipment, and do not have personal access to a broadband connection. Many rural and metropolitan neighborhoods do not have any high-speed connections, putting every business there at a disadvantage. And water, transportation, and energy systems can do more to leverage digital monitoring and automated response systems. Our digital transformation is still far from complete.
Finally, regional economic and fiscal divergence is leaving large swaths of the country behind. In the past decade, metropolitan areas with more than one million residents have accounted for 72% of national employment growth, demonstrating that economic momentum is present essentially only in a small set of places. A similar phenomenon exists within regions as well: Even in more prosperous metropolitan areas, some cities and older suburbs have seen their populations and jobs decline while other communities in the same metropolitan area grow. Meanwhile, across the country, municipalities’ general fund spending is rising faster than revenue growth, a pattern fraught with risk.
Whether at the metropolitan or municipal level, slow growth and shrinking communities can lead to a vicious cycle when it comes to maintaining essential infrastructure. Without a stable revenue base, local leaders must make difficult decisions, including delayed maintenance or more drastic service changes. Flint, Michigan’s recent water crisis is a perfect example of this phenomenon, where a long-run fiscal shortfall contributed to a public infrastructure failure.
Fiscal shortfalls in one jurisdiction can also impact entire metropolitan areas: Take the example of a pothole-stricken road inflicting vehicle damage on all who use it. As the major owners of public infrastructure—including most roads, water authorities, airports, and seaports—it’s in the federal government’s best interest to help local governments maintain essential physical services.
The future prosperity of the American economy depends on addressing this profound set of challenges, many of which were either nonexistent or underrecognized just a few decades ago.
The future prosperity of the American economy depends on addressing this profound set of challenges, many of which were either nonexistent or underrecognized just a few decades ago. That will require infrastructure policies that confront these challenges head-on.
Older legislation can’t manage modern challenges
Congress has historically enacted major infrastructure reforms to address transformative economic, social, and environmental changes, using policy to advance the shared national goals of the given moment. The New Deal and its sizable investments fostered social connections through new telephone services, unlocked industrial and household opportunity through new electricity sources, and offered jobs and training through a wide set of workforce development efforts. Beginning in the 1950s, the interstate highway system supercharged the country’s economic competitiveness by allowing industries to reliably transport their goods to far-flung markets. The passage of the Clean Air Act, Clean Water Act, and Safe Drinking Water Act reduced pollution and improved public health.
However, decades after their original passage, many of these policies still serve as the underlying foundation for how the federal government approaches infrastructure planning and investment. All around us, we can see signs that these policies no longer manage modern challenges.
Federal transportation policy continues building intercity connectivity using the technologies of the 20th century: the automobile and the airplane. These programs once led to the completion of the national highway system and a national aviation network. But today, decades later, the majority of federal funding continues to prioritize highway construction. Meanwhile, there is little direct federal support to communities whose local roads are in worse shape than federally supported highways, and where pedestrian deaths are on the rise. Transit agencies face a similar limitation, where federal funding can only support capital investments such as fixed-route construction and vehicle purchases, with no support for more frequent bus and train service that could put essential destinations and jobs in closer proximity to workers. And at a time when many commercial airports have lost service to regional neighbors, there is still no clear federal policy to build out regional high-speed rail networks.
The Clean Water Act and Safe Drinking Water Act both transformed the federal government’s approach to regulating water quality, making drinking water cleaner and reversing years of pollution into our rivers, lakes, and oceans. The original laws also supported direct grants to utilities and local governments to accomplish this work, a practice discontinued in the 1980s. Ever since, localities could only rely on loans made through federal capitalization of state revolving funds, which are more expensive than the grants they replaced.
Much has changed since Congress enacted these environmental laws—yet federal policy has not. Extreme floods, droughts, and storms have increased the vulnerability of the country’s aging pipes and plants—an acute challenge in declining or fiscally insecure communities. Localities have failed to invest in more resilient designs and technologies, including green infrastructure. The inability to properly measure and account for increased risks has impeded planning efforts, and a reliance on outdated procurement processes and funding channels has held back forward-looking investments.
While transportation and water legislation may be outmoded, Congress has never even approached comprehensive broadband legislation. Policies derived from the Communications Act of 1934 and the Telecommunications Act of 1996 primarily center on just phone and television service. The result is a patchwork approach to broadband, focusing on the physical technologies delivering internet service. This is a missed opportunity to define national goals like preparing workers for a digital future or ensuring that every household can afford and use a personal broadband connection.
Nor do these decades-old bills adequately consider the role of digital technology in the built environment. Rapid price decreases in computing power, cloud storage, and wireless capabilities—especially the coming 5G and Wi-Fi 6 platforms—allow us to track a range of products and activities in real time through what will become the internet of things (IoT). IoT will allow society to monitor water pipes, navigate autonomous vehicles, enhance streets’ walkability, and even change buildings’ energy use automatically. The federal government is vital to incentivizing development of this digital layer, from establishing responsible and secure data practices to clarifying local sovereignty over wireless installations. Such digital guidance can’t be found in laws written in the analog age.
Finally, there’s a real need to host a contemporary debate about the appropriate infrastructure spending split between local, state, and federal governments. Economic divergence limits the ability of certain localities to afford essential investments in their transportation, water, and broadband networks. But older legislation is often not clear about when and where the federal government should step in to maintain certain service levels.
It’s time to develop new federal policies
To set a path toward climate security, equitable opportunity, and digital competitiveness, the country would benefit from a revised set of infrastructure policies. But federal leaders can’t accomplish this by simply updating old policy architectures.
The U.S. needs to modernize its infrastructure policies before moving into practice. Rather than following a business-as-usual approach—continually debating who will pay for the same programs that have in place for decades—federal leaders must take a step back and address the gaps in our current thinking.
This is not to say greater investment is unnecessary. With many physical systems at the end of their useful life, infrastructure is clearly in an age of repair and replacement. Maintenance already accounts for over 60% of national infrastructure spending, and total public spending on infrastructure maintenance and operations rose by $23.2 billion between 2007 and 2017. But fiscal resources are not infinite, and public leaders can’t assume every older asset is worth maintaining. Before the public sector invests more, we need to define what we want to achieve.
As part of any infrastructure reform, federal leaders need to question old assumptions and demonstrate a willingness to redesign policies from the ground up. Any genuine reform process must start by answering a few fundamental questions:
- What broader national challenges should infrastructure policy address? What outcomes would qualify as success, and how can we objectively measure those outcomes?
- Where can these objectives have effects across transportation, water, and telecommunications issues?
- What is the right role for the federal government in supporting the objectives of national infrastructure policy, and how should that role interact with the responsibilities of state and local actors?
Answering these questions would build a new foundation for how the entire public sector, but especially the federal government, approaches infrastructure policy. It also will help address more technical concerns: determining funding responsibilities, clarifying opportunities for private financing, redesigning performance measurement, introducing greater fiscal accountability and asset management practices, and fostering innovation around technology, procurement, and permitting.
The 2016 presidential election was a promising opportunity for infrastructure reform, but it ended up being a false start. With 2020 approaching quickly, we shouldn’t fall into the same trap. Infrastructure reform is essential, but it also will require persistence, curiosity, and collective open mindedness.
Considering how long the projects we build last, we should take the time to develop policies that will last too—advancing productivity, equity, and resilience for generations to come.
Report Produced by Brookings Metro