A $10 Trillion Pony: Why 'Progressives' Are Devastatingly Wrong on Infrastructure Spending

Source: American Society of Civil Engineers (ASCE)

President Biden has proposed an infrastructure plan, with the price clocking in at $2.7 trillion, including $2.3 trillion in direct spending and $400 billion in tax credits.

It is poised to be the largest infrastructure spending plan ever, but the progressive left has been busy claiming that it isn’t good enough. Not-enoughism has become a staple of leftist politics these days when Democrats are in power, so that isn’t particularly a surprise. The reasons they use to point to Biden’s plan as inadequate, though, are completely bonkers and represent a fundamental lack of understanding on what infrastructure costs, who builds it, and how it’s paid for.

The left flank of American politics, from Bernie Sanders to Alexandria Ocasio-Cortez to Ro Khanna have all thrown their support behind a $10 trillion topline number for infrastructure spending. But they have broadly failed to explain the details of their spending plan, leading me to conclude that they are largely using the smoke screen of a big number to pretend they have a big idea, but Khanna attempted, in a Twitter thread on Friday, to explain what he considers to be the good and the not-so-good of the Biden plan.

According to Khanna, much of the left’s demands on climate and infrastructure appears to be based on a report from the Sierra Club which lays out infrastructure spending priorities of $9.5 trillion over 10 years. But the Sierra Club’s proposal is full of outdated information, riddled with circular analysis, and retrofitted with numbers derived from the amount of jobs it wants the proposal to create - 15.6 million - rather than actual infrastructure needs, capacity, or priorities.

For example, the American Society of Civil Engineers, or ASCE, says in its 2021 report that over the next decade, the United States faces a funding shortfall of $197 billion in our electricity infrastructure (the grid and the rest), but the Sierra Club - I assume on behalf of the Biden-not-doing-enough brigade - inflates the number all the way to $427 billion. The Sierra Club says its number on the electricity infrastructure as well as much of the rest of its report is based on an analysis from the Political Economy Research Institute at the University of Massachusetts Amherst. That sounds like an impressive - or at least serious - source, until one realizes that the PERI study repeatedly lists as its main source material an April 2020 letter to Congress from… the Sierra Club!

Additionally, the PERI study appears to be a line-item analysis of how many jobs will be created in each sector affected by the spending plan that the Sierra Club suggests, and to a degree the likely profile of people who are likely to be hired, not an analysis of whether those projects are actually needed as part of an infrastructure future that, under President Biden’s vision, will not only rebuild our infrastructure but rethink them. It appears simply that they estimated the number of jobs created per $1 million spent, the number of jobs they wished to be created through this program (clocking in at 15.6 million) and simply used arithmetic to get to their desired spending numbers.

It should also be noted that much of the Sierra Club’s - and the left’s - spending priorities appear to be redundant. Why, for example, does one need to spend separately on wind turbines and solar panels when those investments are already being made as part of the investments in the electric grid? Fuel-efficient automobiles are already the wave of the future, and the Biden administration is already raising fuel efficiency standards in tandem with California. So why are leftists demanding an additional half-trillion in federal spending on it?

The answer is unclear, but even under their own analysis, they do not claim to have better climate outcomes than the President’s plan. Their report claims that the plan they are pushing will lower carbon emissions by 45% by 2030, while the President’s plan achieves net zero emissions by 2050. The Sierra Club appears to be on board with the 2050 timeline for zero emissions.

There may, however, be one hidden reason behind the much of the left’s clamoring to spend an insane amount of money achieving largely the same infrastructure and climate goals the President’s plan achieves with a much lower price tag to the taxpayer: their irrational aversion to nuclear power.

Nuclear power is clean, cheap, reliable, and yes, safe, but the Sierra Club is adamantly opposed to it. That means that those following the Sierra Club ideology has to make up for the 20% of the electricity already produced from nuclear sources today, and create insanely efficient systems of distribution and storage. Storage technology that is required to store enough power to meet the needs of modern civilization simply does not exist, and only nuclear power can rival the reliability of fossil-fuel generated power. The sun sets, the wind stops blowing, and water often has to be pumped before it can generate electricity, but nuclear power plants can generate electricity 24x7.

What happens when you cannot store energy or produce it reliably at all times within a reasonable distance from civilization? A single grid must be capable of transporting energy over great distances, between the production source of a given time and the needs. If it’s a stuffy night wherever you are, you better hope the wind is blowing somewhere else no matter how many wind turbines you’ve got in your backyard. Without nuclear energy as a large part of the solution, getting to zero carbon energy will be insanely expensive and difficult, if not impossible in the timeline that scientists tell us we have to.

The last fallacy pushed by the spend-more-for-show caucus is that they appear to assume that the federal government alone is responsible for America’s infrastructure, that it alone funds it, and that it must spend every dollar that is to be spent.

That, obviously, is not true.

The vast majority of infrastructure spending is done by state and local governments, because state and local governments control the vast majority of infrastructure assets in this country. According to the Center for Budget and Policy Priorities, state and local governments own over 90% of non-defense infrastructure in the country, and they pay three out of every four dollars spent in America on physical infrastructure. Because states own so much of the critical infrastructure, the federal government cannot simply sink money in a hole and create infrastructure without the cooperation state and local authorities, as well as the private sector.

And states are not sitting idle. Local and state governments - and people in the states and municipalities - have taken matters into their own hands over the past decade and are starting to spend more on their own infrastructure needs. While the the only time federal spending on non-defense infrastructure really increased - after falling for most of the past 10 years - was in response to the pandemic - states have been steadily increasing their spending. Between 2014 and 2018, infrastructure spending by states have increased by 14% to nearly $170 Billion per year.

In a sign that what states are doing is actually working, over the past decade the quality of our roads and bridges has actually improved. Between 2012 and 2019, the percentage of bridges considered to be in poor condition fell from 9.4% to about 7.5%, and the condition of roads and highways have also slowly improved. State and local investment has dragged the ASCE grade for America’s infrastructure has climbed out of the D’s for the first time in 20 years, countering and making progress against the current of prolonged federal disinvestment.

President Biden’s infrastructure plan looks to turn the tide on that federal disinvestment, and invest unprecedented sums of money in American infrastructure. But he does not plan for the federal government to go it alone, because it simply cannot. Thanks to massive federal spending on COVID stimulus, including the American Rescue Plan enacted last month, states are sitting on a pile of cash, and they are already spending it on infrastructure. Once a federal infrastructure package is approved by Congress, the Biden administration will no doubt find willing allies in states run by Democrats and Republicans, regardless of the partisan division on the package in Congress.

The focus of the progressive movement should be to help President Biden secure passage of his infrastructure initiative, not to weaken his hand by suggesting wild-eyed, poorly-devised proposals that cannot stand the test of scrutiny.

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