Biden’s Not‐​Really‐​Necessary Plan

Randal O’Toole

President Biden’s proposed infrastructure plan includes $621 billion for transportation. It would spend $115 billion on accelerated road and bridge repairs, $20 billion for “vision zero” and other anti‐​auto programs, $85 billion for mass transit, and $80 billion for Amtrak’s backlog and expansion of Amtrak service. It also would spend $174 billion supporting electric vehicle manufacturers, $25 billion on airports, and $17 billion on inland waterways. That’s $104 billion short of $621 billion, but the White House press release doesn’t say where that $104 billion will go.

Non‐​transportation items in the plan include $111 billion on safe drinking water, $100 billion for high‐​speed internet service, $100 billion on the electrical transmission system, $10 billion on a Civilian Climate Corps, $213 billion on housing, including retrofitting homes to save energy, $100 billion on new schools, $18 billion on new veteran’s hospitals, $10 billion modernizing federal buildings in Washington DC, $400 billion on care for the elderly and disabled, $180 billion on research, $300 billion on manufacturing and small businesses, and $100 billion on workforce development. News reports call this a $2 trillion plan but by my count it adds up to at least $2.26 trillion.

Instead of calling this an infrastructure plan, the White House calls it “the American Jobs Plan.” This is ironic because the only reason why most unemployed people don’t have jobs today is the lockdowns enforced by mostly Democratic governors. End the lockdowns and there won’t be many unemployed people to take the jobs created by the Biden plan.

That should be okay because most of the plan isn’t really necessary. The money for road and bridge repairs isn’t needed because the condition of America’s roads and road bridges has been improving each year without a congressional rescue plan. However, Biden’s plan earmarks funds for some major bridges, which will please politicians representing the states those bridges are in. Although the White House press release mentions the cost of traffic congestion, it isn’t clear that any of the money will be spent actually relieving congestion.

The money for mass transit and Amtrak isn’t really needed either because the pandemic has accelerated the decline in the importance of these systems that was already taking place before 2020. Biden’s plan to double funding for transit and quadruple it for Amtrak rewards agencies for doing a lousy job of carrying few passengers. However, Biden’s plan earmarks funds for new Hudson River tunnels and other projects in the Northeast Corridor, which will please politicians in New York and New Jersey.

Electric vehicle manufacturers, airports, and inland waterways seemed to be doing fine either as private sector operations or with existing funds. But airports and dredging have always been sources of pork barrel and this bill will be no exception.

Biden proposes to spend part of the $213 billion housing funds bribing local cities to end so‐​called exclusionary zoning, which has been attacked as causing unaffordable housing even though housing is unaffordable in only a few states and relaxing local zoning hasn’t made housing more affordable. None of it will be spent encouraging states to end growth‐​management policies (restrictions on development of rural lands) that are the real cause of unaffordable housing.

I have less expertise on the other programs in Biden’s bill, but it strikes me that many of them—the electrical grid, high‐​speed internet, manufacturing, small businesses, and housing — are mostly private and don’t need massive federal subsidies (which will end up being accompanied by massive federal red tape and regulation). What they really need is for government to get out of the way.

While politicians will love it, the huge increase in federal spending proposed by the Biden plan is going to create a serious problem for private employers. Unemployment rates were extraordinarily low before the pandemic and they have quickly declined again in states that lifted lockdowns. Anyone employed with the dollars in the American Jobs Act will be one less person available to employed by private businesses. This will increase consumer costs and could contribute to an inflationary cycle caused by a combination of a labor shortage and printing of money to pay for the federal deficit.

Even the American Society of Civil Engineers admits that it was crying wolf when it claimed that America’s infrastructure deserved a D+ grade, having raised it to a C- in its latest report card. Personally, I would give transit and Amtrak a low grade but give most other infrastructure a B or B+. That’s why I think of Biden’s proposal as the Not‐​Really‐​Necessary Plan.