Spending on infrastructure has fallen in real terms in America

Bringing broadband to under-served parts of rural America is one element of a giant infrastructure program that began in 2021 when President Joe Biden signed it into law. It was hailed as a historic opportunity to repair America’s bridges, rebuild its roads for electric vehicles and update its power grid and communications technology. However, instead of the anticipated surge, total infrastructure spending has fallen by more than 10% in real terms since the passage of the law. The most charitable explanation is that it takes time for big projects to get going. Construction is often behind schedule, and many of the biggest expenditures will come near the end of the infrastructure law’s five-year term. The problem is that inflation has been rampant in the construction sector, making delays that much more pernicious. However, delays are also a product of the infrastructure law itself. It included strict “Buy America” rules, requiring builders to source things at home to boost domestic manufacturing, and loaded on requirements to promote racial equity, environmental sustainability and fair wages. Despite the many frustrations, there are some bright spots. Several long-delayed projects are in motion. It is also important to recall the recent historical context: for decades American presidents failed to pass any significant infrastructure legislation. That makes the Biden administration’s efforts akin to “an athlete warming up to the game,” says Adie Tomer, of the Brookings Institution. “It takes time to get it right but they are absolutely doing it.”