The Biden administration signature infrastructure law was so badly designed that “real spending on infrastructure declined due to cost increases,” notes economics professor Alex Tabarrok, even as the federal government spent hundreds of billions of dollars more, increasing the budget deficit and the national debt.
Professor Tabarrok cites an article in Foreign Affairs by Harvard economist Jason Furman, who chaired President Obama’s Council of Economic Advisers.
In that article Furman explains how the Biden administration made infrastructure more costly, resulting in less of it, by boosting demand rather than supply:
the administration’s laser-like focus on the demand side came at the expense of addressing impediments to supply, such as excessive obstacles to permitting processes related to building infrastructure. As a result, infrastructure suffered an even worse fate than real wages. More than half the funds in the [Biden] Infrastructure Law dispersed to states through early 2024 went to highway and bridge projects, prompting a spike in highway spending, which rose 36 percent from mid-2019 to mid-2024. But the costs associated with construction, including asphalt, concrete, and labor, increased even more, leaving real infrastructure spending down 17 percent over the same period. In fact, the amount of federal investment in highways during every year of the Biden administration was lower than in any year from 2003 through 2020. Biden’s putative building boom was in reality a building bust.
As Furman points out, Biden’s infrastructure law also did not “address the root causes of the United States’ long-standing infrastructure unaffordability problem—excessive environmental reviews, labyrinthine permitting processes, and laws requiring that workers are paid prevailing wages—and, in some respects, worsened the crisis by adding new requirements….Spending such a huge amount all at once without any steps to increase construction capacity led to even higher cost increases for building materials than was reflected in the overall inflation rate.”
The Biden administration wasted money on incredibly inefficient transit systems. It chose to spend $500 million on expanding a subway system whose ridership is tiny and is falling compared to the local population. The Biden administration also decided to spend $8.8 billion expanding D.C.’s Union Station, which handles only a fraction of the traffic it used to. Trying to get people to ride mass transit systems was difficult even before the rise of remote work, because it takes so long to commute to and from work on mass transit. It can take an hour and a half to take buses or trains to work for a commute that would take only half an hour by car. Most train and bus stations are not right near where people live or work, and people taking mass transit often have to ride multiple different buses or trains to get to work.
