Coronavirus stimulus may reduce the likelihood of an infrastructure bill passing in the next few months.
That’s what some experts predicted during a Brookings Institution webinar on Thursday.
Tracey Ross, director of federal policy and narrative at PolicyLink is confident that a federal infrastructure stimulus will pass by next summer, though others think it may hinge on whether a COVID-19 relief package is passed in the next two weeks. Both House Democrats and Senate Republicans have introduced significantly different relief plans.
“If either of those goes through, I think it reduces the probability of an infrastructure bill by next summer,” said Michael Pagano, director of the University of Illinois-Chicago Government Finance Research Center. “If neither goes through, I think there is a very high probability that we will have an infrastructure bill next summer.”
Congress is contemplating two very different stimulus packages over the next few weeks. House Democrats proposed a $3.5 trillion HEROES Act that includes $915 billion in direct aid for state and local governments, while Senate Republicans proposed a smaller $1 trillion relief package this week that does not include new funding for those municipalities.
No matter the outcome in the next two weeks of the relief bills, more infrastructure aid is needed, said Adie Tomer, a fellow at the Brookings Institution.
“People and businesses will still be suffering because the recession is far from over,” Tomer said during the webinar. “Work should not stop with this upcoming bill. So as Washington starts thinking about their next move, it’s clear that infrastructure should be a part of it.”
Tomer emphasized that recessions can shock infrastructure demand.
Panelists want the next infrastructure bill to allow issuers to plan programs with more certainty and align with goals such as focusing on climate change and reducing racial disparities.
After the 2009 recession, federal money was delivered through existing programs in the transportation space with a very short window to spend that money, said Rebecca Higgins, a senior policy advisor for the U.S. Senate Committee on Environment and Public Works.
“That’s what’s called the shovel-ready approach,” Higgins said. “It requires project sponsors to put money in projects that are ready to go, on the shelf or plan to go forward or that don’t need a lot of planning and design.”
Under the American Recovery and Reinvestment Act of 2009, some infrastructure funding went into current transportation formula programs, revolving loan funds and other existing programs, Brookings researchers wrote in a study released Wednesday. However, ARRA also included some innovative plans such as a national broadband plan and funded clean energy programs, they wrote.
The federal governments’ approach should be different this time around and there needs to be a recognition that the shovel-ready approach is flawed. Those short term extensions create tremendous uncertainty, Higgins said.
“When we think about a stimulus, we need a stimulus that will guide the recovery for the duration of the recovery,” Higgins said. “That means long-term certainty of the stimulus funding levels and a clear statement of policy goals that are new and time for project sponsors to plan and develop projects that are responsive to those goals.”
Investment in community infrastructure specifically will be important, and governments will need to focus on neighborhood disparities and racial inequality, Ross said.
“We have to tackle race head-on and some of that can be solved through looking at neighborhood disparities,” Ross said. “It’s going to be really critical that we work with community-based organizations that are trusted in communities that can reach hard to reach residents.”
Water and sanitation services remain out of reach to communities of color, lower-income people in rural communities and tribal communities. As of 2019, more than two million Americans lack access to running water, indoor plumbing or wastewater services, according to the U.S. Water Alliance.
In the past, infrastructure has been used as a way to divide communities and in a federal infrastructure stimulus, governments need to connect with those communities, Pagano said.
“If we’re going to have any kind of a highway, transit or transportation program, it has to be an inclusive one, not one that divides communities,” Pagano said.