AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19

Adie Tomer, Joseph Kane, and Lara Fishbane July 2020 Overview

Like most corners of American society, the Lower interest rates make borrowing cheaper COVID-19 pandemic has rattled the nation’s compared to recent years, reducing the upfront infrastructure. National driving levels dropped costs of generational projects. Infrastructure over 40% in April—the largest decline since World spending can also create immediate War II—while public transit continues to run with professional opportunities across a mix of few passengers. Internet data use is surging as design, construction, and operational jobs. The meetings, shopping, and social gatherings moved mix of short-term and long-term online. Safe water is an urgent concern and makes infrastructure an attractive electricity demand has been swinging wildly. area for federal stimulus.

But even if these behavior changes subside, Which leaves a core question for federal there is already a more sustained threat to U.S. policymakers: How can Congress design an infrastructure: a large-scale recession. The labor infrastructure stimulus that responds to today’s market is completely upended, with over 45 recession while still making forward-looking million workers making first-time unemployment ? claims between mid-March and mid-June. Household spending still hasn’t recovered, and At their core, the pandemic and its associated Black- and Latino- or Hispanic-owned small recession are stories of human suffering. This businesses have been hit especially hard. With means that any infrastructure stimulus program initial metropolitan data confirming a widespread must put people at the center. Congress should downturn, there is now little expectation for a fund policies that make essential services more quick, V-shaped recovery, despite some positive affordable, promote workforce development job reports. opportunities, and build projects with a more resilient, equitable future in mind. The benefit Such a swift economic contraction will be of a people-first strategy is it can stimulate overwhelming for governments and people. greater economic activity immediately while State and local governments have already cut ensuring benefits flow directly to households and infrastructure projects and related labor hours communities most in need. due to reduced sales and income tax revenue. These budgetary impacts will only grow if gas The country also should not simply replay the tax revenues stay below their targets, if transit 2009 stimulus. While the term “shovel-ready systems and airports remain half empty or worse, projects” still tends to lead conversations about and if unemployed workers stop paying their stimulus packages, few capital projects can move utility bills. For individuals, lost income starts a quickly enough to create substantial jobs or vicious cycle where some can no longer afford upgrade systems’ quality during a recession. Nor essential infrastructure services—whether it’s can the country afford to overlook environmental filling their car with gas or paying for in-home injustices that disproportionally impact our broadband—which only makes finding a new job most vulnerable communities. Instead, federal or getting to a grocery store that much harder. lawmakers should adopt policies that can immediately benefit disadvantaged households Amid these ominous trends, though, and create training programs that lead to durable can also offer valuable opportunities to improve career opportunities. infrastructure and expand economic opportunity.

AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 2 This brief uses historical data and the earliest groups by securing multiyear funding for indicators from the COVID-19 downturn to workforce development in the skilled trades make the case for a people-first approach to and, potentially, full-time wages for 3 million federal infrastructure stimulus. We specifically apprenticeships recommend that Congress: • Launch a Boost Program (and associated • Launch an ASCEND Program to promote Boost Card) to help cover the cost of essential long-run economic competitiveness by transportation, water, energy, and broadband launching four public competitions and four services for over 50 million households private research investment programs that modernize water infrastructure, accelerate • Pass a Keep America Moving grant program clean energy adoption, expand broadband to protect state-of-good-repair initiatives networks and skills development, and address and labor markets by expanding direct transportation and land use environmental grants to state and local governments injustices. with requirements to spend on short-term The total cost of these programs would range maintenance projects from $167 billion to $327 billion.

• Launch an InfraCorps Program to create and strengthen infrastructure career pathways for underrepresented and disadvantaged

AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 3 Recessions can shock infrastructure demand, but structural factors have a more enduring impact

The National Bureau of Economic Research only periods in which vehicle miles traveled (NBER) defines a recession as a “significant (VMT) fell were during recessions (Figure 1). This decline in economic activity spread across the was especially the case during the two energy economy, lasting more than a few months, crises of the 1970s and the in normally visible in real GDP, real income, 2007. Yet over six-plus decades, VMT kept rising employment, industrial production, and due to structural patterns that overwhelmingly wholesale-retail sales.” When looking at both reinforced driving habits: longer supply chains historic recessions and the current recession, demanding more freight activity, governments there is no question that reduced economic building more highways, and developers building activity translates into less infrastructure use. more automobile-oriented communities. Yet these impacts don’t last as long as structural changes, such as continued suburbanization, the Transit ridership demonstrates a similar shift from manufacturing to service occupations, distinction. National ridership dropped during and development of energy-efficient equipment. the 1990, 2001, and 2007 recessions (Figure 2). However, the largest sustained drop—which National driving habits exemplify this distinction. is still underway—started in 2014, during the From 1956 to 2020—corresponding with the longest economic expansionary period in U.S. construction of the U.S. highway system—the history. Prior to COVID-19, the chief concern

Figure 1. Annualied vehicle miles traveled (in billions) 19-19

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AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 4 Figure 2. Annualied public transportation ridership (in thousands) 199-19

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among transit professionals was investigating While structural changes keep pushing up what structural issues caused this drop-off—not most transportation usage, the pattern works temporary impacts from past recessions. in reverse for the energy and water sectors. The threat of climate change, potential for The same core pattern appears within intercity technological innovation, and changing consumer transportation. Commercial air travel dips during tastes all push toward greater efficiency and recessions, but long-run passenger levels keep sustainability across both sectors. This has growing as -adjusted ticket prices fall resulted in 14% less electricity generation and the global economy continues to demand between 2001 and 2019, while total water use in more face-to-face interactions. In fact, the longest 2015 was lower than 1970 levels. While recessions period of sustained passenger drops after 9/11 have the potential to temporarily decrease had less to do with the 2001 recession than with demand within these two sectors—through security fears. Amtrak ridership—which began diminished industrial production and household a steady period of growth around 2000—also consumption in certain cases—the impacts are changed less due to economic cycles and more still fleeting relative to long-run trends, given because of improved performance, corridor the essential nature of energy and water use for investments, and changing consumer tastes. households and businesses.

Freight activity has seen a similar trend (Figure So where does the 2020 recession fit within this 3). Though freight activity did fall during the past historical context? two recessions, there is a long-term upward trend over the past two decades. Unlike other recessions since the 1950s, COVID-19 shocked multiple infrastructure systems all at

AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 5 Figure 3. Transportation Services Inde, freight and ross Domestic Product (in billions of dollars) - A

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once, and at an unusual scale. People stopped in mind, policymakers should design any making local and long-distance trips at historic infrastructure stimulus based on structural rates. Empty office buildings meant water utilities patterns, not temporary deviations. lost billions of dollars from anchor customers. Overall electricity demand is down and the daily The exception is telework and the rapid rise in load curve is fluctuating. Broadband demand digital connectivity. With so many companies, surged as school, work, and socializing moved nonprofits, and governments effectively forced to online. experiment with telework, early surveys confirm that workers and management like the new setup. Yet there is already evidence that these trends A shift to more permanent telework policies will reverse when the economy can open at scale. could impact local demand for commercial and Local travel rose when some cities and states residential properties, launch new metropolitan reopened. Broadband usage peaked in April and competitions for industry and talent, and trended down through June, likely reflecting a accelerate calls for universal broadband. Less mixed resumption of in-person activity and some demand for face-to-face meetings or conferences level of “Zoom fatigue.” Continued reopenings would hurt the aviation industry, while more will allow water and electricity demand to tick workers staying at home could accelerate up. After early fears, emerging data is showing e-commerce’s growing share of retail sales. that transit is less likely to heighten COVID-19 It’s vital that policymakers begin planning for exposure than other travel modes, which should scenarios in which significant chunks of the help transit agencies rebound even as they workforce stop commuting, while other trips— continue to address lingering apprehension such as a doctor’s appointment—similarly shift to around social distancing. With these factors remote alternatives.

AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 6 Recessions amplify infrastructure’s affordability issues

Infrastructure is essential to everyday life, but Recessions amplify the economic injustices built it’s not always affordable to use. As economists into current infrastructure pricing. Combined with point out, infrastructure services such as water an increasing number of furloughs and layoffs, and electricity are necessities, and demand is infrastructure bills can hit many lower-income relatively inelastic, with consumers being less households harder during recessions. It’s no sensitive to changes in price. Infrastructure wonder that electricity and water shutoffs spike tends to be more expensive for lower-income during economic downturns, or that auto loan households than higher-earning ones, with delinquencies rise. These struggles come even the lowest quintile of household earners as the providers of these services—especially spending over 50% of their post-tax income public infrastructure owners and operators such on transportation and other utilities (Figure 4). as transit agencies and water utilities—strive Housing costs push those 25 million households to better measure and address affordability into the red each month. Research also regularly concerns. shows that the price of transportation and broadband are major barriers to use.

Figure . Household spending on infrastructure services

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AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 7 The result can be a self-perpetuating cycle of The scale of the infrastructure affordability issue economic disconnection. Workers who are laid off could be especially overwhelming during the and then lose their vehicles may have no means COVID-19 recession. The U.S. Census Bureau’s to either interview for a job or report to the one Household Pulse Survey through July 14, 2020 they may get hired for. A family that loses water found that 50% of respondents experienced service may be forced to resort to pricier bottled income losses since March 13, 2020. The water or face health concerns. A lost broadband likelihood was even higher among those making connection can disengage students and job less than $50,000 per year and with less than seekers. Infrastructure has always been essential, a bachelor’s degree. To assist those in need, but cutoffs and service losses make it painfully policymakers should make affordability a chief obvious. structural concern.

AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 8 Recessions will lead to project delays and layoffs

While recessions may influence infrastructure Historically, financial markets alone cannot usage only for a short period, loss of economic solve for revenue shortfalls. One lesson from activity delivers a more sustained impact to the Great Recession was that new or refinanced project timelines and infrastructure employment. debt can help localities, but not enough to fully Recessions always create shortfalls in state compensate for tax revenue losses. In the worst and local governments’ general tax revenues scenarios, like the , cities and (including sales, income, or property taxes), states with the highest levels of existing debt which localities and states rely on to plan and relative to their economic output could actually fund their annual budgets. Since state and local default. governments cannot run deficits due to requirements, revenue shortfalls will All types of infrastructure projects can be immediately impact their budgets, especially vulnerable during fiscal shortfalls. While state the local governments who are most reliant transportation agencies rely heavily on motor on income and sales taxes. The same overall vehicle fuel taxes and other dedicated user fees, trend applies to public authorities such as water most local governments use the same general tax utilities and airports, or private entities that own revenues to fund their transportation budgets as energy utilities and broadband networks. They they do other critical services such as education, each face shortfalls due to lost user fees. housing programs, and protective services. As a

Figure . State and local spending on transportation and water infrastructure, 196-217 I 1

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AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 9 result, it’s easy to delay transportation projects Of course, the easiest way to keep projects to reserve funding for other annual operations. going and provide greater certainty for all Water utilities, airports, and other peers can infrastructure owners is direct cash assistance or make the same choice to delay long-run capital cheap loans. This was the case when the CARES projects. Telecommunications and energy Act provided airports, airlines, transit agencies, companies may prefer to keep cash on hand and and state and local governments hundreds of delay projects the same way. billions of dollars in new direct funding. Flexible support also came from the Once projects are delayed, it can lead to years when it opened a new Municipal Liquidity Facility of lower spending. State and local governments to purchase short-term securities from states, slowed spending on transportation and water local governments of areas with populations capital projects for multiple years following over 250,000, and public authorities, in order to the 1970s recessions and the Great Recession help cover revenue shortfalls (they’ve recently (Figure 5). Overall public construction spending expanded this program to cover smaller localities, within infrastructure sectors also fell for multiple too). These efforts can boost funding and years following the Great Recession. The Census offer more flexible lending to cover immediate Bureau found similar trends dating back to budgetary needs. 1993 for private spending in the energy and communications sectors, although it’s important Still, industry representatives and outside to note those sectors also conduct investment experts continue to make the case for the federal cycles based on technological innovations such as government to invest even more money in order new wireless standards. to avoid catastrophic service cuts. Timothy J. Bartik at the W. E. Upjohn Institute believes state Project delays don’t happen in a vacuum. Less and local government shortfalls could reach spending spills into the infrastructure labor $899 billion, and Elizabeth McNichol and Michael market; as public infrastructure owners and Leachman at the Center on Budget and Policy operators struggle to plan and pay for projects, Priorities estimate a $555 billion shortfall—both private contractors may not provide as many far more than the $150 billion provided through services, execute as much construction, or the CARES Act and in line with the budgetary and hire as many workers compared to typical employment concerns raised by local government schedules. Nor are these job losses confined to associations. State transportation and national general construction jobs; millions of plumbers, transit associations also continue to ask for more electricians, engineers, and other skilled direct assistance to defray project and service trades all work on infrastructure projects, cuts. These demands are early confirmations including needed maintenance and repair. While of the impact that federal stimulus can have. governments may not formally delay projects Policymakers should feel confident that targeted until they pass a budget, once project delays stimulus can accelerate projects and create begin, it’s a certainty that workers will lose workforce opportunities in the process. labor hours. Still, the transferable skillsets and experience these workers possess could readily translate into opportunities in a stimulus effort, and there remains an ongoing need to train new workers in the skilled trades.

AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 10 Federal infrastructure stimulus does not need to rely on traditional programming

For nearly 100 years, Congress has seen transportation bill even included a five-cent infrastructure spending as a way to stimulate hike in the gas tax—equal to a 120% increase— during downturns. The New which Congress and President Reagan justified Deal was the first major example, which included as a long-term investment that would create an array of capital projects, from the massive immediate job opportunities. President George Hoover Dam to scattered rural electrification H.W. Bush was even more animated; he famously efforts. The New Deal still represents the largest declared the 1991 transportation bill was about annual infrastructure spending in the country’s “jobs, jobs, jobs” during the ceremonial signing. history, measured by spending as a share of GDP. Those programs employed 8.5 million workers But comparing the New Deal to the 1982 and in the Works Progress Administration and an 1991 transportation bills demonstrates two additional 3 million younger workers in the competing approaches to spending. The New Civilian Conservation Corps, while fostering the Deal used massive spending to fund entirely new development of new skills and launching good- categories of forward-looking projects: delivering paying careers across the country. clean water, electricity, and telephone service to people for the first time; demonstrating mega- The Ronald Reagan and George H.W. Bush project capabilities such as New York City’s administrations both positioned transportation Lincoln Tunnel; and reinvigorating the civic bills as important job programs. The 1982 commons through projects such as San Antonio’s

Figure 6. Federal infrastructure spending, as a share of DP 19-19

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AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 11 River Walk and Charleston, S.C.’s Dock Street to bridging the digital divide and delivering true Theatre. By contrast, the transportation bills high-speed internet service. Funding toward clean mostly focused on building highways and transit energy programs used renewable generation, lines via traditional programming (although the weatherization, and even new financing models 1991 bill did empower metropolitan and local to invest in long-term sustainability. governments to make more project decisions). Just as importantly, workforce development The COVID-19 recession presents a chance to programming was central to the New Deal, learn from these past stimulus programs. So far, while the transportation bills take as a given service workers—including many women—have that more spending creates more employment borne the brunt of 2020’s initial job losses, which opportunities. is a major contrast from the Great Recession’s male-dominated layoffs in construction-related The 2009 stimulus—the American Recovery occupations. The shift to telework and distance and Reinvestment Act (ARRA)—used a hybrid learning only raises the urgency to prepare all approach. Some infrastructure funding went people for a digital future. Climate insecurity right into current transportation formula has grown since 2009, and lessons from fiscally programs, water-related revolving loan funds, challenged Flint, Mich. and flood-ravaged Houston airport grants, and other preexisting programs. are still fresh. Advances in mobility technologies Funding those established programs actually and electric vehicles promise new approaches to accelerated spending, which Shoshana Lew and transportation. Policymakers should recognize John D. Porcari documented. But ARRA also stimulus funds are a distinct opportunity to launched the National Broadband Plan and the launch workforce development programs and innovative Broadband Technology Opportunities innovative capital programs. Program, both of which inspired new approaches

AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 12 A COVID-19 stimulus package

Macroeconomic indicators—from aggregate can launch a coordinated program to address consumer spending to durable goods orders to this barrier to opportunity, which will treat permanent job losses—all point toward a deep, infrastructure as a basic human right. The sustained COVID-19-fueled recession. As the program should support a basket of goods that economic impacts worsen, federal leaders are reflects modern needs. We recommend: searching for ways to stimulate an enduring • Households receive a fluid, monthly budget economic recovery. Yet with so many obvious to cover transportation, broadband, and economic challenges—from supporting the basic utilities as the recipient sees fit. Eligible unemployed to protecting essential workers— travel expenses would include either transit infrastructure supporters must make a passes or ride-share trips, with an exception compelling case. for gasoline and automobile insurance in neighborhoods without alternatives. Eligible Passing an infrastructure stimulus will require utility expenses would include water, in-home more than traditional calls for increased spending energy, telephone, and wireline and wireless or legislation designed for a different economic broadband service. All benefits would scale moment. Federal leaders will need to promote based on household size, employment status, infrastructure policies that directly respond to and regional cost-of-living adjustments. An today’s damaged economy and recognize where independent commission of experts would the country must go once the worst is behind us. annually review benefit levels and be subject There are two immediate concerns. One is to to congressional oversight. support households who either experienced income loss or entered the recession already • All benefits would be tied to household tax facing economic disadvantage. The other is to information and delivered via the same protect current infrastructure workers whose jobs Electronic Benefits Transfer card—and may be under threat from state and local budget operational system—used for the Supplemental cuts. Nutrition Assistance Program (SNAP). The new single card could be named a Boost Card. A stimulus can also address the country’s long- By pairing infrastructure assistance with run needs, charting a new path for infrastructure existing programs, the administrative costs policy for decades to come. A lack of interest would be lower, and eligible households would and diversity in the skilled trades, outdated have fewer channels to navigate. Benefits water and energy systems, persistent digital would phase out based on household income, divides, and inequitable land use all limit national which would also be reviewed by the above competitiveness. commission.

We recommend Congress build a stimulus that • States would administer the program, and will deliver immediate and long-lasting benefits, federal policy would permit states and using the clear lessons from past programs. The localities to supplement national standards. stimulus should include four core programs: For example, King County, Wash. could use its ORCA LIFT reduced fare program to further Boost Program: Deliver direct household aid supplement local transit benefits. Similarly, to help people pay for essential transportation, states should also be permitted to negotiate water, energy, and broadband services. Federal, with private companies who may be willing to state, and local policies inconsistently measure offer discounted transportation, broadband, or and address infrastructure affordability, both by energy services. infrastructure sector and geography. Congress

AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 13 • To promote administrative efficiency, a central cover the current operational workforce if administrative unit should look to integrate individuals were employed as of March 1, new transportation and water assistance 2020. The program should not include other alongside existing parallel efforts, such as the public capital stock such as schools and Low Income Home Energy Assistance Program administrative buildings. (LIHEAP) and the Lifeline program. The initial program launch should focus on the lowest- • Congress should develop a formula to scale income households and those experiencing grants based on state and local fiscal need, recent income losses, using initial reporting which must be more formally defined and data to inform a more durable, long-term measured. The federal program should not program. penalize places for having greater income security (such as larger “rainy day” funds), • Cost estimate: Using the Consumer but Congress should provide extra benefits to Expenditure Survey, we can see average places with greater economic disadvantage spending by household income quintile for all heading into recession, including conditions utilities, telecommunications, gasoline, and such as lower household income and less transit expenses. It would cost the federal resilient revenue sources. government between $80 billion and $90 billion per year to create a $160 monthly • The Treasury Department would deliver budget for the lowest-earning quintile (equal funding directly to state and local to over 50% of all expenses) and a $100 governments’ general funds—not through monthly budget for the second-lowest quintile current federal infrastructure programs or (equal to under 25% of all expenses). Those to specific agency accounts at the state and benefits would reach a total of 53 million local level. However, states and localities must households, ensuring scaled benefits would continue their ongoing maintenance projects reach households with the lowest incomes and not simply substitute federal funding for before the recession and those experiencing these efforts. relative income losses since March. • Treasury would be responsible for spending Keep America Moving Program: Provide direct enforcement, working with federal grants to protect infrastructure state-of-good- bureaucratic colleagues where appropriate repair and the current infrastructure workforce. and reporting results to Congress. These As Congress considers more direct support results would be available online and to state and local governments (including transparent to the public. independent authorities), a portion of that funding should be dedicated to infrastructure maintenance projects. Prioritizing maintenance • Cost estimate: State and local governments will ensure infrastructure quality does not spent $342 billion on all transportation and degrade, which only leads to higher long-term water infrastructure in 2017, which includes all costs. Increased funding will also eliminate capital, operation, and maintenance expenses. many budget cuts, which will keep infrastructure The CARES Act already supplemented some workers employed. We recommend: of the emerging funding gap, including the $150 billion relief fund for state and local • Eligible expenses include any maintenance governments (which can apply to various projects that improve a publicly owned expenses) and $35 billion directly to transit fixed asset, including transportation, water, agencies and airport owners. Awarding an energy, and broadband infrastructure. additional $50 billion to $100 billion for one Maintenance would focus on repairing existing year to state and local infrastructure agencies capital assets—not on large expansions or would provide a significant cushion against replacement projects. Grants could also

AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 14 continued revenue losses. An additional The new federal program would expand infusion could take place if the recession beyond existing efforts such as AmeriCorps persisted and revenues still did not reach and the Corps Network to capture a broader expected targets. range of underrepresented, disadvantaged, and disconnected workers, including the out- InfraCorps Program: Launch a multiyear of-work. program to develop a diverse workforce in the skilled trades. The ultimate depths of the • Congress would fund a new program within COVID-19 recession are still unknown, but the the Department of Labor focused on labor market impacts are already serious and future-looking skilled trade careers. This demand action. As Congress looks to support program would receive additional guidance small businesses and other affected industries, and technical support from other experts there is an opportunity to hire, train, and and federal agencies, including (but not retain talent in the skilled trades. Working in exclusive to) the Department of Education, collaboration with the Department of Labor, the Department of Transportation, the federal policymakers should establish a new, Environmental Protection Agency, and the 21st century infrastructure workforce program Department of Energy. aimed at providing flexible learning and career opportunities in the skilled trades, especially • The program would make grants to and for underrepresented, disadvantaged, and coordinate with state and local workforce disconnected workers. development entities, including workforce • Programming would focus on specificwork- agencies, workforce development boards, based learning opportunities—including educational institutions, and infrastructure apprenticeships and pre-apprenticeships—that employers. These state and local bodies would help build the skills and competencies would help identify potential applicants and for a new generation of skilled trades workers. participating employers, design targeted

AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 15 curricula and training, and administer and complementary capital spending programs to monitor program development. modernize water infrastructure, accelerate clean energy adoption, expand broadband networks • The program would aim to prioritize training and digital skills development, and eliminate opportunities in positions with high growth environmental injustices in transportation and potential and/or replacement needs, including land use. Investment in the future is a constant those in the clean energy economy. This could process. The country’s legacy frameworks include new jobs and apprenticeships, but also responded to the challenges of a given time— additional support for existing jobs that may issues such as connecting cities across state not currently receive as much funding or those lines, delivering telephone and cable service, and that have a limited talent pipeline relative stopping sewage dumping. Today’s challenges to expected retirements. For example, the reflect a different world, one where climate program would look at existing project hiring insecurity is a rising threat, digital connectivity channels—among local and state agencies, is far from ubiquitous, and income inequality construction contractors, and other actors—to fractures along racial and other demographic direct more funding toward hiring for projects lines. that utilize cleaner technologies and more environmentally resilient designs. To simultaneously address these three long-run threats to U.S. competitiveness, we recommend Congress pass a new ASCEND Program, which • Cost estimate: Through the annual budget, stands for Affordable, Sustainable, Career- Congress currently spends about $3.5 billion Engaged, Dynamic. The program would orient on a range of employment and training around four core infrastructure goals: activities within the Department of Labor, including YouthBuild, apprenticeships, and • Modernize water infrastructure: For decades, Workforce Innovation and Opportunity Act drinking water, wastewater, and stormwater (WIOA) programs focused on adults, youth, systems have aged and struggled to provide and dislocated workers. An additional $1.7 safe, clean, and reliable service. Congress billion is spent on Job Corps, which includes can reverse these trends and provide greater vocational training for younger workers. certainty for utilities balancing a variety of investment, affordability, and management – Spending an additional $5 billion per year concerns. Offering greater funding flexibility to support infrastructure career pathways and support for new technologies and green could effectively double current federal infrastructure designs would help, as would funding in related workforce development establishing new funding and financing programs, with the potential to build platforms to boost resilient infrastructure capacity for new efforts with other agencies. investment. Critical to these efforts, too, is the Environmental Protection Agency’s need to redefine and measure water affordability. – An infusion of $100 billion per year would rival inflation-adjusted spending for New Deal-era workforce development programs. • Accelerate clean energy adoption: Climate This total would provide full-time wages insecurity is already damaging the U.S. (at $15 per hour) for 3 million workers—the economy, from more frequent natural projected number of infrastructure workers disasters to property losses along coastal who will retire or need to be replaced over shorelines to higher asthma rates near major the next decade. transportation facilities. Transitioning to cleaner energy sources and lowering overall ASCEND (Affordable, Sustainable, Career- energy consumption can reduce financial Engaged, Dynamic) Program: Launch four costs, support healthier communities, and

AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 16 create new business opportunities in the can win grants, Congress can inspire a wealth process. Building weatherization, electric of new ideas. Even if they fail to win the vehicle infrastructure, and a modernized grants, many governments may execute their energy grid—all part of the unpassed Moving plans anyway. Consolidating all applicant Forward Act—are the kind of programs materials also gives the federal government a Congress should consider. database of future policy ideas (not dissimilar from Amazon’s HQ2 effort). Each competition • Expand broadband networks and digital skills and funding pool would be administered by development: While the digital divide has been a relevant federal agency (e.g., EPA, DOE, evident for decades, the COVID-19 pandemic Commerce, or DOT). makes it impossible to ignore. The government must address the broadband marketplace’s – Cost estimate: Congress could designate $5 core failures: It has been unable to bring billion challenge grants in each of the four networks to neighborhoods without service, categories, for a $20 billion total budget. make service and devices affordable for all, Each challenge grant would slightly exceed or provide skills training for those in need. Race to the Top’s nominal funding. Congress can choose from the range of ideas championed by House Democrats, former FCC • Research and development investments: The Chairman Tom Wheeler, and others. U.S. economy must innovate to solve these generational challenges, which inherently • Eliminate environmental injustices in requires risk-taking and frequent failures. transportation and land use: Continued low- To promote a culture of experimentation, density development along metropolitan Congress should create a funding pool fringes exacerbates spatial mismatch, available to private sector firms. Winning demands more infrastructure per capita, and is firms would receive an infusion of federal a platform for income and racial segregation. funding in exchange for stock that the federal Future federal land use policies should make government would own. This program will better use of neighborhoods already built, accelerate risk-taking and ensure the public especially those designed for proximity. That sector can benefit from profitable inventions. means experimenting with land value taxes, The Treasury Department should work in multimodal road designs, and impact fees. consultation with agencies’ technical experts There is a grand opportunity to experiment to administer each program. Congress should with policies that manage at the work with Treasury to design transparent, metropolitan scale while still being driven by upfront terms related to how long the federal genuine community input. government should hold stock and conditions around any stock sales or firm bankruptcy. These efforts will take a generation or more to accomplish. Stimulus programs cannot reach – Cost estimate: Congress could designate those goals on their own, but they can offer an $3 billion for investment in each of the four invaluable opportunity to experiment across the categories, for a $12 billion total budget. country and inform longer-term policies. Within each of the four output categories above, we The total cost of these programs would range recommend Congress launch two program types: from $167 billion to $327 billion. Congress • Challenge grants: Learning from the Smart could dedicate funding through tax increases, City Challenge and Race to the Top programs, but that could dull the stimulus. Instead, we challenge grants use a proverbial carrot to recommend the federal government borrow or inspire major planning efforts at the state and consider other revenue sources to cover program local level. By dedicating a large enough pool costs. of funding and ensuring multiple applicants

AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 17 Conclusion

The COVID-19 pandemic has shaken the nation to Still, it is the underlying structural factors—how its core, and the ensuing economic contraction we design our communities, the technologies we shows no signs of letting up. As in past deploy, and the projects we fund—that continue recessions, infrastructure is not insulated from to shape our long-term economic trajectory. these effects—household affordability concerns Infrastructure can act as an economic barrier to are rising, strained state and local budgets many people and places, but it can also function are delaying projects, and workforce impacts as an economic foundation. An infrastructure in construction and other industries are just stimulus offers real potential, but to maximize beginning to take shape. that potential, it must build greater economic opportunity for more people and places. This brief has outlined several pathways for consideration—it is time for action.

AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 18 About the Metropolitan Policy Program at Brookings

The Metropolitan Policy Program at Brookings delivers research and solutions to help metropolitan leaders build an advanced economy that works for all.

To learn more, visit www.brookings.edu/metro.

For More Information

Adie Tomer Fellow Metropolitan Policy Program at Brookings [email protected]

Joseph Kane Senior Research Associate and Associate Fellow Metropolitan Policy Program at Brookings [email protected]

AN INFRASTRUCTURE STIMULUS PLAN FOR THE COVID-19 RECESSION 19 1775 Massachusetts Avenue, NW Washington, D.C. 20036-2188 telephone 202.797.6139 fax 202.797.2965 www.brookings.edu/metro

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