The historic bipartisan Infrastructure Investment and Jobs Act (IIJA) authorized the funding of $1.2 trillion federal aid for the construction and rehabilitation of the country’s transportation network, broadband infrastructure, electrical grid, and clean water facilities. The aid is divided and set for new programs, with $550 billion funding, and continuation of core programs under the 2015 Fixing America’s Surface Transportation (FAST) Act, with $650 billion funding.
While the new law will be implemented in the next ten years, majority of the funding will be allocated in the first five years. This article includes a list of these fund allocations that have been identified as drivers of economic growth.
In fact, according to US business strategy giant, McKinsey and Company, the IIJA will address a wide range of the country’s infrastructure needs. It’ll modernize and upgrade the aging transportation network. More importantly, it will provide clean water, electricity, internet access, and transportation infrastructure to disadvantaged communities. All of this will build a more sustainable, inclusive economy.
Key Benefits of the New Infrastructure Law
The IIJA will provide significant federal investment in public works, transportation networks, and utility projects such as water, electricity, and internet access. However, McKinsey and Company has provided a summarized list of benefits that the IIJA will provide for stakeholders.
One, the $550 funding for new projects will be distributed for the next five years. It is divided into two main improvement endeavors. First, $266 billion is set for core infrastructure. Two, $284 billion is set for surface transportation network. These two improvement endeavors are the priority investments of the new law.
Two, the priority investments aim to tackle issues with the country’s transportation and core infrastructure. Transportation’s exhaustive list include roads, bridges, airports, railways, ports, waterways, and public transit. It will also include projects in developing electric vehicles, improving passenger and pedestrian safety, and reconnecting communities through roadways.
Core infrastructure projects on the other hand, include improvement of the water, broadband, and power grid infrastructure. It will also tackle environmental remediation and resiliency.
Three, the new IIJA will expand agency budgets, with a large portion of the funding going to the Department of Transportation (DOT). Through the DOT and other federal agencies, funds will be made available by means of the Highway Trust Fund, loans, agency programs, competitive grants, and formula-calculated grants.
Finally, each state will be funded, through formula-calculated grants, to rehabilitate their highway infrastructure. This will improve transportation through different states and reconnect communities.
Allocation of Funding for New Programs for the First 5 Years
What exactly are the programs and projects that the $550 billion fund for new spending will go to? According to the National Association of Counties (NACO), the majority will go to the following, which are enumerated in descending order:
For the construction of new, replacement, and repair of roads and bridges, the IIJA has allocated the biggest share of $110 billion. It also includes investment in infrastructure technology, which will help encourage development of advanced digital construction management systems.
Software development companies or software solutions providers, with the help of their software patent attorney to protect their work, can develop software and applications for the construction industry. This
will further help modernize the country’s infrastructure.
Funding for roads and bridges is followed by a $66 billion allocation for the improvement of passenger and freight railways. With this funding, the national Amtrak Network will be significantly enhanced. This will help repair the Northeast Corridor that was ravaged by Hurricane Sandy in 2015.
Both the power grid and broadband infrastructures were allocated with $65 billion each. Funding for power will go into the creation of the Grid Deployment Authority. It will also make the country’s power grid resilient and reliable. The fund will also help support investments in key technologies, supply chain, and minerals for clean energy.
Funding for broadband on the other hand, will provide affordable internet access for low-income families. It will also improve broadband connectivity in the country.
For water infrastructure, the IIJA allotted $55 billion in funding. For cybersecurity and environmental resiliency efforts, $47.2 billion was allocated. This is followed with $39.3 billion for repair, improvement, and expansion of the country’s public transit. Improvement of airports, including air traffic control, was allocated with $25 billion in funds. Ports and waterways got a $16.6 billion funding.
For addressing legacy pollution, improving public health and creating jobs, the IIJA set a $21 billion fund. Safety in highways and of pedestrians were provided with an $11 billion funding.
Other provisions that got less than $9 billion in funding include improvement of western (states) water infrastructure ($8.3 billion), clean energy school buses ($7.5 billion), electric vehicle charging infrastructure ($7.5 billion), and $1 billion for reconnecting communities through community facilities.
The IIJA will bring much-awaited improvement to the country’s aging infrastructure and this will create new jobs, provide better opportunities for low-income families, which in turn will positively affect the country’s economy.