di A. Altieri D’Angelo
The Oxford Dictionary defines infrastructure as the basic physical and organizational structures and facilities (buildings, roads, power supplies) needed for the operation of a society or enterprise. As simple and straightforward as it is, this definition has become a significant and contentious point between the Republican Party and the President. This issue arises because President Biden’s proposed American Jobs Plan (referred to as the Plan) uses an expanded definition of infrastructure to justify many projects that go well beyond buildings, roads, power supplies, etc. Republicans disagree and insist that the traditional definition be used as a basis for the Plan. The Republicans also object to the Plan’s cost-@$ 2.25 Trillion; and that such expenditures will require tax increases on corporations and taxpayers earning more than $400,000 per year.
The Plan has four major investment themes: transportation infrastructure ($620 Billion), quality of life at home ($650B), caregivers for the elderly and people with disabilities ($400B), and research, development, and manufacturing ($580B). The transportation portion covers traditional infrastructure projects (buildings, roads, power supplies)and also includes, in part, investments in electric vehicles (EV) and the creation of 500,000 EV charging stations. The quality-of-life portion will invest in 14 separate projects, including retrofitting housing, building affordable housing, expand high-speed broadband and upgrading schools, modernizing drinking water, storm, and wastewater systems. Caregivers will see an expansion of affordable housing and community-based services for the elderly and pay increases. R&D funding will invest in 13 projects; the keys areas are manufacturing, climate research, worker training, and pure research.
President Biden believes that traditional infrastructure spending is inadequate to meet the demands of the 21st century. He argues the U.S. must adopt a holistic approach to investing if the objective is to have the U.S. remain competitive in all current and future strategic areas. He is advocating investing in human capital (HC). His thesis is that without enhancing the productive capacity of the U.S. population, traditional infrastructure spending will not increase America’s competitiveness. Investments in HC and conventional infrastructure funding will lead to more significant innovation and prosperity, not to mention eliminating a substantial level of income inequality. The U.S., therefore, must invest in its people by funding programs that enhance their knowledge, skills, and competencies as well as providing the means for people to go work by supporting families (mainly women) through job training, daycare, housing subsidies, etc. Such investment (in theory) will make the country more competitive, safer, and its people will enjoy a higher quality of life.
One can find an indication of the challenge facing the U.S. in a 2020 World Bank Group Report-Human Capital Index-2020 Update (HCI). The HCI ranges from 0 to 1, so an HCI value of, for instance, 0.5 implies that a child born today will only be half as productive as a future worker as would be if he/she enjoyed complete education and full health. The U.S. and China had .70 and .65 ratings, respectively. Numerically there is a slight difference between the U.S. and China. However, when the size of China’s population and its current state of development is taken into account, a .05 difference will disappear and could begin to reverse. The U.S. will need to move up in the ratings if it hopes to remain competitive. The Plan could offer a pathway to achieving that goal.
President Biden and several cabinet members will travel across the country to speak to mayors, governors, and voters about the Plan. They will strive to build local support among all voters, particularly Republicans, hoping the people will pressure their elected representatives to vote for the Plan. They will need to defend against Republican claims that HC investing is merely social spending dressed up as an investment in infrastructure. (Conservatives will also assert that HC funding is a Democratic ploy to implement a Leftist agenda and that the Plan’s cost will increase the national debt despite raising taxes.)
The President and his team will also need to convince voters that times have changed, and HC investing must be considered a core part of future 21st-century infrastructure funding. They must persuade the people that federal financing of elder care, job training, and other quality of life projects will enable them to become more productive and prosperous. And that such investments will allow the U.S. to be more competitive and robust.
In the end, the electorate will need to decide which definition of infrastructure should be used and will make their views known to Senate Republicans.