The U.S. Senate Committee on Banking, Housing, and Urban Affairs convened Wednesday to explore the economic impacts of recent federal infrastructure spending packages, including the Infrastructure Investment and Jobs Act (IIJA), Inflation Reduction Act (IRA), and CHIPS and Science Act. The subsequent conversation was unstructured and brief with only six of the committee’s 23 members attending. Still, several themes emerged. All senators except Tim Scott (R-SC)  praised the legislation’s impact on local projects in their states. Several senators also expressed concerns that cost inflation in the construction sector has diluted the IIJA’s impact. The following witnesses provided expert testimony: 

• The Honorable Christopher Coes, Acting Under Secretary of Transportation For Policy, Department of Transportation 

• Mr. Michael Knisley, Executive Secretary-Treasurer, Ohio State Building and Construction Trades Council (OSBCTC) 

• Dr. R. Richard Geddes, Founding Director, Cornell University Program in Infrastructure Policy 

Broad (But Not Universal) Support for Infrastructure Funding 

The witnesses and most attending senators appeared united in their praise for recent federal infrastructure spending packages. Chairman Sherrod Brown (D-OH) boasted that 60,000 IIJA-supported projects are already underway nationwide, including highway reconstructions, bridge repairs, and transit upgrades. “Every state is benefitting,” he exclaimed. Witness Michael Knisley, who supports construction projects built by OSBCTC’s construction trade unions, provided a local perspective, stating, “In our nearly 60 years as a building trades council, there’s never been a brighter future for the tradespeople who build Ohio.”  

Multiple witnesses agreed that though recent infrastructure investment is historic, several policy changes could increase its benefits. Dr. Geddes argued that persistent inflation, when coupled with delayed project timelines and lengthy federal review processes, greatly increases project planning and construction costs. By streamlining the National Environmental Policy Act (NEPA) approval process and providing for greater private partner participation in project delivery, “infrastructure projects can deliver long-term benefits and returns for all parties.”  

Senator Scott went further, arguing that the implementation of these acts themselves has driven inflation. He contended, “IIJA and the CHIPS Act… only helped impact the average inflation that the average American has been experiencing.” When Scott asked Dr. Geddes about his theory, Dr. Geddes responded skeptically, describing the difficulty of establishing a cause-and-effect relationship between infrastructure spending and inflation. He responded, “It’s difficult to tease out the effects of a particular program on the overall inflation rate.” To my knowledge, no scholarship yet exists that establishes a causal link between infrastructure spending and inflation. However, notably, a 2022 open letter cosigned by 17 Nobel Laureates in economic science suggested that the Biden Administration’s infrastructure bills could actually “ease longer-term inflationary pressures” by investing in the ability of Americans to contribute productively to the U.S. economy. Undeterred, Mr. Scott maintained his position. He insinuated that supposed inflationary effects are reason why the federal government should not provide substantial infrastructure funding in general.   

Senators Get Nitty Gritty 

Most attending senators discussed federal infrastructure funding in relation to projects or efforts in their home states. Below is a brief overview of some of these conversations. 

• Sen. Tina Smith (D-MN) described the importance of transit service to rural communities in Minnesota. She applauded the support of the Department of Transportation (DOT) for efforts to improve rural transit service, particularly through its Formula Grants for Rural Areas program.  
• Sen. Chris Van Hollen (D-MD) discussed Maryland’s Red Line light rail project, which would provide a high-speed east-west transit connection through Baltimore. Given that the project has restarted after former Governor Larry Hogan cancelled it in 2015, Mr. Van Hollen asked Mr. Coes how the Maryland Transit Administration can streamline the project’s federal rating process.  
• Sen. Kevin Cramer (R-ND) asked Mr. Coes about Fargo, North Dakota’s eligibility for DOT formula funds. Citing conversation with Fargo’s mayor, Mr. Cramer explained that the city has found it more challenging to identify grants for which it is eligibility as its population continues to grow beyond that of a large town.  
• Chairman Brown raised his home state’s Lake Erie Connect initiative as an example of the DOT’s efforts to reconnect disadvantaged communities divided by highways, rail lines, and other past transportation harms.  

Chairman Brown closed the hearing with tempered optimism: “We have much more to do in the years ahead.”