New administration’s impact on infrastructure spending to be determined
As I write this, the new Trump administration is still in its first 30 days and is making big changes. Putting aside our relations with the European Union and the unfolding discussions with Russia to end the war in Ukraine, all the eyes in our industry are focused on how the administration will handle America’s commitment to infrastructure spending, which has an immediate impact on the precast industry.
It is therefore instructive to look at the current state of the infrastructure portion of our economy. As has been reported in the popular business press, through four landmark laws — the American Rescue Plan Act (ARPA), the Infrastructure Investment and Jobs Act (IIJA), the CHIPS and Science Act, and the Inflation Reduction Act (IRA) — the federal government has already begun to invest more than $4 trillion in America’s communities, families and businesses.
These laws were designed to address multiple national priorities: accelerating recovery from the COVID-19 pandemic, investing in our nation’s aging and long-starved infrastructure, supporting advanced domestic manufacturing and accelerating the transition to cleaner energy.
Adjusted for inflation and considered relative to the size of the U.S. economy, the investments of the past four years are roughly comparable in scope and significance to those of the New Deal and Great Society eras in the 1930s and 1960s, respectively, and in some dimensions, such as physical infrastructure investment, even larger. Now, as President Donald Trump launches his agenda and the new Congress gets to work, the federal policy environment has changed dramatically and rapidly. We must be alert to efforts around these changes, whether they seek to expand on prior efforts or dismantle them.
The reality is that the implementation of these major investments is well underway, with much of the federal funding legally obligated despite the recent efforts of the Trump administration’s Office of Management and Budget to pause the disbursement of large swaths of previously appropriated, and now obligated, federal funding. For example, about two-thirds of IIJA funding, totaling $570 billion, has been awarded so far, roughly as expected for the five-year law. In response to Trump’s recent executive actions, the courts have strongly agreed that the law requires federal agencies to make good on their commitments and unfreeze duly appropriated and obligated funding.
The reality is that effective implementation will need to be sustained for years to come, and the current path of the Trump administration and how it affects this funding is still a big unknown. I wish I could be more reassuring, but my crystal ball has been clouded by what the Trump administration will attempt to do to future funding for our programs.