Infrastructure Week: How Big is a $1 Trillion Bill?
May 18, 2017
This week was Infrastructure Week in Washington DC, and much of the discussion focused on the Trump Administration’s promise of legislation to provide or leverage a total of $1 trillion for infrastructure over and above current spending levels.
We at ETW got to wondering: how does that total compare to past infrastructure spending initiatives?
There are no perfect ways to compare different dollar amounts that are decades apart, but the best seems to be as a share of the entire economy, measured as gross domestic product. The 1956 law that funded the creation of the Interstate Highway System provided a total of $24.8 billion up front for Interstate construction and leveraged an additional $2.8 billion in state matching shares. (This was over and above the existing federal-aid highway program.)
That up-front financial commitment was 6.1 percent of GDP in the year the law was enacted. 6.1 percent of today’s GDP would be over $1.1 trillion, so from that perspective, the Eisenhower infrastructure package was larger than the Trump infrastructure package will be.
The entire 2009 ARRA stimulus law was estimated at the time to provided $787 billion in total funding (appropriations, mandatory spending, and tax cuts), which was almost 5.5 percent of 2009 GDP. But transportation and water infrastructure only accounted for $60.3 billion of the ARRA money, 7.6 percent of the total stimulus and less than a half-percent of 2009 GDP.
Funding for economic stimulus in the New Deal era is a bit more confusing, because funding was provided in a series of laws over the 1933-1939 period, not one big law. A table on page 1028 of the 1941 Budget estimates that total recovery and relief spending on public works (using their expansive definition to cover public buildings and public lands facilities at all levels of government as well as transportation and water infrastructure) totaled $13.1 billion between the start of the Roosevelt Administration in March 1933 and October 31, 1939. The first such law, the National Industrial Recovery Act of 1933, provided $3.3 billion in up-front funding, much of it for what became the Public Works Administration, which was 5.7 percent of a woefully depressed 1933 GDP of $57.2 billion. 5.7 percent of last year’s GDP would be $1.06 trillion.