By Shellie Purvis, Managing Director
With dreams of turkey, dressing, and hashbrown casserole soon to be consumed with my family in Memphis, I was reminded of the two-year anniversary of one of America’s juiciest funding feasts—the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA). Agencies have awarded about $400 billion in federal dollars with 40,000 projects underway. Sure, passing the bipartisan IIJA in 2021 was an impressive feat, but overcoming its implementation difficulties has been challenging. Here are a few of the turkey day troubles I have heard from local municipalities and private sector manufacturers hungry for these federal dollars.
The Turkey Coma
As the 2024 presidential election approaches, President Joe Biden is crisscrossing the country to promote his economic plan, or “Bidenomics.” The administration is making a concerted effort to tout the benefits of unprecedented infrastructure investment for communities nationwide while also announcing low unemployment, the easing of record-high inflation and GDP expanding to 4.9%. But just as overindulging in Thanksgiving dinner leads to the inevitable tryptophan turkey coma, the administration’s talking points are eliciting a big yawn from American voters. Recent polling shows only 35 percent of Americans trust Democrats more on economic issues, and seven out of 10 people surveyed said they believed the economy is not getting better.
Instead, Americans seem to be sprawled on the couch, bloated with continued anxiety about affordability and not digesting the highway, road and bridge construction underway down the street. Biden continues to stress how his federal infrastructure investments and related policies will improve the economy, but advisors warn these messages are not resonating and remain lost in a pile of mashed potatoes. A year out from a consequential election in which voters will decide the country’s leader, it seems they have tuned out, focused on loosening their belts and resting their gravy-addled brains.
The Questionable Casserole
Just like the suspicious-looking casserole Aunt Linda insists on bringing to Thanksgiving dinner every year, the IIJA’s expanded Build America Buy America (BABA) rules on building materials in new infrastructure projects has good intentions but leaves everyone a bit queasy. At first glance, the casserole seems hearty and appealing—made in America with U.S.-sourced ingredients! But a closer look reveals something’s a bit off.
A barrier to addressing all those water infrastructure needs or repairing that dilapidated bridge is BABA compliance. Local governments are now mandated to be more careful in confirming that what they are spending federal money on was in fact made in the United States. Modest yet critical components like pipe fittings, pumps, motors and electrical switches that have been domestically produced seem to be impossible to find. Municipalities appear to be struggling to find manufacturers who will certify all their hardware is 100% American, resulting in additional costs to make design adjustments or find alternative materials. While IIJA includes funding to stimulate America’s appetite to produce those type of materials, it could take years. For now, wary local government officials are taking tiny spoonfuls of the casserole, but then must ask Aunt Linda, “Is that canned soup from China? Did those veggies come from Mexico?”
The Drunk Uncle
More than one million workers saw their wages increase at the end of October due to the IIJA’s changes to Davis-Bacon standards for federal works projects. The discussion about the prevailing wage rule that requires the payment of wages to correspond with pay for similar projects in the region where federal work is occurring has the potential to crash Thanksgiving dinner like Uncle Randy who has been over-served. He gets a few too many beers in him and starts spouting off his unsolicited opinions on everything from politics to alien conspiracies. While he means well, his rants only end up riling everyone up.
The Davis-Bacon wage rules can spur the type of passion like those in Uncle Randy’s tipsy tirades after a six pack. Supporters argue these regulations help protect local wages and workers. But critics complain the updated rule requirements inflate costs and restrict flexibility. Backers of Davis-Bacon say it levels the playing field, while opponents argue it inflates the cost of projects for taxpayers. By the end of the night, Davis-Bacon has everyone divided just like Randy’s ramblings on the existence of Bigfoot. At the end of the night, all that’s left is to hope Uncle Randy goes to bed and wakes up with a new perspective.
The Dreaded Grandparent Interrogation
You know how Grandma always corners you after Thanksgiving dinner for an endless round of questions: “How’s work? Are you seeing anyone special? When are you going to start a family?”
It’s all well-intentioned, but after the second piece of pecan pie, you just want to slip on some sweatpants and watch a football game. Local governments trying to fill their plates with appetizing IIJA funding face a similar grilling. There are so many rules, requirements and regulations that the application process can feel like getting through a four-hour inquisition from Pop-Pop.
The IIJA has unique provisions like the Community Benefit Plan and Justice40, which are guidelines and requirements aimed at ensuring federally funded infrastructure projects benefit local communities, especially disadvantaged communities. Ironically, the smaller local governments in these exact disadvantaged communities lack the staff capacity and technical expertise to develop compelling applications that satisfies Grandma’s nitpicking questions and preference for more details. Local governments also are required to detail project plans meticulously with cost-benefit analyses, progress reports and other paperwork that is required throughout the project lifecycles. The feds mean well, but all the added red tape is like navigating Grandma’s endless questions. Local governments just hope this interrogation has a big payoff under the Christmas tree.
Like overeager diners filling their plates before the turkey even hits the table, American communities are eager to feast on the IIJA’s bounty, though some implementation hiccups threaten their appetite. This Thanksgiving, as we count our blessings, let’s be thankful for the bipartisanship that led to this momentous meal and hope Uncle Sam savors it slowly, so we can all properly digest these historic investments in our shared future.