CEA Report: Economic Benefits and Impacts of Expanded Infrastructure Investment
The White House released a report by the Council of Economic Advisers that highlighted the benefits of infrastructure investment.
From the office of the press secretary:
Today, the Council of Economic Advisers (CEA) released a report detailing the potential economic benefits from a comprehensive public infrastructure program. Please see below for the executive summary and read the full report here and at the bottom of this article.
In this paper, CEA investigates the likely impacts from a comprehensive public infrastructure program. The program includes a 10-year, $1.5 trillion program of infrastructure investment as well as new administrative and regulatory policies intended to increase efficiency and speed delivery of infrastructure projects. CEA assesses the likely impacts of the program across three key domains: GDP growth, time needed for project completion, and labor market opportunities for infrastructure workers.
CEA estimates that a 10-year, $1.5 trillion program of infrastructure investment could add between 0.1 and 0.2 percentage point to average annual real growth in gross domestic product (GDP). We further argue that getting the greatest possible impact from the program will require using our existing assets more efficiently, for example by using congestion pricing to allocate scarce capacity to its best uses.
CEA notes that the average time needed to complete final Environmental Impact Statements (EIS) reached 5.1 years for EIS completed in 2016, up from 4.7 years from two years earlier. CEA also finds that the average time needed to approve pipeline permit applications submitted to the Federal Energy Regulatory Commission (FERC) has risen over time and estimates that the median days needed for approval of pipeline project applications submitted in 2015 was 472 days. Speeding up the time needed to complete infrastructure projects is valuable because it accelerates the receipt of project benefits. CEA notes that the full Federal environmental and permitting process includes many components, of which compliance with the National Environmental Policy Act (NEPA) is only one element. Contingent on the projected impacts of a project, both the lead Federal agency and other agencies may have to issue permits to satisfy Federal laws, and each of those determinations would also be subject to a NEPA determination by that agency. Overall, the entire process can include many studies and procedures that occur prior to the initiation of one agency’s NEPA process and continue after that agency’s NEPA process has concluded.
Expanded infrastructure investment would also have direct implications for American workers. The Presidents plan would likely result in the employment of 290,000 to 414,000 additional infrastructure workers, on average, over a 10-year window, although these employment gains may be offset by losses elsewhere in the economy. Infrastructure jobs are particularly lucrative for, and disproportionately employ, workers with a high school degree or less. Infrastructure workers with a high school degree or less earn 14 percent more in median hourly wages than non-infrastructure occupations, while a subset of these workers, in skilled trades, obtain an even higher median hourly earnings premium of 32 percent.
Full CEA Report on The Economic Benefits and Impacts of Expanded Infrastructure Investment