Infra projects back in fashion as US Democrats push for $100bn broadband pledge

The Moving Forward Act has navigated the first of three political hurdles, though now the $100 billion broadband initiative from the Democrats faces Republican scrutiny.

Jamie Davies

July 2, 2020

4 Min Read
Infra projects back in fashion as US Democrats push for $100bn broadband pledge

The Moving Forward Act has navigated the first of three political hurdles, though now the $100 billion broadband initiative from the Democrats faces Republican scrutiny.

Alongside the UK, the US has sought inspiration from the strategy which brought the country back from the brink in the 1930s. President Franklin Roosevelt’s New Deal relied on the theories of British economist John Keynes which advocated for increased government spending and lower taxes to inspire consumer confidence and pull an economy out of a recession.

This economic theory relies on the government embracing debt, but it was deemed to be successful in the 1930s under FDR and is seemingly inspiring Government’s today as strategies to emerge from the COVID-19 pandemic gather steam. The Moving Forward Act is the US’ iteration of these strategies, and it has taken the first step forward.

“Today, House Democrats have taken a bold step to move America forward, as we deliver on our For The People promise to increase pay cheques by rebuilding America with green, resilient, modern and job-creating infrastructure by passing HR 2, the Moving Forward Act,” said Speaker of the House Nancy Pelosi.

While this does sound like a promising start, the Bill will now have to pass through the Republican-controlled Senate and dodge a Presidential veto before being signed into law. Considering the bickering which often takes place on either side of the aisle, this is far from a given, despite this looking like a promising Bill.

“We urge Leader McConnell and the GOP Senate to join the House in supporting this transformative legislation For The People,” Pelosi said. “As Americans across the country come together to peacefully demand justice, equality and progress, the Congress must meet this moment by moving our country forward with real action.”

As part of the Bill, $1.5 trillion will be directed towards different infrastructure projects, including:

  • $500 billion to rebuild and reimagine the nation’s transportation infrastructure

  • $130 billion in school infrastructure targeted at high-poverty schools

  • $10 billion over five years to address structural challenges and upgrades childcare facilities

  • $100 billion for affordable housing infrastructure

  • $25 billion in the Drinking Water State Revolving Fund

  • $70 billion to transform our electric grid to accommodate more renewable energy

  • $100 billion to promote competition for broadband internet infrastructure in unserved and underserved communities

  • $30 billion to upgrade hospitals to increase capacity and strengthen care

  • $25 billion to modernize postal infrastructure and operations

As part of the broadband plans, the aim is to tackle the areas which have been ignored by the telecoms operators to date, those which are not deemed as commercially attractive due to difficult geography or sparse populations. $20 billion of this investment will be used to connect anchor institutions such as schools and hospitals. The Bill also provisions for support for low-income households via $50 vouchers to help reduce the monthly cost of broadband.

Interestingly enough, the Bill dictates a ‘technology neutral’ approach, suggesting the FCC or other authorities would not be able to insist on fibre deployment. This wording leaves the option for fixed wireless access (FWA) deployment in the more difficult regions.

As one would imagine, the Communications Workers of America (CWA) union is positive on progress but is already preparing for a less than enthusiastic response from the Republican party.

“For working people, a reliable internet connection is not optional – it’s an absolute necessity,” said CWA President Chris Shelton. “Thanks to Whip Clyburn and the Rural Broadband Task Force, the Moving Forward Act includes provisions that would support providing broadband access to millions of families and would ensure that workers doing that build out are able to exercise their rights.

“The Senate has already stalled on the Heroes Act, which would help in the short-term in keeping working families connected during the pandemic. It’s past time for Mitch McConnell and the Senate to act on this key issue. If they don’t, we must hold them accountable – and make sure that the Moving Forward Act becomes the new baseline for expanding broadband access across the country.”

Some will of course find this Bill very encouraging, while others will question whether the US Government should be putting itself under such a debt burden. The debt to GDP ratio in the US is currently 106% (2019), while it was 20% when FDR proposed vast infrastructure projects in 1933. Even at the end of FDR’s first term it had only increased to c.40%. While there might be precedent in federal funded infrastructure projects to combat economic downturn, the financial position of Government’s is very

Get the latest news straight to your inbox.
Register for the newsletter here.

You May Also Like