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The New Deal was a massive effort to lift the United States out of the Great Depression on several fronts. President Franklin D. Roosevelt’s plan created the Social Security Administration to protect older Americans financially, and used the Agricultural Adjustment Act to help farmers get out of debt. The New Deal also created new agencies to fund projects across the country that both improved communities and provided jobs at a time when unemployment was high.
During the 1930s, the Public Works Administration, Works Progress Administration (later named the Work Projects Administration) and other New Deal agencies funded projects to build and improve the country’s infrastructure, including roads, dams, schools, airports and parks. Many of the projects funded by the PWA and WPA remain part of the U.S. landscape. Here are nine projects that show how transformative the New Deal was for America.
1. Hoover Dam
Although planning for the Hoover Dam, or “Boulder Canyon project,” started in the 1920s, it was completed with an infusion of funds from the PWA and dedicated in 1935. Its official name changed to “Hoover Dam” during Herbert Hoover’s presidency, but was still known as “Boulder Canyon Dam” and “Boulder Dam” into the 1930s and ‘40s.
The Hoover Dam is located in the Colorado River’s Black Canyon, on the border between Nevada and Arizona. At the time of its completion, it was the tallest dam in the world. Today, it generates enough hydroelectric power per year to serve 1.3 million people.
2. Triborough Bridge
One of the major construction projects the PWA helped finance was the New York City’s Triborough Bridge (now the Robert F. Kennedy Bridge), which connected Manhattan, Queens and the Bronx.
The powerful New York City official Robert Moses led construction of the bridge, which opened in 1936. At the dedication ceremony, FDR placed the bridge within the larger context of New Deal projects, saying, “People require and people are demanding up-to-date government in place of antiquated government, just as they are requiring and demanding Triborough Bridges in the place of ancient ferries.”
3. San Antonio River Walk
In the late 1930s, the city of San Antonio secured funding from the WPA to improve infrastructure along the San Antonio River. The city used this money to build bridges and pathways that made the area more walkable and allowed businesses to move into the area. Today, the River Walk is a major commercial and tourist hub for the city.
4. LaGuardia Airport
The WPA funded the construction or improvement of roughly 800 airports, and one of the biggest ones the WPA helped build was LaGuardia Airport in Queens, New York. When it opened in 1939, it was known as New York Municipal Airport. Later, the city changed the named to honor Fiorello La Guardia, who was New York City’s mayor when the airport opened.
In addition to buildings and roads, the WPA also funded works of art, including a mural that artist James Brooks painted inside the Marine Air Terminal.
5. Chickamauga Dam
In 1933, New Deal legislation created a public corporation to improve the Tennessee Valley. One of the biggest projects that this corporation, the Tennessee Valley Authority, took on was the Chickamauga Dam, located on the Tennessee River outside of Chattanooga.
Before the dam’s completion in 1940, the surrounding region frequently suffered from expensive flood damage and mosquito-borne illnesses like malaria and yellow fever. By controlling the river’s water levels, the dam has prevented billions of dollars in flood damage. It also helped reduce mosquito populations in order to fight the diseases they spread.
6. Lincoln Tunnel
Yet another New York City project that the PWA helped fund was the Lincoln Tunnel. The tunnel’s center tube opened for traffic in 1937, allowing drivers to travel between New York and New Jersey under the Hudson River. Later, workers added two other tubes: the north tube in 1945, and the south tube in 1957.
7. New Orleans City Park
Using WPA funding, New Orleans improved its City park in the 1930s by building sidewalks, bridges and an art museum. This construction likely provided work to tens of thousands of people during the Great Depression, and also benefited residents by providing them with an improved public space.
8. Bay Bridge
The San Francisco-Oakland Bay Bridge was a project of the Reconstruction Finance Corporation, an agency that started under Hoover but became part of FDR’s New Deal efforts to improve the country’s infrastructure. Construction began in 1933 and the bridge opened in 1936. With its eight-mile span, the Bay Bridge was at that time the longest bridge in the world.
9. Arroyo Seco Parkway
The New Deal was also responsible for the first freeway. Both the PWA and the WPA helped fund the construction of Arroyo Seco Parkway—now known as the Pasadena Freeway or 110—which connected Los Angeles to Pasadena. The freeway opened to traffic between 1938 and 1940, and reduced travel between L.A. and Pasadena from 27 to 12 minutes.
Frances Perkins had first suggested a federally financed public works program, and the idea received considerable support from Harold L. Ickes, James Farley, and Henry Wallace. After having scaled back the initial cost of the PWA, Franklin Delano Roosevelt agreed to include the PWA as part of his New Deal proposals in the "Hundred Days" of spring 1933. 
The PWA headquarters in Washington planned projects, which were built by private construction companies hiring workers on the open market. Unlike the WPA, it did not hire the unemployed directly. More than any other New Deal program, the PWA epitomized the progressive notion of "priming the pump" to encourage economic recovery. Between July 1933 and March 1939, the PWA funded and administered the construction of more than 34,000 projects including airports, large electricity-generating dams, major warships for the Navy, and bridges and 70% of the new schools and one-third of the hospitals built-in 1933–1939.
Streets and highways were the most common PWA projects, as 11,428 road projects, or 33% of all PWA projects, accounting for over 15% of its total budget. School buildings, 7,488 in all, came in second at 14% of spending. PWA functioned chiefly by making allotments to the various Federal agencies making loans and grants to state and other public bodies and making loans without grants (for a brief time) to the railroads. For example, it provided funds for the Indian Division of the CCC to build roads, bridges, and other public works on and near Indian reservations.
The PWA became, with its "multiplier-effect" and a first two-year budget of $3.3 billion (compared to the entire GDP of $60 billion), the driving force of America's biggest construction effort up to that date. By June 1934, the agency had distributed its entire fund to 13,266 federal projects and 2,407 non-federal projects. For every worker on a PWA project, almost two additional workers were employed indirectly. The PWA accomplished the electrification of rural America, the building of canals, tunnels, bridges, highways, streets, sewage systems, and housing areas, as well as hospitals, schools, and universities every year it consumed roughly half of the concrete and a third of the steel of the entire nation.  The PWA also electrified the Pennsylvania Railroad between New York and Washington, DC.  At the local level it built courthouses, schools, hospitals and other public facilities that remain in use in the 21st century. 
List of most notable PWA projects Edit
The PWA was the centerpiece of the New Deal program for building public housing for the poor people in cities. However it did not create as much affordable housing as supporters would have hoped, building only 29,000 units in 4 + 1 ⁄ 2 years. 
The PWA constructed the Williamsburg Houses in Brooklyn, NY, one of the first public housing projects in New York City. 
The PWA spent over $6 billion but did not succeed in returning the level of industrial activity to pre-depression levels.   Though successful in many aspects, it has been acknowledged that the PWA's objective of constructing a substantial number of quality, affordable housing units was a major failure.   Some have argued that because Roosevelt was opposed to deficit spending, there was not enough money spent to help the PWA achieve its housing goals.  
Reeves (1973) argues that Roosevelt's competitive theory of administration proved to be inefficient and produced delays. The competition over the size of expenditure, the selection of the administrator, and the appointment of staff at the state level, led to delays and the ultimate failure of PWA as a recovery instrument. As director of the budget, Lewis Douglas overrode the views of leading senators in reducing appropriations to $3.5 billion and in transferring much of that money to other agencies instead of their own specific appropriations. The cautious and penurious Ickes won out over the more imaginative Hugh S. Johnson as chief of public works administration. Political competition between rival Democratic state organizations and between Democrats and Progressive Republicans led to delays in implementing PWA efforts on the local level. Ickes instituted quotas for hiring skilled and unskilled black people in construction financed through the Public Works Administration (PWA). Resistance from employers and unions was partially overcome by negotiations and implied sanctions. Although results were ambiguous, the plan helped provide African Americans with employment, especially among unskilled workers. 
When President Franklin D. Roosevelt moved industry toward World War II production, the PWA was abolished and its functions were transferred to the Federal Works Agency in June 1943. 
The PWA should not be confused with its great rival the Works Progress Administration (WPA), though both were part of the New Deal. The WPA, headed by Harry Hopkins, engaged in smaller projects in close cooperation with local governments—such as building a city hall or sewers or sidewalks. The PWA projects were much larger in scope, such as giant dams. The WPA hired only people on relief who were paid directly by the federal government. The PWA gave contracts to private firms that did all the hiring on the private sector job market. The WPA also had youth programs (the NYA), projects for women, and art projects that the PWA did not have.  [ page needed ]
When America's Infrastructure Saved Democracy
FDR's dedication to infrastructure saved America once. Could it happen again?
Franklin Delano Roosevelt's dedication to U.S. infrastructure, a "new deal for the American people" as he described it, united the United States of America.
Roads were built where there once was only dirt. Bridges connected lands that were once separated. Airports and runways made people airborne. Power lines brought light where there once was only darkness after sunset. And most importantly, the unemployed were once again hard at work. It was the greatest infrastructure project in this country's history, the likes of which we'll never see again.
But eight decades later, America's arteries of transportation, responsible for the lifeblood of our economy and way of life, are crumbling. Years of neglect, political gamesmanship, short-sightedness, economic tightening, and budgetary indecision threaten the accomplishments of a generation of hard-working Americans&mdashfrom the smallest roads to the largest dams.
"It's all falling into ruin now because we decided we didn't have to maintain it," says Gray Brechin, geographer and founder of the online archive The Living New Deal, "Thank god, they built it all as well as they did."
During the recent presidential campaign, President Donald Trump made a promise to reinvest in America's infrastructure. In fact, the topic was one of the few pieces of actual policy mentioned during his victory speech. But even the trillion dollars he's pledged would only partially make up the gap to get to $3.6 trillion&mdashthat's what the American Society of Civil Engineers estimated in 2013 would be needed by 2020 to rebuild America.
As this new administration takes office, it's worth looking back at the last time American infrastructure saved the country.
Reshaping a Nation
When the stock market crashed on October 29, 1929, it was, as Nick Taylor wrote in his book American-Made: The Enduring Legacy of the WPA, "the greatest crisis in [America's] history short of war."
Considering the sad state of the country, the 1932 presidential election was a predictable landslide, with Franklin Delano Roosevelt routing incumbent Herbert Hoover and his belief in limited government spending during a financial crisis. A Democratic majority would also fill both houses of Congress.
"Very few people today realize how close the country was on the verge of a second civil war. The New Deal was largely designed to make sure that didn't happen."
On Inauguration Day, March 4, 1933, FDR told the nation that they had "nothing to fear but fear itself." Then, reportedly within hours, he embarked on what is considered the greatest first 100 days (well, actually 105) in American presidential history. He pushed 15 major bills through the Democratic-held Congress, among them was the establishment of the Tennessee Valley Authority (TVA), the Public Works Administration (PWA), and the Civilian Conservation Corps (CCC), which were all designed to get people back to work by building federally funded infrastructure projects. As President Roosevelt had promised on the campaign trail, it was a new deal for the America and its citizens.
"Very few people today realize how close the country was on the verge of a second civil war or a revolution in 1933," says Brechlin, "The New Deal was largely designed to make sure that didn't happen."
FDR's New Deal programs were based on a inherently progressive belief system&mdashthat the government had an obligation to its citizens. "You needed to give people jobs," historian and author Nick Taylor told Popular Mechanics. "Ones that not only provided income but dignity of work."
So in Roosevelt's America, digging a drainage ditch was not just a job, but the workers' contribution to making their community, and in turn the country, a better place. Building a school wasn't just a way to make an income, but investing in the next generation. Damming the local river wasn't only improving one's lot in life, but also providing electricity to help one's neighbors. "(Roosevelt) had a comprehensive moral vision to improve the United States," says Brechin, "and to save democracy."
A Workforce of Millions
The establishment of the Works Progress Administration (WPA) by presidential act in 1935 was the crowning jewel of the New Deal. Led by the ambitious and pragmatic Harry Hopkins, the WPA's original intention was to be a jobs program, meant to put millions of people back to work. But with Hopkins at the helm and FDR's support, the WPA became much more.
Unlike the majority of PWA and CCC proposals, all WPA projects were requests from local and state governments and had to be submitted for approval. The deal was that the federal government would pick up a big chunk of the project's tab, provided it was of public interest and employed the maximum amount of people. As archivist Bill Creech explains, "The basic idea [was] to use local materials and as much of the out-of-work local workforce as possible."
This initially led to small, localized tasks like roads, bridges, schools, community parks, and drainage ditches. But Hopkins believed that the WPA could do more with a workforce that reached nearly 3.2 million by 1938. Oregon's Timberline Lodge, the Riverwalk in San Antonio, and New York's LaGuardia Airport are just a few of the iconic and soaring projects that have come to best exemplify the efforts of the WPA.
The overall numbers are staggering. According to statistics compiled in American-Made, the agency covered the U.S. with 650,000 miles of road, built 78,000 bridges, erected 125,000 civilian and military buildings, and constructed or improved 800 airports. More than infrastructure, the laborers of the WPA worked in schools, serving up 900 million hot lunches to hungry children and operated 1,500 nurseries.
They also provided arts and culture, putting on 225,000 concerts, plus thousands of plays, circuses, and puppet shows. They produced nearly half a million works of art, including ones painted by Jackson Pollock. The WPA's Federal Writers' Project wrote 276 full-length books, featuring pieces from soon-to-be famous writers John Steinbeck and May Swenson.
"[The WPA] brought the American infrastructure into the 20th century," says Taylor.
A 21st Century Dilemma
More than 80 years later, that blossoming of American potential is in decay.
To put it plainly, the U.S. failed to adjust investment in infrastructure with the country's growing population. In 1933, the U.S. population was 125.6 million. Today, that number stands at 324.3 million and growing. That means more cars, more roads, and more bridges. But infrastructure hasn't seen a serious commitment of resources for at least 60 years, dating back to Eisenhower's National Interstate and Defense Highway Act of 1956.
Stories about infrastructure always talk about how it's not a "sexy" way to spend taxpayer money. That's surely one factor that contributes to the disconnect between its important to America and the amount we're willing to spend on it. According to the ASCE, the No. 1 problem is surface transportation&mdashin other words, roads, bridges and highways. Millions drive them every day to and from work, and the ASCE says that subpar roads cost the American economy more than $100 billion in wasted fuel and time every year. Despite these hefty numbers, funding on the local, state, and federal levels are too often delayed or forever in limbo.
The ASCE's Brian Pallasch cites Virginia's recent battles to widen its interstates as the perfect example. It took nearly a decade, several governors, and a near-crisis for any solutions to finally be enacted. The federal government shoulders much of the blame as well, including December's federal budget temporary spending bill that stretches until April. This temporary bill freezes the planned increase for surface transportation funding at last year's levels and limits the fed's ability to partner with localities on projects. "(States) are not going to commit to building a $100 million bridge if there's no certainty that the federal partner is going to be there," says Pallasch, "You can't plan a bridge in three-month increments. That's not how that works."
One of ASCE's major recommendations for funding is to raise the fuel tax from its 1993 level of 18.4 cents&mdashof which 18.3 cents goes into the Highway Trust Fund. Despite inflation, gas price increases, and the drop in purchasing power, the fuel tax has stayed the same for nearly a quarter of a century when President Bill Clinton signed the hike into law.
The Roads and Bridges Ahead
During the campaign, Trump spoke of a one trillion dollar, 10-year infrastructure plan that would rely heavily on the private sector. It was met with mixed responses, but from the ASCE's point of view, "it's a significant and credible start to addressing the problem," says Pallasch. He explains that there is certainly a role for the private sector in a partnership between federal, state, and local governments in financing the improvements to America's infrastructure. Because many of these projects would be difficult to monetize, he's skeptical that private companies will be able to fix everything.
It's mostly impossible to recreate a New Deal for a new century. America was a much, much different place in 1933. It was significantly more rural, there were far fewer people, and unemployment was at record highs. It was also poorer, less hopeful, and a much larger need to create new infrastructure rather rebuilding what already existed.
But it was during this moment of country-wide despair when then-New York governor Franklin D. Roosevelt stepped to the podium as the commencement speaker for Oglethorpe University's 1932 graduating class, and gave advice that now reaches down through history. In his speech, he told the onlooking flock of soon-to-be graduates that "the country needs. demands bold, persistent experimentation. it is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something." Although America's new dilemma is far from similar, the answer remains the same.
Barron’s wrote critically about Franklin D. Roosevelt’s Tennessee Valley Authority infrastructure project, pictured here in 1942. But FDR was hardly alone in his ambition.
The widespread suffering caused by the Great Depression offered President Franklin D. Roosevelt nearly unlimited scope for action to address it.
And FDR didn’t lack for ambition.
“It is an opportunity to do a great deal for the people of many states and the whole country,” Barron’s quoted Roosevelt in 1933, speaking about his signature infrastructure initiative, the Tennessee Valley Authority. The TVA, said FDR, would tie “industry, agriculture, forestry, and flood control in one great development” to ensure “a better place for millions yet unborn in the days to come.”
Barron’s wasn’t swayed. “It is the first of the Roosevelt rules to keep a useful club in the closet,” the magazine’s editors wrote.
Many on the right today will be reaching for their own clubs when President Joe Biden turns to infrastructure after pushing through his $1.9 trillion Covid-relief package. With a vow to “go big” and plans to tackle everything from the environment to racial justice, Biden seems to be channeling the spirit of his Democratic predecessor.
More 100 Years of Barron’s
Yet Roosevelt is hardly the only president to address infrastructure in a big way. Perhaps the largest and most far-reaching project was the Interstate Highway System, the brainchild of President Dwight D. Eisenhower, a Republican.
In fact, Biden can look for Big Government inspiration all the way back to Alexander Hamilton, the nation’s first Treasury secretary. Hamilton had the federal government assume the states’ debts, created the first U.S. central bank, and established Paterson, N.J., as a planned industrial city.
And President Theodore Roosevelt practically dug the Panama Canal himself by force of will (plus the U.S. Navy)—a use of presidential power his younger fifth cousin surely took note of.
By 1933, perhaps nowhere in the nation was hit as hard by the Depression as the Tennessee Valley, “the victim of outside exploitation and the ignorance of its own poverty-stricken inhabitants,” Barron’s wrote.
The idea of harnessing the Tennessee River for power had been around for years. A World War I plan for a hydroelectric-powered munitions operation near Muscle Shoals, Ala., stalled when the war ended—but only after the government had spent $104 million, Barron’s reported, with an additional $50 million needed to complete the job.
Henry Ford offered to buy the project for $5 million and run it as a private power company, presenting a deal so generous to himself that, Barron’s wrote in 1922, “Mr. Ford’s wealth of today and all the fabulous fortunes of history would fade into insignificance.”
After Congress shot down Ford’s proposal, President Herbert Hoover in 1931 vetoed a bill that would have made Muscle Shoals a government-run concern.
Two years later, Roosevelt made Muscle Shoals central to the TVA proposal, which Barron’s in 1934 termed “the only genuinely socialistic project in the New Deal.”
The TVA delivered on much of its mandate to raise living standards in the seven-state region, and by the end of World War II it was the largest electricity supplier in the U.S. Expansion into coal-burning power in the 1950s and nuclear in the 1970s followed.
A transformer at TVA's Chickamauga Dam near Chattanooga, Tenn., in 1942.
In 2003, however, the TVA was $25 billion in debt, according to Barron’s, “raising the specter of a federal bailout.” In the end, that wasn’t needed, and the TVA marches on.
Eisenhower’s inspiration for the Interstate Highway System came from his own experiences—first with the Army’s 1919 motor convoy that needed 62 days to cross the U.S., and then as World War II commander who watched German troops speed from front to front on the autobahns.
Ike’s $100 billion proposal, however, “terrifies those who always have feared domination of the national highways by Washington,” Barron’s wrote in 1954. The scale alone “sends shivers up and down some spines.”
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Biden has announced a sweeping $953BN infrastructure deal for America, but there’s a catch
PRESIDENT Joe Biden announced on Thursday that a bipartisan agreement had been reached on a near USD $1TN infrastructure plan that would see much-needed funding for roads, bridges, power grids, public transport and the internet across the United States.
The deal was reached by five Republican senators and five Democratic senators and has the potential to create millions of jobs.
Over the next eight years the plan is for $109BN to be spent on roads and bridges, $66BN on railways, $49BN on public transport, $25BN on airports, $73BN on power grids, and $65BN on broadband internet.
This would be the largest investment in public transit in American history and the biggest rail investment since the creation of Amtrak.
The package will be paid for with unused coronavirus aid money and will not cause a rise in taxes on middle-income Americans. Democrats also promised they would not reverse the cuts in businesses taxes that Donald Trump enacted during his presidency.
Above: President Joe Biden is famously train-friendly. Image courtesy of Siemens AG.
The deal, however, is far from done. The president has said that this infrastructure plan will only go through if a far larger $6TN spending package is also passed by the senate.
This second package, or reconciliation bill, will likely include tax increases on corporations and the wealthy (those earning above $400,000) to pay for action on climate change, education reforms, paid leave, childcare benefits and more.
“This is important. There ain’t going to be a bipartisan bill without a reconciliation bill,” said Democratic House speaker Nancy Pelosi in a statement.
"If this is the only thing that comes to me, I'm not signing it. It's in tandem,” added President Biden in a separate statement.
Above: The package would provide the US with a much-needed infrastructure overhaul.
The second bill is in fact being drafted by Senator Bernie Sanders and would need to be passed by a budget reconciliation process in the senate - a process that will not require any Republicans as the Democrats hold a majority there.
The news of a second bill has split those in Washington DC, and not just Republican lawmakers.
Centrist Democratic Senator Joe Manchin expressed his doubts, telling reporters "That sounds extremely, extremely high for us to take on that much debt."
Manchin’s vote could end up tipping the scales and prevent both packages from passing.
When America Invested in Infrastructure, These Beautiful Landmarks Were the Result
Long before "stimulus" became a dirty word in some quarters of Washington, the federal government put people to work building things. Lots of things.
This spring marks the 80th anniversary of the Works Progress Administration (WPA), the biggest and most ambitious of more than a dozen New Deal agencies created by President Franklin D. Roosevelt. Designed to give millions of unemployed Americans jobs during the Great Depression, the WPA remains the largest public works program in the nation's history. It provided 8 million jobs in communities large and small. And what those workers put up has never been matched.
The WPA built, improved or renovated 39,370 schools 2,550 hospitals 1,074 libraries 2,700 firehouses 15,100 auditoriums, gymnasiums and recreational buildings 1,050 airports, 500 water treatment plants, 12,800 playgrounds, 900 swimming pools 1,200 skating rinks, plus many other structures. It also dug more than 1,000 tunnels surfaced 639,000 miles of roads and installed nearly 1 million miles of sidewalks, curbs and street lighting, in addition to tens of thousands of viaducts, culverts and roadside drainage ditches.
"A vast amount of our physical and cultural infrastructure went up between 1933 and 1940," said Robert Leighninger, author of Long-range Public Investment: The Forgotten Legacy of the New Deal. "To paraphrase Winston Churchill, never in our history has so much been built for so many in so little time and been so thoroughly forgotten."
When World War II sent millions of men into the military and defense-related industries, unemployment plummeted and so, too, the need for the WPA. Congress shut it down in June 1943.
The Public Works Administration (PWA) built larger public projects -- New York's Triborough Bridge and Lincoln Tunnel, Washington state's Grand Coulee Dam, Florida's Overseas Highway to Key West. But the WPA provided more jobs and touched more communities by funding smaller, less glamorous projects initiated by state and local governments.
About half still remain. All are showing their age.
"Many of those structures are nearing the end of their useful lives," said Adrian Benepe, a former New York City parks commissioner now with the Trust for Public Land. He fears that a lack of political willpower and resources may condemn some architectural and cultural treasures to the wrecking ball. Hundreds of WPA and other New Deal structures have already been demolished or are in danger of being torn down.
"A lot will last a while longer but they’re not going to last forever. There are diminishing returns. Not everything can be preserved," Benepe said.
Yet at a time when, despite widespread consensus that the country's bridges, roads and other public facilities are falling apart, "This nation doesn't seem to know how to do public infrastructure anymore," Benepe said. Still, he added, "I can't imagine New York without the stuff that was built under the WPA."
Such "stuff" is everywhere. A small sampling of what the WPA left us:
Seizing the moment
The Biden administration recognizes the potential for a well-designed, large-scale federal infrastructure investment program to close critical gaps, put Americans back to work, and correct economic, racial, and social inequities in employment. Incorporating a workforce lens to federal infrastructure investments can ensure they address all three of these crises simultaneously.
The case for using infrastructure spending as a countercyclical macroeconomic stabilization tool is not new. The rationale traces back to President Herbert Hoover and was later crystallized by John Maynard Keynes, who posited that public spending can offset downturns by boosting labor demand when unemployment is high. President Franklin D. Roosevelt’s New Deal put this theory to the test. A gargantuan effort with an enduring legacy, the initial appropriation for New Deal infrastructure projects under the Works Progress Administration (WPA) represented 6.7 percent of GDP—equivalent to $1.4 trillion today. At its peak, the WPA provided paid work for up to 40 percent of unemployed Americans, equivalent to about 4 million jobs today.
Beyond short run job creation, federal infrastructure investment can have several other positive effects. Boosting employment would increase aggregate demand and could put upward pressure on wages. As many studies have shown and policymakers increasingly recognize, running a high-pressure economy can be an effective way to reduce income inequality and narrow racial and gender wage gaps (provided it’s accompanied by complementary policies). Moreover, improving the nation’s infrastructure would increase long-run productivity growth. Finally, even if infrastructure investment had no impact on employment, productivity, and growth, it’d still deliver public goods that should be available to all but that may not be profitable to produce privately (such as rural broadband). Since many of the benefits of infrastructure spending are externalities—meaning that they accrue to society as a whole and individuals cannot be easily prevented from enjoying them—government provision is often efficient.
Despite approving trillions of dollars in COVID-19 relief to avert mass unemployment, Congress has allocated comparatively little for infrastructure spending. By contrast, America’s main peers and competitors all plan to massively increase infrastructure investment. The U.S. failure to follow suit is puzzling given infrastructure’s public support and bipartisan appeal during a divisive election year, both 2020 presidential campaigns supported $1.5 trillion to $2 trillion increases in infrastructure spending.
Historically low interest rates offer plenty of fiscal space for the government to spend on high multiplier activities like infrastructure without crowding out private investment—especially if such spending can accelerate reemployment, prevent scarring and support long-term inclusive growth. As the Biden administration and the 117th Congress consider further stimulus, they would be wise to take advantage of this momentous opportunity.
A new New Deal? How Biden's spending plans stack up to past presidential proposals
Biden New Deal plans (Photo: Jennifer Borresen)
WASHINGTON – A new New Deal? A reversal of the decades of focus on tax cuts and efforts to limit spending growth ushered in by former President Ronald Reagan? Spending that approaches levels in social democracies?
President Joe Biden has ambitious proposals to not just get the economy back on track after the coronavirus pandemic, but to also make generational investments to improve infrastructure, fight climate change, reduce inequality and increase the nation’s global competitiveness.
Less than two months after he took office, Congress approved $1.9 trillion in coronavirus relief spending. Biden has requested about another $4.1 trillion in what he’s calling his American Jobs and American Families plans.
Conservative critics have attacked Biden’s agenda as “tax and spend on steroids.”
So how big is Biden’s plan?
Here’s a look at how it compares with past presidential proposals and how it would change the size of the government.
How does Biden’s agenda compare to the New Deal?
There’s no easy way to match up Biden’s major spending proposals against the New Deal, which included a range of initiatives, some of which – such as Social Security – are much bigger today than they were at the start. In addition, Biden’s plans are mix of short-term stimulus and longer-term spending.
But comparisons made two different ways show the New Deal was bigger.
Bill Dupor, an economist and assistant vice president of the Federal Reserve Bank of St. Louis, calculated that the approximately $41.7 billion in economic relief from the New Deal was 40% the size of the nation’s economy in 1929. The $1.9 trillion coronavirus relief package that passed in March combined with about $4.1 trillion in additional spending Biden initially proposed is about 28% as large as the economy was in 2019, before the pandemic hit. So Biden’s plan is smaller – and the White House has been negotiating a less expensive package in an attempt to get bipartisan support. But, when combined with the $3.3 trillion in coronavirus relief spending that passed in the last year of the Trump administration, the total cost would be about 43% as large as the 2019 economy. That would be comparable to the New Deal.
Taking a different approach, the left-leaning Center on Budget and Policy Priorities estimated that the boost in federal spending between 1933 and 1940 equaled about 6.1% of GDP. And when spending ramped up for World War II, it averaged an additional 28% of GDP.
By comparison, the $1.9 trillion coronavirus relief package was about 3.8% of the size of the 2021 and 2022 economies. The approximately $4.1 trillion Biden initially proposed through his American Jobs and American Families plan would boost spending by an average of 1.6% of GDP over ten years, according to the Center. So his longer-term proposals are big in every meaningful sense of the word but not as big as the New Deal.
How would Biden’s infrastructure plan stack up historically?
The height of U.S. infrastructure spending came in 1933 with Roosevelt’s New Deal programs, when spending equaled 2.96% of the country’s GDP, according to a Brookings Institution analysis.
There was another spike during the interstate highway era of the 1950s and 1960s and a boost up to 2% of GDP in the 1970s, when the federal government supported new water and storm water projects.
Biden vs. GOP plans on infrastructure: 4 charts break down how far apart they are
Since the mid-1980s, the U.S. has typically spent less than 1% of its GDP annually on infrastructure.
Biden’s infrastructure proposal would reverse this trend dramatically.
If Congress passes a $1.6 trillion infrastructure plan with $200 billion in annual spending over eight years – close to what Biden has discussed – the share would be nearly 2% of GDP, the largest since the late 1970s, according to Brookings, and more than the interstate highway era. If the spending reaches $3 trillion over eight years, the share would be 3% of GDP, equal to the single-year record set in 1933.
How does Biden’s agenda compare to expensive bills passed under President Donald Trump?
The $1.9 trillion coronavirus relief package passed in March is smaller than the combined $3.3 trillion in pandemic response approved in 2020. In both years, costs were added to the deficit.
Trump’s signature tax cuts, which were not offset by spending reductions, cost $1.5 trillion over ten years. Biden wants to spend about $4.1 trillion over 10 years but has proposed tax increases to cover costs.
How does Biden’s agenda compare to expensive bills passed under President Barack Obama?
The 2009 stimulus package passed to lift the economy out of the Great Recession cost about $800 billion, the most Democrats thought they could get through the Senate to overcome a GOP filibuster. Democrats’ belief that there would have been a faster recovery under a bigger package influenced the March passage of their $1.9 trillion coronavirus relief package that Republicans unanimously opposed.
Obama’s signature health care legislation cost $938 billion but was offset with tax increases and spending cuts. Biden’s American Jobs and American Families plans would raise spending by about $4.1 trillion and increase taxes on corporations and the wealthiest Americans to pay for it.
How does Biden’s agenda compare to President Ronald Reagan’s tax cuts?
Reagan declared in his 1981 inaugural address: “Government is not the solution to our problem, government is the problem.” His 1981 tax cut was 2.89% of GDP, according to the U.S. Treasury which used a four-year average cost.
The size of Biden’s American Jobs and American Families plans averages about 1.6% of a share of the economy over 10 years, according to the Center on Budget and Policy Priorities. His proposals are an attempt to significantly reverse the trend, started by Reagan, to constrain the size and role of government.
How does Biden’s agenda compare with the current size of government?
Republicans like to compare Biden’s $6 trillion in spending on the coronavirus and the proposed American Jobs and American Families plans with the size of the budget. Before the pandemic hit, the federal government spent $4.4 trillion in 2019. But that’s a one-year number compared with the 10-year cost of Biden’s plans. The budget outlook Biden released in May estimates the federal government would be about 8% bigger under his proposals than if spending continues at its expected current pace.
How would federal spending change under Biden’s plans?
Federal spending, relative to the size of the economy, would be at its highest sustained levels since World War II, under the 10-year budget outlook Biden sent Congress in May. It would be nearly one-quarter the size of GDP each year over the next decade.
How would federal revenue change under Biden’s plans?
Taxes and other federal revenue would rise to about 20% of GDP by 2031. The 50-year average is 17.3% of GDP, according to the Center for a Responsible Federal Budget. Revenue last hit 20% in 2000, after the dot-com boom, and in 1944, after taxes were raised to help pay for WWII.
How big are Biden’s proposed tax increases?
Higher taxes for corporations and high earners that Biden has proposed would be the first major tax hike since 1993, according to Moody’s Analytics. But they would rank 24th as a share of GDP among tax hikes since WWI.
How would the corporate tax rate change?
Biden wants to raise the corporate tax rate to 28%. That would still be below the rate at which corporations have been taxed for decades, before rates dropped from 35% to 21% under Trump.
How would the top income tax rate change?
Biden wants to raise the top income tax rate to 39.6% from 37%. That would revert the highest level back up to where it was before Trump’s tax cuts were enacted.
How do Biden’s plans compare with taxes and spending in European countries?
Republicans have charged that Biden is trying to turn the country toward socialism. Both spending and revenues, however, would still be far below levels in Europe’s social democracies under Biden’s proposed budget.
Before the pandemic, government spending at all levels in the United States was around 35% of GDP compared with an average of 46.5% in European Union countries, according to a Brookings Institution analysis of data from the International Monetary Fund. Under Biden’s plans, spending would increase by nearly 4 percentage points, not enough to close the gap.
On the tax side, the United States collected revenue equal to about 30% of GDP before the pandemic compared to about 46% in European Union countries. Under Biden’s plans, revenue would increase by nearly 3 percentage points, which would still leave a large difference.
History Of The Federal Use Of Eminent Domain
The federal government’s power of eminent domain has long been used in the United States to acquire property for public use. Eminent domain ''appertains to every independent government. It requires no constitutional recognition it is an attribute of sovereignty.” Boom Co. v. Patterson, 98 U.S. 403, 406 (1879). However, the Fifth Amendment to the U.S. Constitution stipulates: “nor shall private property be taken for public use, without just compensation.” Thus, whenever the United States acquires a property through eminent domain, it has a constitutional responsibility to justly compensate the property owner for the fair market value of the property. See Bauman v. Ross, 167 U.S. 548 (1897) Kirby Forest Industries, Inc. v. United States, 467 U.S. 1, 9-10 (1984).
The U.S. Supreme Court first examined federal eminent domain power in 1876 in Kohl v. United States. This case presented a landowner’s challenge to the power of the United States to condemn land in Cincinnati, Ohio for use as a custom house and post office building. Justice William Strong called the authority of the federal government to appropriate property for public uses “essential to its independent existence and perpetuity.” Kohl v. United States, 91 U.S. 367, 371 (1875).
The Supreme Court again acknowledged the existence of condemnation authority twenty years later in United States v. Gettysburg Electric Railroad Company. Congress wanted to acquire land to preserve the site of the Gettysburg Battlefield in Pennsylvania. The railroad company that owned some of the property in question contested this action. Ultimately, the Court opined that the federal government has the power to condemn property “whenever it is necessary or appropriate to use the land in the execution of any of the powers granted to it by the constitution.” United States v. Gettysburg Electric Ry., 160 U.S. 668, 679 (1896).
Condemnation: From Transportation to Parks
Eminent domain has been utilized traditionally to facilitate transportation, supply water, construct public buildings, and aid in defense readiness. Early federal cases condemned property for construction of public buildings (e.g., Kohl v. United States) and aqueducts to provide cities with drinking water (e.g., United States v. Great Falls Manufacturing Company, 112 U.S. 645 (1884), supplying water to Washington, D.C.), for maintenance of navigable waters (e.g., United States v. Chandler-Dunbar Co., 229 U.S. 53 (1913), acquiring land north of St. Mary’s Falls canal in Michigan), and for the production of war materials (e.g. Sharp v. United States, 191 U.S. 341 (1903)). The Land Acquisition Section and its earlier iterations represented the United States in these cases, thereby playing a central role in early United States infrastructure projects.
Condemnation cases like that against the Gettysburg Railroad Company exemplify another use for eminent domain: establishing parks and setting aside open space for future generations, preserving places of historic interest and remarkable natural beauty, and protecting environmentally sensitive areas. Some of the earliest federal government acquisitions for parkland were made at the end of the nineteenth century and remain among the most beloved and well-used of American parks. In Washington, D.C., Congress authorized the creation of a park along Rock Creek in 1890 for the enjoyment of the capitol city’s residents and visitors. The Department of Justice became involved when a number of landowners from whom property was to be acquired disputed the constitutionality of the condemnation. In Shoemaker v. United States, 147 U.S. 282 (1893), the Supreme Court affirmed the actions of Congress.
Today, Rock Creek National Park, over a century old and more than twice the size of New York City’s Central Park, remains a unique wilderness in the midst of an urban environment. This is merely one small example of the many federal parks, preserves, historic sites, and monuments to which the work of the Land Acquisition Section has contributed.
Land Acquisition in the Twentieth Century and Beyond
The work of federal eminent domain attorneys correlates with the major events and undertakings of the United States throughout the twentieth century. The needs of a growing population for more and updated modes of transportation triggered many additional acquisitions in the early decades of the century, for constructing railroads or maintaining navigable waters. Albert Hanson Lumber Company v. United States, 261 U.S. 581 (1923), for instance, allowed the United States to take and improve a canal in Louisiana.
The 1930s brought a flurry of land acquisition cases in support of New Deal policies that aimed to resettle impoverished farmers, build large-scale irrigation projects, and establish new national parks. Condemnation was used to acquire lands for the Shenandoah, Mammoth Cave, and Great Smoky Mountains National Parks. See Morton Butler Timber Co. v. United States, 91 F.2d 884 (6th Cir. 1937)). Thousands of smaller land and natural resources projects were undertaken by Congress and facilitated by the Division’s land acquisition lawyers during the New Deal era. For example, condemnation in United States v. Eighty Acres of Land in Williamson County, 26 F. Supp. 315 (E.D. Ill. 1939), acquired forestland around a stream in Illinois to prevent erosion and silting, while Barnidge v. United States, 101 F.2d 295 (8th Cir. 1939), allowed property acquisition for and designation of a historic site in St. Louis associated with the Louisiana Purchase and the Oregon Trail.
During World War II, the Assistant Attorney General called the Lands Division “the biggest real estate office of any time or any place.” It oversaw the acquisition of more than 20 million acres of land. Property was transformed into airports and naval stations (e.g., Cameron Development Company v. United States 145 F.2d 209 (5th Cir. 1944)), war materials manufacturing and storage (e.g., General Motors Corporation v. United States, 140 F.2d 873 (7th Cir. 1944)), proving grounds, and a number of other national defense installations.
Land Acquisition Section attorneys aided in the establishment of Big Cypress National Preserve in Florida and the enlargement of the Redwood National Forest in California in the 1970s and 1980s. They facilitated infrastructure projects including new federal courthouses throughout the United States and the Washington, D.C. subway system, as well as the expansion of facilities including NASA’s Cape Canaveral launch facility (e.g., Gwathmey v. United States, 215 F.2d 148 (5th Cir. 1954)).
The numbers of land acquisition cases active today on behalf of the federal government are below the World War II volume, but the projects undertaken remain integral to national interests. In the past decade, Section attorneys have been actively involved in conservation work, assisting in the expansion of Everglades National Park in Florida (e.g., U.S. v. 480.00 Acres of Land, 557 F.3d 1297 (11th Cir. 2009)) and the creation of Valles Caldera National Preserve in New Mexico. In the aftermath of the September 11, 2001 terrorist attacks, Land Acquisition Section attorneys secured space in New York for federal agencies whose offices were lost with the World Trade Towers. Today, Section projects include acquiring land along hundreds of miles of the United States-Mexico border to stem illegal drug trafficking and smuggling, allow for better inspection and customs facilities, and forestall terrorists.
Properties acquired over the hundred years since the creation of the Environment and Natural Resources Section are found all across the United States and touch the daily lives of Americans by housing government services, facilitating transportation infrastructure and national defense and national security installations, and providing recreational opportunities and environmental management areas.
For information on the history of the Land Acquisition Section, click here. To learn more about the range of projects undertaken by the Land Acquisition Section, click here to view the interactive map titled Where Our Cases Have Taken Us. And for more on the procedural aspects of eminent domain, click here to read about the Anatomy of a Condemnation Case.
Public Works and Modernization
The New Deal used an array of federal agencies, local governments, and private contractors to upgrade and expand the nation’s infrastructure. It built hundreds of thousands of new roads, bridges, and tunnels city halls, libraries and post offices hospitals, schools and auditoriums dams, water works and sewage systems and airports, parks and military installations. It spread these improvements across the country, bringing lagging regions into the 20th century with paved roads, electric wires and telephone lines. This massive waves of public investment helped to underwrite the war effort and postwar prosperity. Because it was well built, most New Deal infrastructure is still in use today.