By Reginald Tucker—On Nov. 15, President Biden signed the $1.2 trillion “Roadways, Bridges & Broadband” infrastructure bill—the largest single investment of federal resources into infrastructure projects. The bill provides $550 billion in new funds over 10 years to: shore up roads, bridges and highways; improve internet access; and modernize the nation’s power grid.
Specific provisions of the bill include:
· $110 B to repair and replace roads & bridges
· $39 B for public transit
· $66 B for railways
· $17 B to upgrade the nation’s ports
· $55 B to upgrade water systems
· $65 B to expand internet access
· $7.5 B to build electric vehicle charging stations
In addition to the $110 B allocated to address the nation’s aging infrastructure, the bill authorizes two programs to increase the trucking workforce and help shippers that rely on trucks to move products to market. One is a pilot program that would allow younger drivers between the ages of 18-21 to drive trucks interstate; the other is a provision promoting women in the trucking workforce.
“The world has changed, and we have to be ready,” President Biden said as a bipartisan group of lawmakers, governors, mayors and business and union leaders looked on. He said the bill is proof that Democrats and Republicans can come together and deliver results. “We can deliver real results for real people.”
Floor covering distributors who have been closely following the legislative process driving the bill, which is now law, offered their views as to how it might impact their businesses. “The infrastructure bill certainly could provide some relief to all industries that rely upon over-the-road trucking given the initiatives it hopes to establish to expand the pool of qualified and eligible drivers,” said Scott Rozmus, president and CEO of Romeoville, Ill.-based FlorStar Sales, a top 20 flooring distributor. “Moreover, the bill purports to target spending upon various commercial segments, such as educational facilities, that would result in increased demand for floor covering. So, that aspect of the legislation could directly impact our industry in a positive way. With that said, I always worry when I see increased and massive governmental spending because, at some point, someone has to pay for it and the resulting pressures that might place on consumers and businesses could negatively impact the economy and, therefore, demand for floor covering, longer term.”
John Sher, president of Carrollton, Texas-based Adleta, another top 20 distributor, cited a report that showed the Dallas-Fort Worth area would benefit with a greater share of highway infrastructure because of the population growth in the region. “If it helps with local traffic it would mean easier delivery,” he said, adding this caveat: “Of course, they will tie up traffic with construction while expanding the roads, so it’s a catch 22.”
All in all, though, Sher applauds the bill. “Anything our country can do to help with the truck driver shortage is a good thing for all of us. Also, I am glad to see a bipartisan effort to invest in our country.”
Other distributors are more pessimistic about the new infrastructure law. Jeff Striegel, president of Owings Mills, Md.-based Elias Wilf, ranked No. 20, described the legislation as a “feel-good bill,” but he questioned its efficacy. “When you look at these scenarios, particularly as it relates to an infrastructure bill, generally speaking, the economic impact of it is somewhat limited because the spending doesn’t happen all at once,” he explained. “Basically, it’s spread over five or 10 years. It’s not like $550 billion isn’t a lot, but when you divide it by five or 10 years, you’re talking $50 to $100 billion compared to $1 trillion for the COVID bill. Infrastructure spending is meant to create a foundation for future growth; it’s not aimed so much at driving baseline growth today but more about the potential growth in the years ahead.”
Another challenge when it comes to infrastructure spending, according to Striegel, is the slow and sometimes bureaucratic rollout of the actual dollars in areas where they are needed the most. “The money has to trickle down to the state level, because state and local governments are the ones responsible for the transportation and water spending and things like that at the end of the day,” he explained. “Obama found that out 12 years ago that not all shovel-ready jobs are ‘shovel-ready.’”
In principle, though, Striegel appreciates the objective. “Fundamentally, at the end of the day, anything that’s good for the economy is good for flooring because flooring’s a big-ticket discretionary item,” he explained. “And anything that puts more dollars in consumers’ pockets generally helps to do that. I’m just not sure how long this takes to do that and if it’s enough to have any substantial impact, per se, on the business at the end of the day.”
On the same day of the bill’s signing, President Biden signed an executive order establishing a task force to lead the coordination and implementation of the new infrastructure law. The task force will be led by Mitch Landrieu, the former mayor of New Orleans.
(Look for more perspectives on this issue in an upcoming edition of FCNews.)