At the request of the House Committee on Transportation and Infrastructure, this Congressional Budget Office (CBO) paper continues the detailed analysis of infrastructure outlays in CBO's August 1993 paper Updating Trends in Public Infrastructure Spending and Analyzing the President's Proposals for Infrastructure Spending from 1994 to 1998. In addition, it analyzes current and future spending proposals through 2000 based on the budget submitted by President Clinton to the Congress in February 1995.

Aaron Zeisler of CBO's Natural Resources and Commerce Division wrote the paper under the supervision of Elliot Schwartz and Jan Paul Acton. The author wishes to thank many people, both inside and outside CBO, for their helpful contributions. Within CBO, John Patterson helped to prepare and analyze data related to the President's 1996 budget. David Sanders, Jeff Holland, and Robert Arnold were also of great assistance in preparing data. Elizabeth Pinkston offered many useful comments and suggestions. Outside CBO, Gerard Keffer of the Bureau of the Census facilitated the compiling of state and local spending data.

Paul L. Houts edited the manuscript, and Christian Spoor provided editorial assistance. Donna Wood and Kathryn Quattrone prepared the paper for publication.

June E. O'Neill
Director
June 1995

SUMMARY

INTRODUCTION

INFLATION-ADJUSTED TRENDS IN PUBLIC SPENDING AND PROPOSED FEDERAL SPENDING FOR INFRASTRUCTURE

• Federal Infrastructure Outlays
• State and Local Infrastructure Outlays

THE PRESIDENTS 1996 BUDGET: INFRASTRUCTURE PROPOSALS FOR THE 1996-2000 PERIOD

• The Unified Transportation Infrastructure Investment Program
• Surface Transportation
• Aviation
• Water Transportation and Resources
• Water Supply and Wastewater Treatment

COMPARING INFRASTRUCTURE SPENDING WITH THE FEDERAL BUDGET AND THE ECONOMY

APPENDIX: SOURCES AND DEFINITIONS FOR INFRASTRUCTURE DATA

Tables
1.	Public Spending for Infrastructure, 1956-1991
2.	Public Capital and Noncapital Spending for Infrastructure, 1956-1991
3.	Federal Capital and Noncapital Spending for Infrastructure, 1956-1996
4.	State and Local Capital and Noncapital Spending for Infrastructure, Net of Federal Grants and Loans, 1956-1991
5.	Outlays for Federal Infrastructure Programs, 1995-2000
6.	Budget Authority for Federal Infrastructure Programs, 1995-2000
7.	Federal Spending for Infrastructure as a Percentage of All Federal Spending, 1956-1996
8.	Federal Spending for Infrastructure as a Percentage of Gross Domestic Product, 1956-1996
9.	State and Local Spending for Infrastructure, Net of Federal Grants and Loans, as a Percentage of Gross Domestic Product, 1956-1991
A-l.	Infrastructure Spending by Federal, State, and Local Governments, 1956-1991 (In millions of nominal dollars)
A-2.	Total Federal Spending for Infrastructure, 1956-1995 (In millions of nominal dollars)
A-3.	Direct Federal Spending for Infrastructure, 1956-1995 (In millions of nominal dollars)
A-4.	Indirect Federal Spending for Infrastructure, 1956-1995 (In millions of nominal dollars)
A-5.	State and Local Spending for Infrastructure, Net of Federal Grants and Loans, 1956-1991 (In millions of nominal dollars)
A-6.	Total State and Local Spending for Infrastructure, 1956-1991 (In millions of nominal dollars)
A-7.	Infrastructure Spending by Federal, State, and Local Governments, 1956-1991 (In millions of 1990 dollars)
A-8.	Total Federal Spending for Infrastructure, 1956-1995 (In millions of 1990 dollars)
A-9.	Direct Federal Spending for Infrastructure, 1956-1995 (to millions of 1990 dollars)
A-10.	Indirect Federal Spending for Infrastructure, 1956-1995 (to millions of 1990 dollars)
A-ll.	State and Local Spending for Infrastructure, Net of Federal Grants and Loans, 1956-1991(In millions of 1990 dollars)
A-12.	Total State and Local Spending for Infrastructure, 1956-1991 (to millions of 1990 dollars)
Figures
1.	Federal Spending for Highways and Other Types of Infrastructure, 1956-2000
2.	Federal Capital and Noncapital Spending for Infrastructure, 1956-2000
3.	Federal Capital Spending for Selected Types of Infrastructure, 1956-2000
4.	Federal Noncapital Spending for Selected Types of Infrastructure, 1956-2000
5.	Public Capital Spending for Infrastructure, 1956-1991
6.	Public Noncapital Spending for Infrastructure, 1956-1991
7.	Public Spending for Infrastructure as a Percentage of Gross Domestic Product, 1956-1991
Box
1.	Comparing Budget Authority and Outlays

 

SUMMARY

Public infrastructure outlays have risen in real (inflation-adjusted) terms throughout most of the 1956-1991 period. Since the end of the 1980s, however, state and local governments have contributed approximately 75 percent of those outlays, and current patterns of spending uphold that trend.

In 1994, total federal spending for infrastructure was $45.3 billion in nominal terms (not adjusting for inflation). The mix between capital and noncapital outlays remained about the same-70 percent capital investment and 30 percent noncapital investment. Federal spending is estimated to rise again in 1995 to $47.2 billion, a nominal increase of 4.3 percent, but a real increase of only 1.9 percent. If the contributions of state and local governments remain at their historical levels, total public spending for infrastructure for 1995 will increase.

As for the 1996-2000 period, the President's proposals would lead to a decrease in total infrastructure spending for most programs. Based on the President's budget, outlays for federal infrastructure programs in 1996 would fall by 2.2 percent in nominal terms-from $47.2 billion in 1995 to $46.2 billion. Although spending for all types of infrastructure would total $225.5 billion (in nominal terms) from 1996 through 2000, spending for each category would decline by 2000. In addition, by 2000 outlays for all infrastructure programs would be at approximately 92 percent of their 1995 spending levels. Relative to the Congressional Budget Office (CBO) baseline, those increases would represent a 11.6 percent decline, or a difference of $29.6 billion between the President's budget and CBO's inflation-adjusted baseline over the five years. When compared with the baseline, most of the decreases in spending during the 1996-2000 period would occur in surface transportation as well as water supply and wastewater treatment.

The Administration's proposed Unified Transportation Infrastructure Investment Program would encompass a large portion of federal spending and would give states and localities more control over investment decisions. However, outlays for highways, transit, rail, and aviation would fall by approximately $0.5 billion in 1996, a 1.4 percent cut from 1995 levels. Compared with the CBO baseline, outlays for those programs would decline by $21 billion over the 1996-2000 period. The President's budget has not specified those cuts by transportation mode. It would be left to the states to decide their own priorities for infrastructure in light of those budget reductions.

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