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Infrastructure

GOP Slams ‘Unchecked’ Inflation Shrinking Infrastructure Dollars

House Republicans overseeing transportation are increasingly using the Biden administration’s infrastructure spending — long heralded as a signature success — as a political weapon against the president.

Construction and gasoline price increases have driven up the cost and delayed the start of some infrastructure projects across the country. Transportation and other industry groups, at a roundtable hosted by GOP lawmakers on the Transportation and Infrastructure Committee Thursday, cited the rising costs as data this week showed the consumer price index jumped 9.1% from a year earlier, the largest gain in four decades.

Republicans, seeking to wrest control of the House from Democrats in the November midterm elections, have stepped up their criticism of President Joe Biden’s handling of inflation. Transportation Secretary Pete Buttigieg will have a chance to defend the administration’s performance on infrastructure programs when he appears before the House committee next week.

“It’s possible and even likely that the bad economic news is going to get worse,” the panel’s ranking member, Sam Graves (R-Mo.) said. “The Biden administration has left inflation completely unchecked.”

Read more: Inflation Strains Value of Biden’s Signature Infrastructure Law

Andrew Harrer/Bloomberg

Rep. Sam Graves, shown during a House hearing Oct. 30, 2019, faults President Joe Biden’s handling of inflation that’s eroding infrastructure dollars.

The new CPI data doesn’t reflect the last 30 days of decreases in gas prices, Biden said in a statement Wednesday. He called inflation his “top priority” and urged Congress to move this month on legislation to reduce the costs. The White House and committee Democrats didn’t immediately respond to an additional request for comment.

US Inflation Quickens to 9.1%, Amping Up Fed Pressure to Go Big

Republicans see streamlining regulations and increasing domestic energy production as solutions. They say they’re limited in what they can do now to rein in the inflation eating away at the increases the infrastructure law (Public Law 117-58) provides.

“The administration refuses to acknowledge how bad inflation is,” Graves said in a hallway interview. “Hopefully, we’ll be in a position after November, come next January, to be able to do something about it.”

If the Democrats lose control of the House, Graves is in line to become the panel’s leader.

“I can’t wait until Chairman Graves leads this committee,” Rep. Pete Stauber (R-Minn.) said. “I firmly believe you are going to see some changes.”

Buying Power

Construction input prices increased 1.9% in June compared with the month before and are up 20.1% from a year ago, according to an Associated Builders and Contractors analysis released Thursday. Cost estimates from five capital improvement projects planned in Wilmington, N.C., went up well over 100% each, which leads to projects either being scrapped or stalled, Luke Waddell, a city councilman, told lawmakers at the roundtable.

Stauber said 50% of road work won’t get done over the next five years because inflation is eroding the money’s buying power. He said Republicans are trying to remove redundancy in the National Environmental Policy Act, for example, so that a “bridge in Minnesota doesn’t take 14 years.”

Graves criticized the administration for not opening up domestic energy to drive the price down the price of gasoline.

Gasoline prices hit record highs last month. Karen Hubacz, president of Bond Construction Corp. and chair of the National Stone, Sand and Gravel Association, said she heats her asphalt with diesel, the cost of which changes daily, making it difficult to be competitively priced. Hubacz said actions can be taken by Congress, including alleviating permit issues by streamlining and investing more in workforce.

“The federal government doesn’t build roads, it gives funding to help build roads,” Rep. Rick Crawford (R-Ark.) said in a statement Thursday after he attended a separate event hosted by American Road & Transportation Builders Association. “The efficiency with which that money is delivered needs to be significantly improved. Your costs are rising every week and month that the U.S. Department of Transportation delays in getting that capital to you.”

To contact the reporter on this story: Lillianna Byington in Washington at lbyington@bloombergindustry.com

To contact the editors responsible for this story: Sarah Babbage at sbabbage@bgov.com; Robin Meszoly at rmeszoly@bgov.com

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