Trends in Public Spending on Transportation and Water Infrastructure, 1956 to 2004

The nation’s infrastructure plays a vital role in its economy and in the daily lives of its citizens. Since the mid- 1950s, expenditures for transportation and water infrastructure by the federal government and state and local governments have annually accounted for over 2 percent of the nation’s gross domestic product (GDP). In 2004, such spending for infrastructure was more than $312 billion (measured in 2006 dollars). This Congressional Budget Office (CBO) paper describes the trends in public spending for transportation and water infrastructure since 1956. CBO focuses on spending for highways and roads, mass transit, rail, aviation, water transportation, water resources such as the construction and maintenance of dams and levees, and water supply and wastewater treatment. Those types of infrastructure, which draw heavily on federal resources, share the economic characteristics of being relatively capital intensive and producing services under public management that facilitate private economic activity. They are typically the types examined by studies that attempt to calculate the payoff, in terms of benefits to the economy, from government funding of infrastructure. The paper reports public spending both for capital and for operation and maintenance. Capital spending is for the purchase, construction, rehabilitation, and improvement of physical infrastructure. Spending for operation and maintenance is composed of expenditures that are generally required to provide the services needed for infrastructure to function and that are often necessary for the repair and safe operation of existing infrastructure. (In some cases—as with air traffic control services, for instance—the costs can be sizable.) The data that CBO uses for its analysis of public spending on transportation and water infrastructure, which come from the Office of Management and Budget (OMB) and the Bureau of the Census, cover federal spending from 1956 to 2006 and state and local government spending from 1956 to 2004. The data on federal spending also incorporate CBO’s estimate of spending for 2007 and its baseline projections through 2009 (the period through which expenditures on highways and roads and mass transit, which account for over one-half of federal spending on infrastructure, have been authorized by the Congress). CBO reports total federal spending on infrastructure as well as its two components: (1) grants and loan subsidies to states and localities, which constitute almost two-thirds of the total, and (2) all other federal spending on infrastructure. CBO reports state and local spending net of the federal grants and loan subsidies. From 1956 to 2004, annual public spending on infrastructure, adjusted for inflation, rose steadily—growing an average of 2.3 percent per year. During the first several decades of the span, that growth was mostly attributable to increases in federal expenditures, particularly, rising capital spending on highways and roads, water supply and wastewater treatment facilities, and rail. From 1987 onward, infrastructure spending by the federal government and by states and localities has grown in real terms by 1.7 percent and 2.1 percent, respectively.


  • English

Media Info

  • Media Type: Web
  • Features: Appendices; Figures; Photos; Tables;
  • Pagination: 38p

Subject/Index Terms

Filing Info

  • Accession Number: 01055517
  • Record Type: Publication
  • Files: TRIS, ATRI
  • Created Date: Aug 13 2007 12:15PM