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New infrastructure bill allots $17B for ports. Here's where that money will go

Congress passed the bipartisan infrastructure bill late on Friday night and before it has even been signed into law, the White House is trying to sell the public on it.

The first stop coming on Wednesday: a port.

“There's a reason President Biden chose the Port of Baltimore to give his major speech celebrating passage of what, to date, is his signature legislative accomplishment,” says Aaron Klein, an infrastructure expert at the Brookings Institution.

The 2,702-page bill includes about $550 billion in new spending – $17.1 billion of that money will go to seaports with more money going to airports, roads, public transit, and broadband access.

On Tuesday, the White House announced new details on the how it aims to get the money out more quickly: the administration said it will launch $240 million in grants within the next 45 days and identify projects to begin moving on within 60 days in addition to other measures.

The White House says it will "accelerate investment in our ports."

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The current backlog at U.S. ports is due to surging demand, Flexport CEO Ryan Petersen said in a recent interview with Yahoo Finance. Port volumes are up over pre-pandemic levels, but the outdated infrastructure has held back the ability to pivot even further.

“We're just recognizing the pain of 20 years of not investing in our infrastructure,” Peterson said. “We're feeling all that pain in one year right now.”

How the new money will be spent

The $17.1 billion for ports will go through the U.S. Army Corps of Engineers, and 68% of it – more than $11.5 billion – will be focused on new construction. That money appears set to literally reshape ports in the years ahead with projects on the docket like dredging to allow bigger boats to enter or allow more boats to dock at once.

Billions more will go towards operations and maintenance over the coming decade. Hundreds of millions more is also set aside for things like projects along the Mississippi River, flood control, and a water infrastructure loan program.

In this aerial image, cargo containers are readied for transport at the Port of Baltimore in Baltimore, Maryland, on October 14, 2021. - Closed factories, clogged ports, no truck drivers -- up and down the global supply chain there are problems, raising concerns that it could disrupt the global economic recovery. (Photo by Brendan Smialowski / AFP) (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)
Cargo containers are readied for transport at the Port of Baltimore in Maryland. (BRENDAN SMIALOWSKI/AFP via Getty Images)

Klein calls the $17.1 billion a major investment, but "not enough money to give everybody what they want.” He’ll be watching to see if things are doled out in a strategic way, or will it be “a peanut butter spreading exercise where everybody's supposed to get something but nobody gets quite enough.”

"If implemented successfully, [the bill] can change the long-term fabric of American economy and society," Klein said.

Transportation Secretary Pete Buttigieg, who oversees the ports, noted Monday that the funding process for new projects has been ongoing but for every project they previously could get off the ground “there are many more that are worthy but that we can’t support.” This legislation “helps us to change that,” he said.

The U.S. government already sends billions to ports every year, including $7.8 billion set aside for fiscal year 2021.

From left to right, Baltimore Mayor Brandon Scott, Governor Larry Hogan and U.S. Secretary of Transportation Pete Buttigieg tour the Port of Baltimore  in Baltimore, Maryland  on July 29, 2021. 
(Photo by Marvin Joseph/The Washington Post via Getty Images)
U.S. Secretary of Transportation Pete Buttigieg, center right, toured the Port of Baltimore in July. (Marvin Joseph/The Washington Post via Getty Images)

Help alleviate the current supply chain crisis

On Tuesday the White House laid out measures it is implementing to combat the supply chain crisis immediately including more flexibility when it comes to port grants. They also announced measures to alleviate congestion at the Port of Savannah which officials hope could help some of the shortages soon, perhaps even before the holiday season.

But, as Klein noted, it's not just a problem in the U.S. “Baltimore is a huge importer of cars,” he said of Biden’s visit this week, but “if there aren't semiconductor chips to put in the Volkswagens to get on the boat, get to the Port of Baltimore, changing the harbor dredging or trying to prioritize cars into the port isn't going to solve the problem.”

Some are touting the bill more directly as a way to reduce the ongoing images of backlogged ships outside the Ports of Los Angeles and Long Beach. Rep. Peter Defazio (D., Ore.), chair of the House Committee on Transportation and Infrastructure, promoted the bill as, in part, “upgrading our port infrastructure to help alleviate the current supply chain crisis.”

But even as the Biden administration pushes to get funds out quickly, experts caution the process can often be slow. Kevin DeGood, director of infrastructure policy at the Center for American Progress, a progressive think tank, said new construction projects in ports can be 10 or 15 years in the making. The process historically involves “four congressional authorizations in order for you to go from idea conception to finalized project,” he said.

Container ships wait off the coast of the congested Ports of Los Angeles and Long Beach in Long Beach, California, U.S., October 1, 2021.      REUTERS/ Alan Devall
Container ships wait off the coast of the congested Ports of Los Angeles and Long Beach in California in October. (REUTERS/ Alan Devall)

The Army Corps currently has an estimated backlog of $109 billion in construction projects, according to the Congressional Research Service, as well as other authorized but unfunded maintenance projects that are awaiting money and could potentially get out the door more quickly.

DeGood said many projects are ready to go on paper, but there's a lot left to be ironed out. “Just because somebody has pushed for a project, they beat on their congressional delegation to get a little money for a study to authorize something,” he said. It “doesn't mean that project is of a particular economic value.”

Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.

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