Though President Biden and Vice President Harris are leaving office in January, the ramifications of four pieces of economic legislation the Biden-Harris administration passed with the 117th Congress will continue to impact local economies across the country.
The American Rescue Plan Act (ARPA), Bipartisan Infrastructure Law (BIL), CHIPS and Science Act, and Inflation Reduction Act (IRA) signified a new federal commitment to building the productive capacity of the nation—and importantly all its regions—to respond to global geopolitical competition, the ongoing threat of climate change, and economic inequities that have left many people and places behind.
Those three objectives—national security, energy abundance, and place-based economic opportunity—uniquely converge in a nearly $80 billion portfolio of “place-based industrial policies” authorized by these major bills. A prior Brookings Metro report selected place-based industrial policies using a two-part definition, requiring that such strategies should:
- 1. Encourage economic transformation through interventions in key industries.
- 2. Explicitly leverage concentrations of talent, suppliers, and knowledge that cluster and interact in place to spur development
Overall, nearly $41 billion has been awarded across 13 programs through September 2024. Awards from these programs differs from the requisite programmatic authorizations of more than $77 billion for three reasons. First, not all funding was meant to be distributed yet. Funding from the $10 billion Regional Technology Hubs program, for example, was designed to be distributed over 5 years, starting in 2023. Second, for many place-based programs, congressional appropriations have considerably lagged authorizations; the Regional Technology Hubs program has only received $500 million of what should have been a $2 billion appropriation from Congress. Third, overseeing agencies are still in the process of awarding some funds that have been fully appropriated by Congress.
To date, most place-based industrial funding is targeted to companies. Of the $41 billion, roughly 94% takes the form of company-level investment incentives, including direct incentives, cost-share agreements, and grants. Fully 80% of the awards ($33 billion) have come from the CHIPS Incentives Program, a $39 billion program to bolster domestic semiconductor production.2ii An additional $6 billion in company-specific incentives have also been awarded through several U.S. Department of Energy programs focused on clean power generation and energy supply chain resilience, such as the Clean Energy Demonstrations on Current & Former Mine Land and the Regional Clean Direct Air Capture Hubs programs.
By Glencora Haskins and Joseph Parilla / The Brookings Institute
