The Infrastructure Report Card compiled by the American Society of Civil Engineers rates the country's infrastructure as C or "mediocre," an improvement over 2021's C- while also showing a $3.7 trillion gap between current planned investments and what the engineers think is needed to put things in "good working order."
"Sectors that rely on municipal-bond-financed investments by states and local governments accounted for about half of the total funding shortfall, and as a nation we're only treading water in those areas," said Seán W. McCarthy, CEO of BAM Mutual.
"The low-cost, long-tenor nature of the municipal bond market effectively matches the depreciable life of needed infrastructure projects like schools, clean water, wastewater projects, and transportation infrastructure like airports, roads, and bridges, which makes it the right tool to increase investment in those areas."
The report card tracks 18 categories of infrastructure, with nine of them earning D's. Ports scored the only solid B grade with some experts pointing to a heavy amount of private investment from the industry.
The transit sector earned a D and got a
"The ASCE 2025 Infrastructure Report Card confirms both the progress we have made and the urgent need to continue investing in America's public transportation systems," said American Public Transportation Association President and CEO Paul P. Skoutelas.
Funds approved during the Biden administration for infrastructure improvement will end in 2026, as the reauthorization process is already churning through the House Transportation and Infrastructure Committee, which prides itself on a bipartisan, results-driven agenda.
"It's not a bad thing going from a C minus to a C," said Rep. Rick Larsen, the Democratic Ranking Member on T&I. "My takeaway is that bipartisan investments in our infrastructure that we made three years ago are in fact working, and we need to keep it going."
Committee Chair Sam Graves R- Mo., has
The effects of infrastructure spending and the need for more are coming into focus as the municipal bond community is dealing with a Congressional threat to eliminate the tax-exempt status of munis.
According to numbers crunched by Hilltop Securities, municipal bond issuance has averaged almost $450 billion annually since 2019, with 2024 showing a record-breaking $508 billion issuance.
"We are almost through the first quarter and 2025 issuance could beat 2024's record year as well," said Tom Kozlik, managing director and head of public policy and municipal strategy for Hilltop. "This plentiful level of bond issuance helped America's infrastructure earn the C grade from the ASCE."
"If state and local governments lose their ability to sell tax-exempt debt costs the funding gap could rise."
The report card is issued once every four years and according to the ASCE makes a case for "the essential need for lawmakers to maintain existing levels of federal infrastructure investment and increase participation from state and local governments and the private sector, to reduce costs for American households and bolster economic growth."
Private sector participation from potential domestic and international partners also offers possibilities for infrastructure improvements.
"We've got about $300 to $500 billion worth of dry powder money already raised, waiting to be deployed," said Jon Phillips, CEO of Global Infrastructure Investor Association.
"There is a lack of opportunity for private capital in the U.S. Something is missing and we need to work on what that is, I think it's a mindset change supplemented by some practical sort of tools in the toolbox."
