Despite pressures for reducing the overall spending of the federal government, some policymakers and analysts have considered increasing the funding for particular areas that might be especially important to the long-term growth of the economy. Increases have been proposed in spending for highways and other types of physical infrastructure, for education, and for research and development. At the request of the Rules Committee of the House of Representatives, the Congressional Budget Office (CBO) has prepared this study of the economic effects of federal investment spending. In particular, this study examines the effect on the economy of three broad classes of federal investment spending: physical infrastructure, including programs for transportation and environmental facilities; human capital, including programs that increase the skills and productive knowledge that people bring to their jobs; and intangible capital, such as research and development. Within each of these categories, the study examines trends in spending, discusses the rationales for that spending, and reviews evidence on the contribution of public investment to economic performance. The section on "Federal Investment in Human Capital" (p.48-58) covers federal outlays for education. In keeping with CBO's mandate, the study contains no recommendations. A number of tables and figures conveying data are included. (DB)