US White House

On Thursday, President Joe Biden announced a deal on framework for $579 billion in new infrastructure spending as part of a $1.2 trillion package with a bipartisan group of Senators this afternoon.

According to a White House fact sheet, this includes $312 billion for transportation, with the following breakdown:

  • $109 billion for roads, bridges, and major projects
  • $11 billion for safety
  • $49 billion for public transportation
  • $66 billion for passenger and freight rail
  • $7.5 billion for electric vehicle infrastructure
  • $7.5 billion for electric buses and transit
  • $1 billion for reconnecting communities
  • $25 billion for airports
  • $16 billion for ports and waterways
  • $20 billion for infrastructure financing

The fact sheet details an additional $266 billion for “Other Infrastructure,” with the following breakdown:

  • $55 billion for water infrastructure
  • $65 billion for broadband infrastructure
  • $21 billion for environmental remediation
  • $73 billion for power infrastructure, including grid authority
  • $5 billion for western water storage
  • $47 billion for resilience

All this spending is paid for through a number of measures, including:

  • Reducing the IRS tax gap
  • Unemployment insurance program integrity
  • Unused unemployment insurance and 2020 emergency relief funds
  • State and local investment in broadband infrastructure
  • Allowing states to sell or purchase unused toll credits for infrastructure
  • Extending expiring customs user fees
  • Reinstating Superfund fees for chemicals
  • Proceeds from 5G spectrum auctions
  • Extending the mandatory sequester
  • Sales from the strategic petroleum reserve
  • Public-private partnerships, private activity bonds, direct pay bonds, and asset recycling for infrastructure investment
  • Macroeconomic impact of infrastructure investment

The timeline is still up in the air. President Biden this afternoon said he wants a deal by the end of the fiscal year, September 30. Yesterday, House Speaker Pelosi and Senate Majority Leader Schumer said they wanted a vote before the end of July.

There’s still a long road ahead and plenty of pitfalls. They need to write a legislative text that all sides agree conforms with the deal. They need commitments for yes votes from 60 Senators. The House of Representatives needs to be on board.

Another important piece of this conversation is that Democrats are continuing to develop on a parallel track a separate infrastructure package designed to pass with only Democratic votes under the budget reconciliation procedure. This will be used either as a “Plan B” if the bipartisan agreement falters, or as a “Phase 2” that will pass alongside the bipartisan agreement with priorities that weren’t included in the package. This reconciliation bill could be upwards of $5 trillion, and many progressives are conditioning their support for the bipartisan package on assurances that a “Phase 2” package also gets sent to President Biden’s desk for signature. If you have questions about this infrastructure announcement, please contact Lucia Alonzo at lmalonzo@michaelbeststrategies.com or Mike Dankler at mldankler@michaelbeststrategies.com.

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