Following months of negotiations, the House of Representatives passed the $1.2 trillion infrastructure package Friday, sending it to the President for signature after the Senate passed the measure in August. President Biden announced he will schedule a signing ceremony when lawmakers return from a week-long recess.
Though significantly smaller than the $2.25 trillion American Jobs Plan proposal that was released in March, the non-partisan Congressional Budget Office determined that the $550 billion of new federal spending contained in the bill will add $256 billion to the deficit over the next 10 years. The balance of the bill is paid for via more than $200 billion in unused coronavirus relief funds; approximately $50 billion from delaying a Trump-era rule on Medicare rebates; and $50 billion in unused unemployment insurance supplemental funds from a number of states.
The bill passed 69 to 30 in the Senate and 228-206 in the House, with 13 Republicans voting for the measure in the House and 6 progressive democrats voting against it because it wasn’t tied to the passage of the Build Back Better Act. The bill is expected to create 660,000 or more jobs by 2025.
The bill covers a wide variety of infrastructure investments, including traditional funding for roads, bridges, ports and airports, but also covers digital infrastructure like broadband and increased reporting requirements for cryptocurrency exchanges. Here is a breakdown of the spending in the bill.
Transportation Funding – $284B
- Funding for Roads and Bridges: The Infrastructure plan calls for investing $110 billion in traditional road, bridge and major infrastructure projects that “would be too large or complex for traditional funding programs.” $40 billion is specifically set aside for bridge repair, replacement and rehabilitation.
- Freight and Passenger Rail: In the largest federal investment in public transit in history and in passenger rail since the creation of Amtrak 50 years ago, the package provides $39 billion to modernize public transit, including repairing and upgrading existing infrastructure, making stations more accessible, establishing new transit service and modernizing rail and bus fleets by replacing thousands of vehicles with zero-emission models. The Infrastructure bill also includes $66 billion specifically for passenger and freight rail, with $12 billion dedicated to partnership grants for intercity rail service, including high-speed rail.
- Airports and Ports: To modernize port infrastructure and clear repair and maintenance backlogs, reduce congestion and emissions near ports and airports and promote electrification and other low-carbon technologies, the bill provides $32 billion.
- Electric Vehicles: The bill provides $7.5 billion for zero- and low-emission buses and ferries, including for thousands of electric school buses with another $7.5 billion to build a nationwide network of plug-in electric vehicle chargers.
Utilities – $240B
- Broadband Service: $65 billion is dedicated to improving the nation’s broadband infrastructure, down from the initial $100 billion that the President first asked for. It also requires providers receiving federal funds to offer a low-cost affordable plan and creates a permanent federal program to help more low-income households access the internet.
- Power Grid Resiliency: The bill includes $65 billion for improving reliability and resiliency of the power grid.
- Water & Wastewater: $55 billion is set aside for water and wastewater infrastructure including $15 billion to replace lead pipes and $10 billion to address water contamination from chemicals that were used in the production of Teflon, water-repellent clothing and many other items, including firefighting foam. It also includes an additional $8 billion for western water infrastructure.
- Environmental remediation: For cleaning up Superfund and brownfield sites, reclaiming abandoned mine land and capping orphaned gas wells, the bill provides $21 billion in funding.
- Cryptocurrency: Requires more-stringent reporting of cryptocurrency gains and losses to the IRS. The language remains unchanged from the Senate provision, which generated concerns that it was too broad and would put undue burden and reporting obligations on miners and not just exchanges. The Treasury Department has vowed it will not go after the developers and miners, however.
- Job Training: The bill includes funding and provisions to get more job training programs going and to get more women into the construction and trucking industries.
While the infrastructure bill includes few tax provisions, more extensive tax-related changes may be coming in a FY 2022 budget reconciliation bill that continues to be under consideration by Congress. The infrastructure bill does, however, end the employee retention credit (ERC) early, making all wages paid after the end of the third quarter (Sept. 30, 2021) ineligible for the credit, with the exception of wages paid by eligible recovery startup businesses.