Do ‘we have a deal’ on infrastructure?

By Jenny LescohierJune 25, 2021

President Joe Biden delivers remarks on the bipartisan infrastructure deal in the East Room of the White House on June 24, 2021 REUTERS/Kevin Lamarque

President Joe Biden said “We have a deal” after a group of centrist lawmakers hammered out a bipartisan $1.2-trillion infrastructure spending package that promises $579 billion in new money for the nation’s roads, bridges, tunnels, rail and broadband over eight years.

“This agreement signals to the world that we can function, deliver and do significant things,” President Biden was quoted.

The compromise announced on June 24, which falls between Biden’s initial $2.3-trillion American Jobs Plan proposal and the GOP’s $980-billion counter offer, is promising, not just in what it suggests about the U.S. government’s ability to get things done, but also what it could mean for industries like construction.

Earlier this year, the American Society of Civil Engineers’ gave the U.S. an overall mark of C- for the condition of its roads, bridges, ports, drinking water systems and electricity grids and identified a $2.59-trillion spending gap. 

The latest agreement marks the first major increase of federal public works spending since President Barack Obama’s 2009 economic rescue plan. If passed, it would include some existing infrastructure programs, but also pump new funds into repairing and rebuilding the nation’s highways and bridges, as well as constructing high-speed rail and more equitably spreading high-speed internet access, which some business leaders believe could have a massive impact.

“I see this opportunity as being just as transformative as the period of rural electrification and bringing water and sewer to all residences in the United States,” said Jason Andringa, president and CEO of Pella, IA-based Vermeer Corporation, a large, family-owned agricultural and heavy equipment manufacturer.

“The future of being connected in all rural areas is incredibly important...,” Andringa said, noting a new federal infrastructure spending bill would benefit the economy and industry workers. “Many manufacturing jobs are good-paying jobs, construction is good-paying jobs,” he said.

The current framework would designate $312 billion for transportation projects, $65 billion for broadband and $55 billion for water infrastructure. A large sum, $47 billion, is set aside for “resilience” — a down payment on President Biden’s promise to deal with the effects of climate change. Included in that figure is $7.5 billion for financing a half-million electric vehicle charging stations.

Under the current proposal, the $1.2-trillion plan would be paid for in part with a $40-billion increase in the IRS enforcement budget to bring in $140 billion in unpaid taxes, as well as repurposing unspent coronavirus relief funds, according to an outline provided by the White House.

Infrastructure compromise is not really a done deal

As encouraging as this bipartisan compromise is, it doesn’t come without strings attached. 

Almost immediately after reaching the breakthrough, Biden and Democrats added a condition that could complicate the bill’s chances of passage.

Both the president and top Democrats said the compromise, which constitutes only a small fraction of the expansive, $4-trillion economic agenda Biden has proposed, could advance only alongside a bigger bill that would pour trillions more into health care, child care, higher education access and climate change programs. That measure, opposed by Republicans, would be paid for by increasing taxes on the ultra rich and global corporations that shift profits and jobs overseas.

“If this is the only thing that comes to me, I’m not signing it,” Biden was quoted. “It’s in tandem.”

Biden has since backed off on that demand, but House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer said Congress would not vote on the bipartisan infrastructure bill until the Senate passes its budget bill and sends it to the House later this month. 

Schumer predicted the pair of bills would be “the boldest, strongest legislation that this country has seen in decades.”

Construction industry leaders agree an influx of new funding is not only necessary to the safety and efficacy of the nation’s transportation system, but it will be a boon to construction in the form of new projects and the creation of jobs.

“This is an important step towards getting the infrastructure investment American taxpayers need and deserve,” said Michael Bellaman, president and CEO of Associated Builders and Contractors (ABC). “While we wait for more details to emerge, ABC remains concerned with the two-pronged approach emerging from Democrats in Congress and the Biden administration, which would seek to pair this agreement with a subsequent effort to use the budget reconciliation process to enact partisan tax hikes and restrictive labor policies concurrent with any potential bipartisan agreement.”

He continued, “Any infrastructure package should ensure that small construction businesses, which make up 99% of the industry, flourish through fair and open competition, which means the Biden administration and Congress must avoid enacting partisan policies such as the Protecting the Right to Organize Act, government-mandated project labor agreements and a one-size-fits-all approach to workforce development. A bipartisan deal should mean everyone is welcome to rebuild America, regardless of whether they are affiliated with a labor union.”

Where does the proposed infrastructure bill stand now?

Hopes for a final resolution hinge on the combined legislation coming together by this fall, but it will require persuading at least 60 senators to back the traditional infrastructure plan while keeping Democrats in agreement on the larger bill, which would have to pass through a budget process called reconciliation that would allow it to bypass a Republican filibuster but require all 50 Democratic and independent votes in the Senate.

Leaders aim to finish the first step on the reconciliation measure before leaving Washington for the August recess, but would probably push final passage to September. And while 21 senators endorsed a theoretical infrastructure framework this month, only five Republicans and five Democrats signed on to the final compromise.

After offering a brief update to their colleagues before leaving Washington for two weeks, lawmakers will now have to persuade enough Republicans and Democrats to support the framework.

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