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President Biden Unveils $2.2 Trillion Infrastructure Plan

On March 31, President Biden announced a $2.2 trillion “American Jobs Plan” to shore up the nation’s infrastructure and create jobs. “It is not a plan that tinkers around the edges,” the President said in a speech unveiling the plan. “It is a once-in-a-generation investment in America.” While the administration’s plan will undoubtedly face opposition, the broad commitment to infrastructure investment is consistent with legislative efforts advancing in the U.S. House of Representatives (the LIFT America Act). The final legislation could create exceptional federal funding opportunities for both public and private sector developers of transportation, water, energy and other infrastructure projects.

Unlike the economic stimulus in 2009, the White House’s plan seeks to incentivize more than just shovel-ready projects. “The American Jobs Plan is looking to the future,” said U.S. Department of Transportation Secretary Pete Buttigieg. “But, yes, we will be supporting hundreds of billions of dollars of shovel-ready projects, but we’re also interested in shovel-worthy projects, because this is a once-in-a-lifetime opportunity to shape America’s infrastructure future, to make sure we’re competing and winning, when other countries are doing so much more than we are.”

The sprawling proposal, which includes both spending and tax credits, would be paid for with 15 years of higher taxes on corporations. The spending in the plan would take place over eight years, and the tax increases would more than offset that spending in 15 years, according to estimates. Republicans in Congress and some business interests immediately criticized the plan to increase corporate taxes and other aspects of the plan and vowed to fight the proposal. Senate Majority Leader Mitch McConnell blasted the American Jobs Plan claiming the proposal is a “Trojan horse for major tax increases” and promised to oppose the plan “at every step.”

Although details about allocation and eligibility are not yet available, the plan in general includes:

Transportation infrastructure: The American Jobs Plan invests $621 billion on roads, bridges, public transit, rail, ports, waterways, airports and electric vehicles to improve air quality, reduce congestion, and limit greenhouse gas emissions.  This includes $115 billion in modernizing 20,000 miles of highways and roads and repair 10,000 bridges (including the ten most economically significant bridges in the country); double the federal funding for public transit by investing $85 billion to modernize existing transit and help agencies expand their systems to meet demand; $80 billion to passenger and freight railways; $25 billion to airports, including funding for the Airport Improvement Program; and $17 billion to waterways and ports, and includes a Healthy Ports program to mitigate the cumulative impacts of air pollution on neighborhoods near ports.

Water infrastructure, Brownfields and mine and oil and gas reclamation: The plan includes a $66 billion investment to rebuild water infrastructure, including upgrading the country’s drinking water, wastewater and stormwater systems, tackle new contaminants and support clean water infrastructure in rural parts of the country.  Additionally, the proposal includes a $5 billion investment in the remediation and redevelopment of Brownfield and Superfund sites, as well as related economic and workforce development.  An additional $45 billion will be allocated to replace all of the nation’s lead pipes and service lines.  Further, an additional $16 billion is allocated to plugging oil and gas wells and restoring and reclaiming abandoned coal hardrock, and uranium mines.  Finally, the plan calls for building clean industries in distressed communities, including investment in 15 decarbonized hydrogen demonstration projects in such communities and stablishing ten pioneer facilities that demonstrate carbon capture retrofits for large steel, cement and chemical production facilities.

Affordable housing:  The plan would allocate $213 billion in tax credits and grants to develop, preserve and retrofit more than two million affordable and sustainable housing units, including 500,000 new homes for low- and middle-income homebuyers.  The plan pairs this investment with the elimination of state and local exclusionary zoning laws.  The proposal also provides $40 billion to improve the infrastructure of the public housing system in America.

Electrical grid:  The American Jobs Pan includes a $100 million investment in the electric grid, including the creation of a tax credit that incentivizes the buildout of at least 20 gigawatts of high-voltage capacity power lines and establishing a new Grid Deployment Authority at the Department of Energy (DOE) that allows for better leverage of existing rights-of-way and supports creative financing tools to spur additional high priority, high-voltage transmission lines.

Electric vehicles:  The proposal includes $174 billion investment in the electric vehicle market, including consumers rebates and tax incentives to buy American-made electric vehicles and establishing grant and incentive programs to build a national network of 500,000 charging stations by 2030.  It would also replace 50,000 diesel transit vehicles and electrify at least 20% of yellow school buses.

Broadband: The American Jobs Plan would invest $100 billion to give every American access to affordable, reliable and high-speed broadband.

Other: The plan includes $180 billion to advance U.S. leadership in critical technologies, upgrade research infrastructure, and establish the U.S. as a leader in climate science, innovation, and research and development; $300 billion toward boosting manufacturing, specifically semiconductor, medical, and clean manufacturing; $100 billion to build new public schools and upgrade existing buildings, and $12 billion to states to use towards infrastructure needs at community colleges; $100 billion to workforce development to help dislocated workers; and $10 billion to modernize federal buildings’

U.S. House Democrats Also Introduced Infrastructure Funding Legislation

President Biden’s plan comes on heels of a much smaller infrastructure plan introduced last month by Democrats in the U.S. House Energy and Commerce Committee.  The Leading Infrastructure for Tomorrow’s America Act (or LIFT America Act) provides for a $312 billion investment in the nation’s electric grid, drinking water infrastructure and energy efficiency. The legislation is supported by all of the Democratic members of the panel and represents the committee’s opening proposal for a infrastructure package.

A full legislative hearing on the LIFT America Act was held on March 22 but the Committee has not yet voted on the legislation.  It is not known whether Congressional Democrats will attempt to merge this legislation with Biden’s more expansive American Jobs Plan.  However, Chairman Frank Pallone, Jr. (D-NJ) affirmed Biden’s proposal “aligns with the LIFT America Act.”

The LIFT America Act contains the following funding and investment proposals per year for fiscal years 2022-2026:

Drinking water infrastructure and programs: The proposal authorizes $4.5 billion per year for lead drinking water line replacements and the creation of a new EPA grant program under the Safe Drinking Water Act to aid community water systems fouled by Per- and polyfluoroalkyl substances (PFAS chemicals).  The LIFT America Act also would extend and expand authorizations of $26.3 billion for a variety of water programs, including the Safe Drinking Water State Revolving Loan Fund.

Grid modernization, energy conservation and clean energy infrastructure: The LIFT America Act authorizes $3.87 billion per year for electric grid infrastructure, focused on grid modernization, security, resiliency and efficiency.  The bill also includes funding to establish a strategic transformer reserve to speed electric grid recovery following extreme weather events.  It also offers tens of billions in authorizations for several programs to cut energy usage, as well as for energy efficiency retrofits at schools, homes and public facilities.  Further, the legislation would provide grants to states, local governments and Indian tribes to support their efforts to reduce fossil fuel emissions and conserve energy.

This proposed legislation also provides $850 million per year to spur the development of Smart Communities infrastructure through technical assistance, grants to local agencies and training. In particular, the LIFT America Act would authorize the DOE’s proposed Cities, Counties and Communities energy program to provide technical assistance to cities and communities and competitive grants for clean energy solutions in development and redevelopment efforts.

Alternative fuels, electric vehicles and electrification.  The legislation would authorize the Clean Cities Coalition Network Program and provide $375 million per year (allocated according to criteria to be established by the Secretary of Energy) to support expanded development of alternative fuel infrastructure and expanded use of alternative fuel vehicles.  Further, the bill would provide $625 million per year to reauthorize the State Energy Program and provides additional grants  to support development of an electric vehicle charging network.  It also includes $500 million per year for electric vehicle supply equipment for light-duty vehicles  and $22.5 billion per year to provide grants to state and local governments to support projects that encourage the use of electric vehicles.  Additionally, proposal authorizes $3.8 billion to reduce air pollution at ports by electrifying port infrastructure.

Brownfields and other programs:  The LIFT America Act would authorize $2.7 billion per year for EPA’s Brownfields program and includes provisions on dam safety, including mandating dam safety and financial viability requirements as part of the federal hydropower licensing processFurther, the bill would authorize $80 billion in high-speed broadband internet buildout across the country.