06 April 2021

White House Unveils Expansive Infrastructure Proposal

President Joe Biden unveiled the first of his two-part infrastructure proposal on Wednesday, March 31. Referred to as the American Jobs Plan, the package would provide $2.3 trillion in spending to support traditional infrastructure upgrades and activities within a new, more expansive definition of infrastructure. The plan provides $621 billion for transportation infrastructure and resiliency activities, $115 billion of which would fund repairs to roads and bridges. This also includes $174 billion in electric vehicle (EV) investments to create a national network of 500,000 EV chargers by 2030, electrify at least 20% of school buses, and electrify the federal fleet, including the U.S. Postal Service. In addition, the proposal provides $111 billion in water infrastructure funding, which includes $45 billion to replace 100% of the nation’s lead service lines and $10 billion to monitor and remediate per- and polyfluoroalkyl substances (PFAS) in drinking water.

In regards to energy infrastructure, the proposal provides $100 billion to support activities such as plugging orphan oil and gas wells, creating a Civilian Climate Corps, and remediating brownfield and Superfund sites. The proposal would also extend the investment and production tax credits for clean energy generation (e.g., 45Q tax credit). Notably, the proposal reflects the administration’s preferred pathway to power sector decarbonization by 2035 — an Energy Efficiency and Clean Electricity Standard (EECES).

Other clean energy initiatives are woven into the funding for manufacturing and research and development programs. Among the plan’s $300 billion for manufacturing, several provisions call for clean-energy-related programs such as $46 billion to manufacture EVs, charging ports, and electric heat pumps. The plan’s $180 billion in research and development would support clean energy, with $35 billion funding the creation of an Advanced Research Projects Agency-Climate (ARPA-C) to reduce emissions and boost climate research, as well as $15 billion in demonstration projects for climate R&D priorities. R&D priorities include carbon capture and storage, hydrogen, advanced nuclear, rare earth minerals, offshore wind, biofuel/bioproducts, and EVs.

The rest of the proposal would fund activities that fall outside of any traditional definition of infrastructure. This more expansive set of priorities includes $400 billion in elderly and disabled Americans care, $213 billion for affordable housing, $137 billion for child care, public schools, and community colleges, $100 billion for broadband, and $100 billion in workforce training initiatives, among other programs. The proposal includes the Made in America Tax Plan to pay for these initiatives through corporate tax rate increases, among other changes.

While there is bipartisan support for traditional infrastructure spending, the American Jobs Plan currently lacks bipartisan support and seems unlikely to pass Congress through regular order in its current form. Some majority members and administration officials have voiced support for using the reconciliation process, which requires a simple majority to pass, to enact the plan. An April 5th determination by the Senate Parliamentarian confirmed the majority may use an amended fiscal year 2021 budget resolution to pass another reconciliation bill. This determination opens the door to an unprecedented second round of reconciliation in the same budget year. Senate Majority Leader Chuck Schumer, D-NY, has cited the determination as support for moving the American Jobs Plan through reconciliation. Legislative text still needs to be introduced and Congress remains in recess this week. The House is expected to advance the plan later this month as Speaker Nancy Pelosi, D-Calif., indicated a desire to pass it out of the House before July 4.

Sidley will continue to monitor congressional consideration of the American Jobs Plan.

SHARE
EmailShare