Biden s Bipartisan Infrastructure Deal
30 June 2021
Key takeaways
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What does the compromise mean for Biden's Infrastructure Bill?
On June 24, a bipartisan team of senators and President Biden agreed on an infrastructure spending package (the "Compromise Plan") to present to the Senate. The deal marks the latest iteration of the infrastructure plan that Biden first presented in April, described in detail on the Ashurst website here. It covers physical infrastructure but not the "human infrastructure" (social welfare) spending that Biden included in his original proposal. Although the Compromise Plan is a long way from becoming law, it shows that there is significant appetite among Republicans to pass major infrastructure spending under President Biden.The Compromise Plan is more a statement of bipartisan collaboration than a concrete policy agenda. Its authors have yet to decide on many significant points, including funding sources. It will likely be overhauled as its winds its way through the Senate and House, as legislators of both parties who did not work on the Compromise Plan demand further compromise. Biden himself has said that he will not sign it unless it is passed alongside a human infrastructure bill. However, none of these obstacles are expected to prevent the eventual passage of a bill, because both parties are invested in passing infrastructure spending.
How does this impact private-sector opportunities?
Despite the upcoming challenges, the Compromise Plan is a win for the private sector. Initially, it seemed that Biden's infrastructure plan would proceed with zero Republican involvement using the reconciliation process. Democrats had planned to fund the bill with a mix of loans and a raise in the corporate tax rate. Now that Republicans are cooperating, it is expected that they will want to minimize any raise in taxes and include alternative financing.
The Compromise Plan mentions several potential private sector sources, including public-private partnerships, private activity bonds, direct pay bonds, 5G spectrum auction proceeds, and asset recycling. Like everything else in the proposal, it is subject to change, but it is likely that Republicans will demand private sector funding in the final bill. Shelley Moore Capito, a Republican senator who led the compromise talks, has said that she has a strong preference for private sector investment over measures like a raised gas tax.
What is included?
The following is intended to be a non-exhaustive list of some of the key proposals contained in the Compromise Plan:
| BRIDGES, ROADS AND HIGHWAYS | |
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Highlights
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Breakdown Roads, bridges, and major projects - $109bn Improve road safety - $11bn |
| PUBLIC TRANSIT AND FREIGHT | |
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Highlights Modernization of existing public transit and investment to meet rider demand, and funding in order to:
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Breakdown Passenger/freight railways - $66bn Public transit - $49bn |
| AIRPORTS, PORTS AND WATERWAYS | |
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Highlights Airport proposal includes funding for:
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Breakdown Airports - $25bn Waterways and ports - $16bn |
| ELECTRIC VEHICLES AND TECHNOLOGY | |
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Highlights Tax incentives for both automakers and consumers Grant and incentive programs for state and local governments and the private sector to build a national network of 500,000 EV chargers. Electrification of school and transit buses. |
Breakdown Electric buses / transit - $7.5bn EV Infrastructure - $7.5bn |
| BROADBAND AND DIGITAL INFRASTRUCTURE | |
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Highlights Affordable, "future proof", high-speed broadband infrastructure with 100 percent coverage, including in unserved and underserved areas. |
Breakdown Broadband Infrastructure- $65bn |
| BUILDINGS AND UTILITIES | |
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Highlights Build a more resilient electric transmission system. Spur jobs modernizing power generation and delivering clean electricity, moving toward 100 percent carbon pollution-free power by 2035. Replace all lead pipes. |
Breakdown Power infrastructure including grid authority - $73bn Water infrastructure - $55bn Other infrastructure financing - $20bn Western water storage - $5bn Reconnecting communities - $1bn |
| RESILIENCE | |
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Highlights Increase resilience in essential services, including the electric grid, food systems, urban infrastructure, community health and hospitals, and roads, rail and other transportation assets. Remediate and redevelop critical physical, social and civic infrastructure. |
Breakdown Resilience - $47bn Environmental Remediation - $21bn |
Betty Cerini, Partner and Co-Head of Projects, Americas – Admitted only in New York
Anna Hermelin, Office Managing Partner (Los Angeles) and Co-Head of Projects, Americas – Admitted only in California and England & Wales
Andrew Smith, Partner – Admitted only in New York and England & Wales
Michael Lyndon-James, Senior Associate – Admitted only in New York and Western Australia
