Key takeaways
- The Infrastructure Plan is still in its infancy and will be a priority for Congress over the summer.
- At almost $2.3 trillion, the Infrastructure Plan is as broad as it is large, and currently contemplates an investment of $621 billion in transportation infrastructure and $461 billion to improve drinking-water systems, expand broadband access, upgrade electric grids, and build schools.
- It is too early to tell the methods by which funding sources will be implemented, but with strong support for private funding and alternative procurement methods, including public private partnerships or "P3s", we expect that private-sector involvement will play an integral part in implementation of the Infrastructure Plan.
|
1. When will the funds flow?
The American Jobs Plan Act of 2021 (the "Infrastructure Plan") is still in its infancy. The process of drafting the associated bill will commence in the coming weeks. Once drafted, the bill will be introduced in the House of Representatives before being sent through committees and debated. The process will repeat in the Senate, and negotiations will take place at every phase. Given that the Infrastructure Plan also includes $980 billion of controversial non-infrastructure spending for job training, R&D, and healthcare, the legislation that emerges from this process will likely look quite different from the initial proposals.
As such, details of the Infrastructure Plan are currently limited to the – albeit, very detailed – fact sheet made available by the White House with President Biden's announcement on March 31, 2021.
2. Are there identifiable private-sector opportunities?
Private-sector involvement in the Infrastructure Plan will hinge on a number of yet-to-be-determined factors. In its current form, the Infrastructure Plan is largely funded by loans and a proposed increase in the corporate tax rate from 21% to 28%. Republicans have criticized this structure, calling instead for more opportunities for private funding and alternative procurement methods, and moderate Democrats have also expressed discomfort with the tax increase and deficit spending.
Typically, some measure of bipartisan support is necessary to enact expansive legislation like this, but Democrats are expected to pass the bill through the budget reconciliation process, which requires only their simple majority and no Republican votes. However, we expect that compromise will be necessary to win over moderates, including for the purposes of the budget reconciliation process, and that this will translate into opportunities for private-sector involvement.
It is noteworthy that Senate Majority Leader Chuck Schumer, who will oversee the passage of the bill, has been a major advocate for P3s in his home state of New York and we anticipate that public private partnerships will form a key focus for private-sector involvement.
3. What is included?
The following is intended to be a non-exhaustive list of some of the key infrastructure-related proposals contained in the Infrastructure Plan:
| Bridges, Roads and Highways |
|
Highlights
Among the proposals:
- fix the most economically significant large bridges in need of reconstruction, along with the repair of 10,000 smaller bridges; and
- modernize 20,000 miles of highways and roads.
|
Breakdown
Roads and bridges - $115bn
Improve road safety - $20bn
|
| Public Transit and Freight |
|
Highlights
Modernization of existing public transit and investment to meet rider demand, and funding in order to:
- address Amtrak's repair backlog;
- modernize the Northeast Corridor; and
- improve existing corridors and connecting new city pairs.
|
Breakdown
Public transit - $85bn
Passenger/freight railways - $80bn
Addressing inequities in transportation infrastructure - $45bn
|
| Airports, Ports and Waterways |
|
Highlights
Airport proposal includes funding for:
- the Airport Improvement Program (AIP);
- upgrades to Federal Aviation Administration (FAA) assets; and
- a new program to support terminal renovations and multimodal connections for convenient, car-free access to air travel.
|
Breakdown
Airports - $25bn
Waterways and ports - $17bn
|
| Electric Vehicles and Technology |
|
Highlights
Among proposals for tax incentives for both automakers and consumers alike, the EV proposals include the establishment of grant and incentive programs for state and local governments and the private sector to build a national network of 500,000 EV chargers by 2030.
|
Breakdown
Electric vehicle incentives - $174bn
Semiconductor manufacturing - $50bn
Investment in clean energy technologies and infrastructure - $46bn
|
| Broadband and Digital Infrastructure |
|
Highlights
Affordable, "future proof", high-speed broadband infrastructure with 100 percent coverage, including in unserved and underserved areas.
|
Breakdown
High-speed broadband - $100bn
|
| Buildings and utilities |
|
Highlights
Build, preserve and retrofit more than 2 million homes and commercial buildings to address the affordable housing crisis.
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.
Remediate and redevelop idle real property and reinvest in distressed and disadvantaged communities.
|
Breakdown
Affordable housing - $213bn
Grid and clean energy - $100bn
Public schools - $100bn
Water systems - $66bn
Eliminate lead pipes - $45bn
Child care facilities - $25bn
Veterans hospitals - $18bn
Community colleges - $12bn
Federal buildings - $10bn
|
| Resilience |
|
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
Infrastructure resilience - $50bn
Remediation and redevelopment of brownfield and superfund sites - $5bn
|
