ILTA Monthly Newsletter

Infrastructure Part 1: Traditional Infrastructure

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On August 10, the Senate passed the $1.2 trillion Infrastructure Jobs and Investment Act that includes $550 billion in new spending over 10 years. The measure passed by a vote of 69-30, with 19 Republican Senators joining all 50 Democrats to vote in favor of the bill. This bipartisan agreement was made possible by a group of 21 moderate Democrats and Republicans who struck a deal with President Joe Biden. The bill focuses primarily on traditional infrastructure without increasing individual or corporate tax rates which would have been opposed by the Republicans or imposing increased user fees opposed by Democrats.

The bill's passage was made easier due to infrastructure spending enjoying broad public support within both political parties while the more difficult issue of how to pay for the increased spending was mostly avoided. The bill was also primarily financed by using COVID-19 funds that were previously authorized and not used and some legal gimmicks that allowed Senators to duck hard decisions on increasing revenue.

The provisions of the Senate-passed bill would result in increased investments:

  • $178 billion for energy investments related to rebuilding and expanding the electrical grid, repairing, and providing better quality water infrastructure, and making the energy system more resilient from floods, droughts and cyberattacks 
  • $110 billion for the repair, replacement, and rehabilitation of roads and bridges 
  • $105 billion for maintaining, modernizing, and expanding passenger and freight rail, as well as modernizing and expanding public transit 
  • $65 billion for boosting broadband connection in rural communities where providers have not found it profitable to invest
  • $42 billion for improving airports, ports, and inland waterways to reduce congestion and maintenance backlogs 
  • $21 billion will be focused on reducing the blight and pollution that results from abandoned industrial and energy sites which have not been cleaned up 
  • $15 billion for increasing the number of charging stations for electric vehicles and increasing the number of electric public transit and school buses, and electric ferries 
  • $11 billion for a program that would promote transportation safety among states and municipalities with the goal of reducing accidents involving pedestrians 

The $550 billion in new spending would be paid through:

  • $250 billion repurposed from unused funds that were originally allocated for COVID-19 relief, including $53 billion in additional federal unemployment relief that was denied by some Republican governors 
  • $67 billion that has already been generated from previous electromagnetic spectrum auctions that the FCC conducts to issue telecommunications licenses – in addition to $20 billion in expected future spectrum auctions 
  • Approximately $56 billion in additional revenues from estimated economic growth stemming from these infrastructure investments 
  • Approximately $50 billion in recoupments from fraudulent unemployment benefit claims during COVID-19 
  • $49 billion from delaying a Medicare rebate rule that is intended to change the way prescription drugs are priced in Medicare and Medicaid plans 
  • $28 billion in additional revenues generated from new cryptocurrency tax reporting rules that are also established in this legislation 

Many of the revenue raising figures are murky estimations and traditional “fuzzy Washington math.” Republicans and Democrats both avoided real revenue raisers that might anger their bases, but the legislation is a considerable win for the terminals industry, paying for critical infrastructure, including roads, bridges, ports, waterways, transit and rail. In addition, the industry will not face increased taxes because of the bill.  

On August 24 the House of Representatives agreed to a late September vote on the same $1.2 trillion traditional infrastructure bill and narrowly passed a measure approving a $3.5 trillion budget blueprint (See “Infrastructure Part 2”).  The vote and the agreement for a date certain to vote on the Senate’s infrastructure bill ended a standoff between centrist Democrats, progressives, and the party leaders over their legislative agenda. A large and favorable bipartisan vote on the Senate bill is expected when it comes before the House. 


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