Infrastructure Part 1: Traditional Infrastructure

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:

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

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.