Infrastructure Bill – Go or No Go?

While there is a reported agreement by a bipartisan group of senators to the framework of increased spending on core infrastructure programs, the political jockeying continues. Republicans question how the increased spending will be paid for – definitively not with any kind of gas tax increase – in addition to what commitments are being made to then consider a massive government funded bill that would not require bipartisan support. Progressive Democrats have concerns also about how the bill would be paid for – definitely not by increasing the corporate tax rate -- and argue that it doesn’t do enough for climate change and other social issues they want addressed.

In response to claims that support of the infrastructure bill commits Congress to an even larger spending bill, House Transportation and Infrastructure Chairman Peter DeFazio (D-OR) stated: “There’s no policy that I’m aware of attached to their bipartisan proposal. We have to have policy. The White House wants a transformative bill. We have to deal with climate change. I have written that policy. My message is ‘Let’s use substantially our policy and bargain on the numbers.’ I don't know how it will formally get resolved.”

This is also the first big bill with earmarks since the House brought them back this year, about $6 billion altogether out of $547 billion in surface transportation funding. Earmarks have been used since the early days of Congress to build support for a bill but were banned about a decade ago. DeFazio said he’d keep the GOP projects in the bill even if Republicans don’t vote for the legislation.

The increase of $579 billion in new funding includes $110 billion for roads, bridges, and other major projects, $48.5 billion for public transit, and $66 billion for passenger and freight rail. It also includes $16.3 billion for ports and waterways, $25 billion for airports, as well as $15 billion for electric vehicle infrastructure along with electrified buses and ferries.

To pay for those investments, the so-called “G-21 framework” relies on a broad mix of revenue sources that include:

• Redirecting unused unemployment insurance relief funds

• Repurposing unused relief funds from 2020 COVID-19 emergency relief legislation

• Allowing states to sell or purchase unused toll credits for infrastructure

• Extending expiring customs user fees

• Reinstating Superfund fees for chemicals

• Profits from 5G spectrum auctions

• Oil sales from the nation’s strategic petroleum reserve

• Public-private partnerships

• Private activity bonds, direct pay bonds, and asset recycling for infrastructure investment.

Negotiations and possible votes are expected to continue in July ahead of the annual August congressional recess.