Infrastructure Week Materializes as $1.2 trillion Bill Narrowly Passes the House

The bipartisan Infrastructure Investment and Jobs Act was narrowly passed by the House on November 5, 2021, after months of negotiation. In the end, thirteen Republicans voted for the bill and six Democrats voted against it.

The bill aims to reform an aging national public works system, fund climate resilience initiatives, and expand access to high-speed internet. More than $550 billion of new spending will be included in the infrastructure bill, costing $1.2 trillion over eight years.

"We took a monumental step forward as a nation," stated President Biden, "Generations from now, people will look back and know this is when America won the economic competition for the 21st Century."

Federal agency-related provisions include reforming regulations and contracts, environmental protection, and cyber security and infrastructure upgrades.

Infrastructure: Roads, Bridges, Railroads, and Safety Measures

This bill makes significant investments in roads, bridges, ports, pipes, and other infrastructures, which aim to make business, deliveries, and commuting easier.

In accordance with the bill, direct public entities must review private partner's compliance with the terms of their agreement within three years of operations starting, when public-private partnerships cost $100 million or more.

The bill provides $52.5 billion to the Highway Trust Fund (HTF) for federal highways with 2 percent annual increases, reaching $56.8 billion by 2026 – this follows the stopgap measure reauthorizing the HTF after the Department of Transportation (DOT) temporarily furloughed 3,700 employees, as previously reported by FEDmanager.

“Now, we begin the work of building infrastructure that will support the traveling public and ensure an economically competitive America for generations to come. The U.S. Department of Transportation stands ready to implement this historic and transformational legislation and help create a transportation system that works for every American,” stated DOT Secretary Pete Buttigieg in response to the bill passage.

Further, DOT will issue regulations requiring adequate emergency lighting and safety measures, and specifying information required in accident and incident data collection. The bill further instructs DOT to conduct a five-year audit of passenger rail operator training, qualification, and certification programs, in conjunction with mandatory preemployment and random drug tests for all mechanical employees.

A new apprenticeship pilot program will allow apprentices younger than 21 to drive commercial motor vehicles with probationary periods and other restrictions, according to the bill. This program would be limited to 3,000 apprentices at any given time and conclude in three years.

In addition to the relevant federal agencies, state highway safety offices, state toxicologists, and the DOT will all submit recommendations to Congress regarding alcohol and drug toxicology result submissions - aiming to provide nationwide data on fatal injuries resulting from motor vehicle accidents. DOT will also prepare recommendations on developing a national clearinghouse to collect and share marijuana samples for research related to marijuana-impaired driving.

“Resilience” Provisions: Cybersecurity and Climate Change Mitigation

As part of the bill's efforts to combat climate change and modernizing energy networks, the Department of Energy (DOE) and the Department of Interior (DOI) will also receive emergency funds for various projects, such as hydrogen hubs, grid grants, and abandoned mines.

The development and adaptation of clean-energy technologies gains $65 billion, plus $65 billion to expand broadband in rural areas and low-income communities. The White House estimates that almost 30 million Americans lack reliable Internet access and one-fourth of the funding would go toward lowering low-income Americans' monthly Internet bills.

Among cybersecurity provisions, the bill establishes a $1 billion grant program between fiscal year 2022 and fiscal year 2025 to assist states and tribal governments in addressing cybersecurity threats. States or tribal governments may also receive grants from the Department of Homeland Security (DHS).

The bill authorizes the DHS secretary could declare an imminent cyber incident in the event of a significant cyber incident or an imminent incident, or if there are insufficient resources for an effective response. Federal agencies, law enforcement, and public and private entities would be involved in the cross-agency response effort if a declaration is announced.

The Buy American Provisions measure instructs federal agency heads to report to Congress and the Office of Management and Budget (OMB) on all infrastructure financial assistance programs. It also specifies applicable domestic content requirements, waivers to those requirements, projects receiving funding, and any projects that do not meet requirements.

To enforce compliance, OMB will establish a "Made in America Office” that will oversee standards and reporting. The General Services Administration (GSA) will establish a BuyAmerican.gov website to publish information about waivers and exemptions to Buy American laws, audits, and contract violations. 

Provisions within the bill also include grants for EPA Recycling Programs, as well as funding for the EPA's Hazardous Substance Superfund.

The Department of Agriculture (USDA) and its Forest Service agency would receive $2.85 billion for the national forest system and $1.53 billion for state and private forestry, with $1.46 billion allocated to DOI for wildland fire management. To prevent, mitigate, and suppress wildfires as well as to restore lands damaged by wildfires, DOI, USDA, and DHS will form a commission to study and provide recommendations.

The Federal Emergency Management Agency’s (FEMA) Building Resilient Infrastructure and Communities program will mitigate assistance for disaster-prone areas and be able to receive ample funding from a variety of sources.

For grants, mapping, forecasting, and other activities, the National Oceanic and Atmospheric Administration (NOAA) would receive $2.61 billion under this measure.

Offsets and Revenue

Through fiscal 2031, the bill would extend mandatory spending cuts, known as sequestration, for one year.

Brokers will be required to report digital assets transactions to the Internal Revenue Service (IRS) beginning in 2023 under the measure. It also requires businesses to report cryptocurrency transactions exceeding $10,000, which is the current threshold for cash transactions subject to IRS reporting requirements. 

Over the next 10 years, cryptocurrency provisions are expected to generate $28 billion in revenue.

Financing for the bill comes from repurposing unspent relief money from the Coronavirus outbreak and from tightening regulations on reporting cryptocurrency investment gains.

Despite President Biden's public and private appeals, and Progressive Democrats insisting they could not back the measure without first voting on the social policy bill, it was delayed. 

“At a certain point, we have to trust one another,” said Rep. Peter Welch (D-VT) following a Progressive Caucus meeting.

According to reports from Bloomberg Government, on August 9, the Congressional Budget Office (CBO) estimated that implementing the Senate negotiators' legislation would increase the deficit by $256.1 billion over a decade; however, that estimate did not include amendments adopted on the floor. Negotiations leaders Senators Rob Portman (R-OH) and Kyrsten Sinema (D-AZ) revealed that they identified $519 billion in offsets that weren't included in CBO's initial estimate.

In the end, the bill secured support after a written commitment of support from centrists on social reform once the fiscal impact was determined.