Biden Administration, Congress Turn Attention to Infrastructure Bill

After signing the $1.9 trillion COVID relief bill into law on March 11, President Joe Biden quickly turned his attention to moving a massive infrastructure package through Congress, outlining a $2 trillion infrastructure and jobs package called the “Build Back Better Recovery Plan” in Pittsburgh March 31.  

President Biden said his proposal would “rebuild the backbone of America,” with massive investment aimed at overhauling America’s aging roads, bridges, rail lines, ports and waterways while boosting manufacturing, mitigating climate change and making key investments in elder care and housing.

Specifically, the plan includes $621 billion for improving traditional infrastructure, as well as additional investments to electrify vehicles, expand internet broadband and make the nation’s infrastructure more resilient to climate change. It would also spend $400 billion to care for the elderly and people with disabilities, $300 billion toward building and retrofitting homes to provide low-income housing that is more energy efficient, and $300 billion on innovation and research.

The administration says the infrastructure spending will help modernize more than 20,000 miles of road, double federal spending on public transportation, lead to the repair of “economically significant” bridges and help lead to the electrification of the nation’s transportation system, including building 500,000 electric vehicle charging stations around the country and replacing diesel buses with electric vehicles.

ILTA echoed Biden’s call for infrastructure spending in a March 31 press statement, with ILTA President Kathryn Clay noting infrastructure’s importance to the liquid terminals industry. “Liquid terminals are connected to many modes of transportation, including ports, harbors, inland waterways, highways, rail and pipelines. All these transportation modes are essential channels for trade and interstate commerce,” she said.

Biden said he wants to finance the infrastructure plan by raising taxes on corporations and the wealthy, faces challenges in Congress where Republicans have expressed opposition and liberals are pressing for more spending.

In the weeks ahead, Biden is expected to unveil a second trillion-dollar proposal focused on child-care, family tax credits and other benefits for students, workers, and the long-term unemployed.

Congressional Democratic leaders plan to bring the infrastructure-specific package to a vote before turning to the second bill that is expected to include proposals such as free community college, universal pre-kindergarten, and a national paid leave program. House Speaker Nancy Pelosi (D-CA) has promised a House vote by July 4. 

The traditional infrastructure package is designed to appeal to Republicans, business leaders and moderate Senate Democrats. There has been a longstanding bipartisan push in Washington for an infrastructure bill.

However, even before the President’s speech, Senate Minority Leader Mitch McConnell signaled harsh Republican opposition: “We're hearing the next few months might bring a so-called infrastructure proposal that may actually be a Trojan horse for massive tax hikes and other job-killing, left-wing policies," McConnell told reporters in late-March. In addition, McConnell has said that he, and by implication the Republican caucus, will not support any infrastructure bill that increases taxes. 

In truth, McConnell has never shown enthusiasm for federal infrastructure spending, even during Republican administrations. In 2020, he dubbed a $1.5 trillion House infrastructure bill that included a provision requiring states to slash greenhouse gas emissions “nonsense … not going anywhere.” Even as Congress rushed through several large spending bills to fight the economic impact of the pandemic, McConnell rejected the inclusion of infrastructure projects on the grounds that they did not directly relate to the coronavirus.

Behind the scenes the administration is still debating whether to try and compromise with Republicans and business leaders on the infrastructure package. That would almost certainly require scaling back or even dropping plans to raise taxes on corporations. A more likely route is moving the sweeping bill through reconciliation, a special parliamentary process that would require only Democratic votes, as Biden did with his COVID relief bill. However, that procedure would not be available until the fall and would require the support of all 50 Democratic senators. Moderate Democrats, including Joe Manchin (D-WV), have already insisted that Biden engage Republicans on the next wave of economic legislation and that tax increases offset any new spending.

Officials are also weighing financing part of the plan through initiatives that would reduce federal spending by as much as $700 billion over a decade. Those plans would reportedly include allowing the Medicare and Medicaid programs to negotiate prescription drug costs with pharmaceutical companies.

The unprecedented scope of the proposal highlights the aggressive and progressive approach President Biden is planning. More controversial than the COVID relief bill, which received no Republican votes in either the House or Senate, infrastructure, especially the second package, is going to be a tough sell in official Washington.