On April 22, a group of Republican Senators, including the Ranking Member of the Committee on Environment and Public Works, which handles infrastructure matters, released a two-page framework to spend $568 billion over five years on infrastructure programs and initiatives (the “Roadmap”)—a response to the American Jobs Plan (the AJP) released by the Biden administration on March 31 and discussed in our prior client alert, “Major Biden Administration Infrastructure and Jobs Plan Released.” In his first annual address to a joint session of Congress on April 28, President Biden applauded this effort and indicated he would work across the aisle to discuss and negotiate the respective plans.
The Roadmap differs from the AJP in several key ways. First, the spending proposed by the Roadmap should not be considered “apples-to-apples” with the proposed investments in the AJP. The programs that provide federal funding for surface transportation expenditures by the states and local governments—last authorized by the Fixing America’s Surface Transportation (FAST) Act in 2015—are due to expire on September 30, having been extended by one year last September. Unlike the AJP, the $568 billion top line number in the Roadmap includes amounts already programmed for such reauthorization of surface transportation programs, generally with slightly higher spending than current allocations, and other existing formula programs and discretionary spending. The Roadmap calls for bipartisan agreement through ordinary process on the reauthorization. The AJP, in contrast, proposes numerous investments that supplement existing surface transportation program spending, though it is unclear how new programs would be authorized.
Second, in contrast to the AJP, which proposes investments over a wide range of “core” and “non-core” infrastructure programs, the Roadmap’s scope is limited to more traditional transportation and water infrastructure spending, with the addition of a substantial new investment in broadband development. Notably the Roadmap does not contain any counterproposal to: (a) the AJP’s focus on clean and renewable energy and climate change mitigation, demonstrated by a proposed $174 billion for electric vehicle initiatives, $100 billion for power infrastructure and $50 billion for climate resilience infrastructure; or (b) the AJP’s plans for housing, manufacturing, research and development, public schools and social spending.
Finally, unlike the AJP and the related Made in America Tax Plan (which proposes tax increases as the principal “pay-fors”), the Roadmap does not include a detailed revenue proposal designed to offset the cost of new infrastructure investments. Instead, it broadly indicates that federal pay-fors should be included in order to avoid increasing the national debt. It also suggests that “all users of certain types of infrastructure (e.g., electric vehicles)” should contribute to revenue generation, implying a willingness to consider a vehicle-miles-traveled tax. Notably, the Roadmap also states private sector investment and the utilization of financing tools should be encouraged, which suggests reliance on public-private partnerships (P3s) or other alternative delivery tools. The Roadmap would preserve the Tax Cuts and Jobs Act of 2017 and avoid any increases to corporate or international taxation.
The Roadmap is the Senate GOP’s opening bid for the development of an infrastructure bill this year and establishes that committee leadership views the reauthorization of surface transportation programs as the appropriate legislative vehicle to negotiate infrastructure spending. We expect that key congressional members and administration officials will now begin to discuss whether a path forward for a bipartisan approach is attainable, and if so, how to achieve consensus. However, the gaps between the AJP and the Roadmap—not only in terms of total spending, but also in scope, focus and pay-fors—suggest that broad agreement will be challenging. One potential outcome is a dual-track process whereby reauthorization of surface transportation programs generally adopting existing parameters is negotiated on a bipartisan basis while congressional Democrats pursue the AJP’s additional proposals through the budget reconciliation process. We will provide further updates as proposed legislation takes shape.
Below we provide the Roadmap’s proposed investments in transportation, water and broadband infrastructure spending.
Transportation Infrastructure – $454 billion
- $299 billion for roads and bridges
- $61 billion for public transit system
- $44 billion for airports
- $20 billion for rail
- $17 billion for ports and inland waterways
- $13 billion for safety programs
Broadband Infrastructure – $65 billion
Water Infrastructure – $49 billion
- $35 billion for drinking water and wastewater
- $14 billion for water storage