At the end of last week, the House of Representatives passed its version of a sweeping social infrastructure bill, nicknamed Build Back Better, sending provisions that would fund programs from renewable energy to affordable housing to the Senate. Over the next month or more, senators will hammer out the exact contours of the $1.75 trillion legislation.
Earlier in the week, President Biden signed into law the $1.2 trillion Bipartisan Infrastructure Framework, or BIF. Known formally as the Infrastructure Investment and Jobs Act, the new law includes $550 billion in new spending for a broad range of physical infrastructure on top of a five-year reauthorization of expiring traditional surface-transportation infrastructure programs for highways, rail and transit.
Here is how the massive investment in infrastructure represented by the BIF — the largest in decades — will likely be spent, and a look at what comes next for the Build Back Better bill now in the Senate’s hands.
What Is in the BIF and What Does It Fund?
While the reauthorization of the existing infrastructure programs alone represents a significant federal investment in America’s infrastructure, it is the BIF’s unprecedented additional spending above the current infrastructure baseline and its ambitious timetable that make the law such a notable achievement.
The BIF covers fiscal years 2022-2026. Much of the funding will flow to or through state governments. The goal is to harness existing state government programs and offices to help properly and expeditiously allocate these funds to address infrastructure needs. These programs reinforce the belief that states and local governments are better able to decide which bridges and highways get repaired, which water systems are upgraded, where to site electric vehicle charging stations and where transmission lines should be built, among other key decisions.
However, the authority of the executive branch of the federal government to preside over the distribution of new infrastructure spending is dramatically expanded as a result of the BIF. Recognizing the overall management challenge presented by an initiative of this size and complexity, and the expectation of careful congressional oversight of this spending, President Biden appointed former New Orleans Mayor Mitch Landrieu to oversee implementation of the BIF.
The Department of Transportation will be the primary federal department responsible for the infrastructure effort. Unlike past surface-transportation bills, the secretary will retain wide discretion to allocate a significant portion of the funds — approximately $120 billion. In addition to DOT, other federal agencies will also deliver programs and funds within their jurisdiction. For example, the Department of Energy will manage modernizing and strengthening of the electric grid. The Department of Commerce will supervise the expenditure of tens of billions of dollars to deploy rural broadband. The Environmental Protection Agency is tasked with a major investment in clean drinking water programs to be implemented by the states, tribes and territories.
What Are the Specific Numbers Above the Current Baseline?
Transportation: $284 billion:
- Road and bridge improvement and replacement: $110 billion
- Public transit: $39 billion
- Passenger and freight rail: $66 billion
- Safety: $11 billion
- Airports: $25 billion
- Ports: $17 billion
- Electric vehicle charging infrastructure: $7.5 billion
- Electric buses and ferries: $7.5 billion
- Reconnecting communities divided by highways: $1 billion
Water system upgrades (including lead pipe replacement): $55 billion
Broadband deployment to connect the unconnected: $65 billion
Electric grid modernization and power generation innovation: $73 billion
Environmental remediation of hazardous sites and abandoned mines: $21 billion
Western water storage, conveyance, repairs and upgrades: $8.3 billion
Resiliency – coastal and flood mitigation, cybersecurity, drought, weatherization: $46 billion
What Infrastructure Provisions Are in the Second Bill Currently Being Debated?
While the scope and size of the Build Back Better bill will undoubtedly change from its approximately $2 trillion size as the bill moves to Senate deliberation in December, it is instructive to look at the infrastructure sectors included in this second major spending bill.
The House bill includes additions and expansions of social safety net programs (such as child care, health care and education), but also addresses energy policy and climate change in an extensive fashion. Specifically, the bill uses incentives and tax credits to help achieve the White House’s aggressive greenhouse gas emission-reduction targets. These include $110 billion in incentives for clean energy technology, green manufacturing and strengthened supply chains for renewable energy. The bill also provides $320 billion in clean energy tax credits to promote clean energy deployment, energy efficiency and vehicle electrification. While the Senate will consider and likely alter these amounts, any final legislation will likely include a historically massive investment to move the country toward a lower carbon economy.
For a detailed breakdown of the bill's provisions, click here.
When Will Build Back Better Be Signed by the President?
With a slim three-vote majority in the House and a 50/50 Senate, Democrats essentially need unanimity to deliver President Biden the Build Back Better bill for his signature. Speaker Pelosi successfully threaded the eye of a needle to pass Build Back Better out of the House. In the Senate, where the agenda is already crammed with deadline-driven issues, Democrats will seek to shape the bill in both subtle and crude ways in response to the demands of their diverse caucus. Negotiators will look to pass the revised bill through the Senate before the end of the year and to send it back to the House for likely final approval, perhaps slipping into early 2022.
What Is Likely to Happen Next?
In the short term, expect a concerted effort at the DOT and other federal agencies to ramp up staffing to help manage BIF programs. Agency leadership has suggested the need for a significant amount of hiring just to deal with these responsibilities. It will clearly take time for a workforce that is already stretched thin to prepare to address what is expected to be an avalanche of discretionary grant applications across the federal government. In addition, shortly after we move into 2022, we can expect to see an articulation of the types of projects that the Biden administration will encourage in the newly authorized spending, with a likely continued emphasis on environmental justice/equity issues and climate initiatives, as well as a continued emphasis on fixing ongoing supply chain problems.