The White House says the infrastructure deal it reached Thursday would provide clean drinking water to 10 million Americans, build 500,000 electric vehicle charging stations across the country, and connect every American to “reliable high-speed Internet.”
The Biden administration said the measure would amount to America’s largest-ever investments in public transit, bridge systems and clean drinking water. It would touch a wide swath of the U.S. economy, from hundreds of billions of dollars for physical infrastructure repairs to stepped up tax enforcement and the electrification of school buses.
The plan is not as sweeping as Biden’s jobs and infrastructure package released this spring, as key provisions were jettisoned to attract GOP support. Environmental experts say it falls far short of addressing the challenge posed by climate change. It entirely excludes the White House’s American Families Plan, which calls for a significant expansion in spending on education and social programs. (Senior Democrats say they are planning on passing these measures in tandem.) Conservatives are also expected to reject the bipartisan package, objecting in particular to higher levels of spending and measures to beef up the Internal Revenue Service.
The plan is light on details, at least from what’s been released publicly, and lawmakers face difficult work ahead in filling in the blanks. For instance, the entire financing section of what the White House released includes no numbers, although some details of what was agreed to have since been confirmed by aides involved in the negotiations. The White House and other lawmakers have repeatedly referred to the agreement as a “framework,” as thousands of pages need to be written and agreed on to spell out what in the current plan exists as only a few sentences.
The contours of the plan reflects compromises from both sides. The spending side of the plan includes primarily centrist policies sought by Republicans and Democrats, including more than $200 billion in new money for physical infrastructure projects such as roads, airports, ports and waterways. The White House also won some meaningful concessions on liberal priorities that some Republican lawmakers could accept as a price of the deal — particularly as much as $100 billion for climate measures, $66 billion for passenger and freight rail, and $55 billion for clean drinking water — that are less important to the GOP.
Here’s what we know so far about what is in the bipartisan deal — and what’s out
$125 billion for roads, highways, bridges, ports and waterways. The single largest part of the package consists of about $109 billion for roads, highways and bridges, according to the White House, as well as $16 billion for the nation’s ports and waterways. That probably comes on top of tens of billions of dollars in a separate transportation bill moving through Congress.
America’s poor “traditional” infrastructure has propelled much of the political momentum for the broader package. The White House has said more than 35,000 people die in traffic crashes on U.S. roads every year — double the rate of Canada and quadruple the European rate. America’s physical infrastructure is consistently ranked as failing by engineering groups, and the White House has said the backlog for repairs runs above $1 trillion.
But fixing those problems will require more than just money, transit experts say, and it is not clear how the $109 billion will be used. The funding could go directly to states, cities and other local governments to repair their roads and bridges. Alternatively, it could be funneled to federal grant programs run by the U.S. government or leveraged to underwrite private projects. Those details will soon be worked out by Congress.
For context, Congress currently spends around $45 billion a year on highways and bridges, so the Biden plan is the rough equivalent of two years of spending added on top of one typical year. Some transportation experts say the money needs to be effectively targeted to ensure it goes to repairing the enormous existing backlog. States currently have incentives to build new, albeit less useful, infrastructure, which means the funding is at risk of being largely wasted. So while extra funding is coming, the upcoming legislative work will be crucial in determining whether the nation can fix some of its worst infrastructure problems, such as the D.C. pedestrian bridge that collapsed on the highway this week.
“It really depends what policy you write,” said Kevin DeGood, director of infrastructure policy at the Center for American Progress, a left-leaning think tank, when asked about the potential impact of the new funding. “If the political incentives are to keep expanding, they’re liable to keep doing that without repairing the stuff they have.”
Close to $100 billion for clean-energy-related projects, but key priorities left out. The bipartisan deal leaves out many White House climate priorities. It does not include the $300 billion in tax credits for renewable energy projects that many experts say are still needed to expand wind and solar production nationwide. It lacks a clean energy standard requiring utilities to obtain a certain percentage of their power from renewable sources, which Biden’s national climate adviser Gina McCarthy has described as the most efficient way of reaching the president’s goal of a carbon-free power sector by 2035.
“There are other things on the environment I want to get done,” Biden said Thursday, adding that he’s “going to fight for $300 billion in tax credits” for renewables as part of a reconciliation bill passed only by Democratic lawmakers.
Still, the bipartisan deal does begin to make progress toward the administration’s climate spending goals, with funding for an energy grid, electric vehicles infrastructure and electrifying the nation’s bus fleet, among other measures.
The most significant climate-related provision is $73 billion for “power infrastructure, including grid authority.” The Biden administration has said it wants to accelerate a transition to clean and renewable energy sources, such as wind and solar power. But even as the cost of producing these alternative energy sources has plummeted in recent years, the United States has had trouble connecting the new supply of renewable energy — often in the windy Midwest or the sunny South — to where energy demand is highest, such as big cities on the East Coast. The money for the electric grid will accelerate that process, by providing billions of dollars to build transmission lines across the country. Again, however, key details about how the money will be used remain unclear, and it is possible large chunks of the funding could go to fund “demonstration projects” in newer energy sources such as hydrogen.
“You have to connect wind and solar to where the demand for the electricity is,” said Aliya Haq, vice president for U.S. policy and advocacy at Breakthrough Energy, Bill Gates’s climate organization. “It takes 10 years to build these transmission lines, so it’s crucial that we move on it now.”
The bipartisan compromise also includes $7.5 billion for electric vehicle chargers, which the White House says “will accomplish the president’s goal” of building 500,000 electric vehicle charging stations, as well as $7.5 billion for “electric buses/transit.” That funding appears to fall below the administration’s plan to electrify 20 percent of the nation’s school buses. The measure would authorize a Grid Deployment Authority at the Energy Department to speed the use of existing rights of way along roads and railways, a move that will be critical to expanding the transmission of renewable energy.
Financed through IRS enforcement, hodgepodge of other measures. No issue proved more intractable for the bipartisan infrastructure negotiations than deciding how to pay for it. The White House initially pushed higher taxes on the rich and corporations, an approach ruled out by Republicans. Republicans pushed higher gas taxes and fees on vehicles, an approach ruled out by the White House. That created an impasse that almost tanked negotiations.
The compromise deal includes a hodgepodge of measures — the largest of which consists of increasing the IRS budget by $40 billion to raise an additional $140 billion in revenue through more aggressive tax enforcement, according to two people who spoke on the condition of anonymity to discuss details of the deal that had not yet been publicly released. The other biggest measures include more than $100 billion in cuts to unemployment benefits and more than $100 billion from selling public infrastructure to private interests.
The specifics of how the IRS would ramp up enforcement under the deal remain unclear. But it amounts to a significant concession from GOP negotiators, granting the White House approximately half of its initial $80 billion request to beef up funding for the agency. The vast majority of Senate Republicans oppose giving more money to the agency, amid conservative fury over the leak of private tax data showing the wealthy pay low tax rates, according to Jason Pye, a federal lobbyist with ties to the conservative movement.
The plan is also financed by measures probably opposed by liberals. Those include more than $80 billion in cuts to unemployment benefits from implementing “program integrity” safeguards intended to prevent fraud, two people familiar with the matter said. A White House official said that this funding is expected to come from improving state unemployment systems, which were exposed as badly dysfunctional during the economic crisis caused by the pandemic. Separately, the deal includes saving about $25 billion in recouped funding in unemployment benefits from the $1.9 trillion stimulus in states where Republican governors have already shut down the extra benefits. The cuts will not affect unemployment benefits in states where the unemployment benefits are continuing, a White House official said.
Beyond the unemployment funding and IRS enforcement, the bipartisan plan relies on an extension of expiring user fees, a “superfund” tax on chemicals, sales from the U.S. strategic petroleum reserve, and the auction proceeds from 5G spectrum sales.
Public transit, passenger and rail. The measure also included $49 billion for public transit, as well as $66 billion for passenger and freight rail. The White House said the passenger rail investment would be the largest since the creation of Amtrak. Again, there are few details about precisely how the rail funding would be invested.
Critics have long pointed out that the United States has fallen far behind its international rivals, particularly China, in providing high-speed rail. The U.S. only has about 54 miles of “high-speed” rail, compared with more than 3,000 in Spain, Japan, France and Germany, as well as more than 26,000 miles in operation in China, according to a 2018 report from the Environmental and Energy Study Institute. Congressional Democrats have made the issue a top priority, with Reps. Seth Moulton (D-Mass.) and Alexandria Ocasio-Cortez (D-N.Y.) urging the White House to push for very fast trains.
“Making only modest investments to existing rail service would provide travelers with an attractive alternative to driving, but would not improve overall travel times enough to generate anywhere near this scale of economic benefits,” the lawmakers wrote.
The bipartisan plan is unlikely to lead to the creation of thousands of miles of high-speed rail service similar to, say, the ultrafast bullet train in Japan. Part of the reason is that land use and geographic constraints pose major hurdles to the creation of that infrastructure — issues not resolved simply by approving more funding, according to transportation experts.
But the rail money could go a long way to improving speeds and performance of rail service. The funding could facilitate high-speed rail between nearby urban centers, such as from Raleigh, N.C., to Richmond. The Obama administration spent only about $11 billion on passenger rail, and the infrastructure plan means Biden will almost certainly spend significantly more. Even without a bullet train, dramatically improving or expanding Amtrak-like service could reduce carbon emissions and improve commutes for millions of people.
“You make incremental improvements and every incremental improvement allows better on-time performance with higher speeds,” said DeGood, the infrastructure expert at the Center for American Progress.
