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The Clock is Ticking on a Infrastructure Spending Deal: What That Means for the United States — And Your Construction Company
The United States is at the doorstep of potentially the largest infrastructure spending package in its history. The original bill, the American Jobs Plan, brought forth by the Biden Administration, had the potential for between $1 trillion and $3 trillion in public works, utility, transportation, energy and other vital infrastructure projects. Since it's introduction though, the bill has been scaled back to a $1.2 trillion proposal that has seen bipartisan support. On August 10, 2021, that proposal reached a significant milestone with its passage through the senate. If passed in the House and signed by President Biden, the infrastructure spending plan will benefit contractors for years to come — but only if they’re prepared to meet modern demands with real-time data, digitization, leading-edge technology adoption.
Debate, Delays Continue Through Mid-October:
In late-September, the fate of a $1 trillion-plus infrastructure deal hung in the balance in the full House of Representatives, as House Speaker Nancy Pelosi shifted a potential Sept. 26 vote to Sept. 30, then to Oct. 1. As of mid-October, however, the infrastructure bill—and the passage of a separate $3.5 trillion bill to provide funding to fight climate change, address home health care and a host of other socio-economic measures—were both stalled. The fate of the infrastructure bill has been held up until action on the larger bill is taken. Some progressive members of the Democrat Party have said they would not support the infrastructure bill unless the full $3.5 trillion spending package attached is also approved. This, and the expectation that many Republican leaders in Congress would vote against both bills for being too costly meant Pelosi could only delay the infrastructure measure. The Senate, however, did pass the infrastructure bill in it’s chambers by a 69-30 margin.
Since neither of the bills were passed by the Oct. 1 deadline, and remained in flux as of October 15, Pelosi is reportedly looking a new Oct. 31 deadline. The larger, $3.5 trillion bill, Politico notes, would not need GOP votes to pass through Congress because of it's framework as a reconciliation bill. Though it would need full support of Congressional Democrats.
The Associated General Contractors of America (AGC) issued a statement Sept. 29 calling for both parties in the House to support the infrastructure bill: “This is the kind of infrastructure bill that Democrats and Republicans have been promising to pass for years now,” said Stephen E. Sandherr, the association’s CEO. “Failing to pass this measure will create new challenges for the economy.”
The AGC is one of scores of organizations and associations ramping up pressure on elected officials to get the infrastructure bill passed.
Infrastructure Spending Deal Hits Significant Milestone with Aug. 10 Senate Passage
The original American Jobs Plan that the Biden Administration put before Congress is at the core of the latest 2021 infrastructure spending plans. Spending had been proposed over an eight year time period, funded by potential corporate tax increases and other measures spread across 15 years.
For moments over the past six months, it looked like any infrastructure bill was in danger of failing, with both sides of the political aisle clashing on exactly what an infrastructure package should include. However, the Senate passed a $1.2 trillion version of the bill, now called the Infrastructure Investment and Jobs Act, on Aug. 10. This bill would feature $550 billion in new federal spending over a five-year span. Included is:
- $110 billion in roads, bridges and major projects
- $66 billion in passenger and freight rail
- $65 billion to rebuild the electric grid
- $65 billion to expand broadband internet access
- $55 billion for water infrastructure ($15 billion of that dedicated to replacing lead pipes)
- $39 billion to modernize and expand transit systems
- $7.5 billion to build a national network of charging infrastructure for electric vehicles
The current bill will now head to the full House of Representatives, where it is ultimately expected to pass. Though an actual vote on the bill could be delayed until the Fall, as The House is out for August recess and Speaker Nancy Pelosi has indicated that the chamber won't take up the bipartisan infrastructure bill until the Senate also passes a separate $3.5 trillion bill providing funding to fight climate change, address home health care and other issues. This could lead to a political stalemate as both sides of the aisle debate this measure first. That larger bill, Politico notes, would not need GOP votes to pass through Congress because of it's framework as a reconciliation bill. Though it would need full support of Congressional Democrats.
The House also passed its own version of an infrastructure bill — a $715 billion measure — just before the July 4 holiday. This bill, laid out over a five-year period would focus a lot of the spending around road and bridge projects ($343 billion) transportation ($109 billion), drinking and wastewater treatment ($168 billion) and other environmental measures that were scrapped out of the bipartisan Senate proposal. It remains unclear how this proposal will be addressed, or if the new, larger bipartisan agreement will supersede this measure.
Another $213 billion had been earmarked for affordable and sustainable housing projects, $400 billion for healthcare projects and $100 billion for workforce development. Additional areas of potential spending included $100 billion-plus for school and education facilities; $180 billion dedicated to research and development, science and climate programs; and $300 billion in manufacturing, small business and labor programs.
Latest News Stories:
- 10.14.21: Digital Divide Fix at Risk as $1.2 Trillion Infrastructure Bill Stalls (CNET)
- 10.11.21: Native American Tribes Push to Get Biden's Infrastructure Bill Passed (NPR)
- 10.11.12: Biden Faces Pressure to Pass Infrastructure Bills Before Climate Summit (The Hill)
- 10.2.21: Pelosi Shifts Infrastructure Bill Deadline to October 31 Amid Biden Frustration (The Guardian)
- 9.26.21: Pelosi Sets Thursday Vote on Infrastructure, Eyes Smaller Social Spending Bill (Reuters)
- 9.26.21 Pelosi Announces Vote on $1 Trillion Bipartisan Infrastructure Bill (New York Times)
- 9.2.21: Hurricane Ida Destruction Could Lift Infrastructure Bill Hopes (FOX Business)
- 8.31.21: These Charts Show Which States Get the Most Money From Biden's Infrastructure Bill (CNBC)
- 8.25.21: Majorities Back Biden Spending Plan, Infrastructure Bill: Poll (The Hill)
- 8.25.21: Schumer: Infrastructure Bills Would Curb Emissions by 45 Percent (Politico)
- 8.24.21: Infrastructure Bill Winners: Highways Conceived Decades Ago (E&E News)
- 8.18.21: People in Rural Pennsylvania are Desperate for Internet. Biden's Infrastructure Bill Could Help (Philadelphia Inquirer)
- 8.16.21: Infrastructure Bill Contains Highway Expansion to Connect 12 Military Bases in Five Southern States (Military.com)
- 8.10.21 5 Things You Didn't Know Were in the Infrastructure Bill (CNN)
- 8.10.21: Senate Passes Bipartisan Infrastructure Bill — But What Comes Next Won't Be Easy (Politico)
- 8.10.21: The Senate Approves the $1 Trillion Bipartisan Infrastructure Bill in a Historic Vote (NPR)
- 8.10.21: U.S. Senate Passes Bipartisan $1 Trillion Infrastructure Bill (Reuters)
- 8.9.21: Democrats Release $3.5 Trillion Budget Resolution, Which Doesn't Include and Increase to the Debt Limit (CNN)
- 8.9.21: U.S. Senate Trudges Toward Passing $1 Trillion Infrastructure Bill (Reuters)
- 8.9.21: Biden's Infrastructure Bill on Cruise Control to Senate Passage (Politico)
- 8.4.21: Despite Dodging Tax Hikes in Infrastructure Bill, Contractors Could Still See Higher Rates (Construction Dive)
- 8.2.21: What's in the Bipartisan Infrastructure Package...And How Will We Pay for It? (ForConstructionPros.com)
- 7.28.21: Senators Real Deal on Major Points of U.S. Infrastructure Bill (Reuters)
- 7.20.21: Big Infrastructure Bill in Peril as GOP Threatens Filibuster (Associated Press)
- 7.19.21: Senate Infrastructure Bill Drops IRS Funding, Raising Pressure for New Revenue (Wall Street Journal)
- 7.13.21: U.S. Senate Democrats Agree to $3.5 Trillion for Budget Reconciliation Bill (Reuters)
- 7.12.21: Congress is Watering Down the American Jobs Plan — and Our Infrastructure Will Pay the Price (Popular Science)
- 7.12.21: Why the American Jobs Plan Would Benefit Coal-Heavy Utility Stocks (Forbes)
- 7.1.21: House, Setting a Marker for Talks, Passes $715 Billion Infrastructure Bill (New York Times)
- 7.9.21: Senate May Work into August to Pass Infrastructure Plan, Set the Stage for Huge Spending Bill (CNBC)
- 7.1.21: Which Biden priorities are not included in the bipartisan infrastructure deal? (Washington Post)
- 6.27.21: Bipartisan Infrastructure Deal Back on Track After Walk-Back (Associated Press)
- 6.26.21: Construction Stocks See Boost From Biden's $973B Infrastructure Spending Bill (Detroit Free Press)
- 6.25.21 $973B Bipartisan Infrastructure Deal Focuses on Roads, Bridges and More (Construction Dive)
- 6.24.21: Biden, Senators Agree to Infrastructure Deal (USA Today)
- 6.24.21: Infrastructure Spending Promises Boost for Industry (ABC News)
- 6.24.21 How Biden's Infrastructure Plan Would Affect Key Areas of American Life (CNN)
- 6.23.21 Can Congress Finally Agree on a Bipartisan Infrastructure Package? (Construction Executive)
- 6.22.21: North American Construction Group Embarks on Largest Infrastructure Project in Its History (ConstructConnect)
- 6.21.21: How Women Can Tap into Billions in Biden's Infrastructure Spending Bill (Forbes)
- 6.16.21: Where Does Biden's Infrastructure Bill Stand? (ForConstructionPros.com)
- 6.11.21: What We Know About the Bipartisan Infrastructure Deal (CNN)
- 6.10.21: Bipartisan Senate Group Announces Infrastructure Deal (The Hill)
- 6.9.21: U.S. Businesses Warn Crumbling Infrastructure is Hurting the Economy (CNN)
- 6.9.21: Where do infrastructure talks go from here now that Biden’s negotiations with Republicans collapsed? (USA Today)
- 6.7.21: Even Modest Infrastructure Investment Could Send Commercial Construction Outlook Soaring (ForConstructionPros.com)
- 5.27.21: Senate Republicans Release $928B Infrastructure Counteroffer (NPR)
- 5.24.21: GAO Issues Guidance on Building Resilient Roads & Highways (ForConstructionPros.com)
- 5.22.21: White House Drops Price Tag of Infrastructure Proposal in Counteroffer to GOP Lawmakers But Wide Divide Remains (CNN)
- 5.19.21: House Republicans Introduce $400B Transportation Bill as Another Option on Infrastructure (CNBC)
- 5.19.21: American Rescue Plan Offers $350B in Funds for Transportation (Construction Business Owner)
- 5.18.21: Sens. Lummis, Kelly Introduce a Bill to Study Changes in Highway Use (Transportation Today)
- 5.13.21: Shutdown Ordered for Cracked I-40 Bridge in Memphis (New York Times)
- 5.12.21: White House Says American Jobs Plan Will Address Cybersecurity Amid Pipeline Disruption (Yahoo News)
- 5.12.21: Biden Open to Passing Parts of His Jobs Plan Without GOP Support (NBC News)
- 5.7.12: California Transit Association Submits Recommendations for American Jobs Plan (Mass Transit Magazine)
- 5.6.12: SEIU Launches $3M Ad Buy to Promote American Jobs Plan (The Hill)
- 5.4.21: Transportation Secretary Expects to See "Real Movement" on Infrastructure this Month (ForConstructionPros.com)
- 4.30.12: 4 Ways The "American Jobs Plan" Could Rebuild the Infrastructure of Disabled Peoples' Lives (Forbes)
- 4.29.21: Road Builders to Benefit Most from Infrastructure Deal, Economist Says (Construction Dive)
- 4.29.21: President Pushed New Jobs, Infrastructure, Policing Initiatives in COVID-Era Speech to Congress (USA Today)
- 4.26.21: Democratic Whip Warns Against Splitting Up Biden's Infrastructure Plans (Politico)
- 4.25.21: Pivotal U.S. Senate Democrat Wants 'More Targeted" Infrastructure Bill (Reuters)
- 4.24.21: Republicans Look to Slash the Size of Biden's Infrastructure Plan (New York Times)
- 4.23.21: Putting 'An Offer on the Table,' Republican Senators Unveil $568 Billion Infrastructure Plan (Construction Dive)
- 4.22.21: What Contractors Should Know Before Going After Public Projects (Construction Dive)
- 4.21.21: Buttigieg Defends Climate Elements of American Jobs Plan (Construction Dive)
- 4.20.21: Coal Miners Join Climate Activists to Back Biden’s $2 trillion Infrastructure Plan (CNN Business)
- 4.20.21: PRO Act One Step Closer to Vote with Sen. Manchin’s Backing (Construction Dive)
- 4.19.21: Smaller Corporate Tax Increase Floated at White House Infrastructure Meeting (Wall Street Journal)
- 4.19.21: Most Contractors Won’t Pay More Taxes Under Biden’s Infrastructure Plan: CPA (Construction Dive)
- 4.19.21: Biden Says He’s Willing ‘To Compromise” with Republicans on Infrastructure Bill (The Guardian)
- 4.18.21: On Infrastructure, Lofty Ideas are Colliding with Congressional Reality (Washington Post)
- 4.15.21: White House Identifies the 7 Worst States for Infrastructure (Construction Dive)
- 4.14.21: Trottenberg Confirmed as Deputy Secretary of Transportation at USDOT (Mass Transit Magazine)
How the Infrastructure Package will Impact Construction
Will Your Taxes Increase?
Arguably the biggest challenge with the bill passing will be the impact it has on American business. Forbes broke down some of the tax implications of the original American Jobs Plan and which areas they might impact the most in a recent article: Corporate Tax Rate Could Jump from 21% to 28%. Forbes notes, the 7% jump would help fund the infrastructure bill while remaining below the 35% corporate tax rates seen under Presidents Clinton, Bush and Obama. The $1 trillion deal agreed to by the Senate in August aims to not increase any corporate taxes.
Most contractors, though, wouldn't have paid more taxes under Biden’s original infrastructure plan, according to Construction Dive. The article cites Accountant Erin Roberts of Ernst & Young's global construction and engineering practice, who notes that the majority of construction firms in the U.S. are set up as “pass-through” entities and are not subject to corporate taxes. “According to Construction Dive, “Just 16% of nonresidential construction businesses in the U.S. are registered as C corporations, and thus subject to corporate tax rates. The lion’s share of the remaining 84% is comprised of S corporations, sole proprietorships and partnerships that are treated as pass-through entities, where their owners pay taxes on their profits at the individual rate.” (See this U.S. Census Bureau report for more information).
What is the Timeline for the 2021 Jobs Plan?
With the Aug. 10 passage of the $1 trillion Infrastructure Investment and Jobs Act, the stage is set now for a vote in the House of Representatives this fall. Though a vote could come earlier, a larger $3.5 trillion spending package for environmental and healthcare issues is directly tied to the passage of the infrastructure bill politically.
If the infrastructure spending bill — in whichever form it takes — passes, projects are expected to be identified and rolled out over an eight-year period, with the most critical needs being addressed first. That means contractors still have some time to start preparing their organizations now, but those ready to meet modern demands today are poised to reap immediate benefits.
What are some of the biggest voices in the construction industry saying about the future of infrastructure building? Here are a few perspectives:
AGC Supports AASHTO Request for Robust Funding for an Infrastructure Package: The Associated General Contractors (AGC) said in this press release that it supports calls by the American Association of State Highway and Transportation Officials and other stakeholders for Congress to authorize $200 billion in highway and bridge stimulus funding and an additional $487 billion for federal highway infrastructure as part of the overall infrastructure bill.
Biden Infrastructure Plan Rife with ABC-opposed Labor Policies: The Associated Builders and Contractors, while supportive of bipartisan efforts to address the nation’s infrastructure issues, the organization is opposed to the American Jobs Plan's inclusion of the Protecting the Right to Organize Act (PRO), which would guarantee union and bargaining rights for public service workers. ABC said the PRO Act “threatens the fundamental rights of workers and job creators while putting the recovery of our economy at risk.”
Infrastructure Construction Experts Stress Digitization, Collaboration as Keys to Success: The first of the new quarterly Trimble Dimensions Spotlight Series highlights U.S infrastructure needs and expectations, how heavy and civil contractors are modernizing to meet needs and much more.
ENR Editorial: How to Pass a True Infrastructure Bill: Engineering New Record’s (ENR) editorial board, in a recent opinion piece, looked at where it felt the infrastructure bill in its current form could stall and suggested areas of the American Jobs Plan that could be cut or removed in order to secure more across-the-board support by Congress.
ACPA and TCC Allies Roll Out Infrastructure Investment Campaign: While not mentioning the American Jobs Plan specifically, the American Concrete Paving Association, part of 32 groups and associations that make up the Transportation Construction Coalition, has launched an advertising and social media campaign to build awareness for infrastructure investment and encourage Congress to approve a surface transportation infrastructure package.
Trimble CEO on How It Could Benefit from Infrastructure Spending: In this interview with CNBC, Trimble CEO Rob Painter talks about the importance of a potential infrastructure spending package for the nation, both in terms of fixing infrastructure and sustainable job growth. Painter talks about how technology will play a huge role in infrastructure projects by modernizing workflows and boosting productivity. Watch the interview below.
Dave Steel Company on Infrastructure Construction and Industry Trends: Watch Dave Steel Company Executive Vice President Babette Freund talk about the infrastructure bill before Congress and technologies and trends for infrastructure-centric contractors.
Construction Infrastructure Resources:
While the bulk of work to come from a major infrastructure spending bill will apply to heavy highway and civil construction firms, there are also opportunities for general and specialty contractors as well.
Viewpoint is committed to helping all contractors transform their operations through leading-edge technologies to meet modern demands head on. Here are some key reads and resources to consider in your own journey to take your business to the next level:
The Heavy Highway Contractor’s Guide to Selecting Construction Software: Most contractors know they need to modernize, but where do you begin? This step-by-step guide shares all of the technology transformation tips and best practices to consider.
Is Your Business Ready for the Next Big Project Your About to Win? The potential for a financial windfall of work awaits heavy and civil contractors, but how ready is your organization to take on more complex, demanding projects. Take this quiz and find out!
The Cost of Doing Nothing — 5 Reasons to Upgrade Your Construction Software: When it comes to today’s construction and infrastructure projects, just getting by with disconnected and manual processes may not be good enough to meet modern demands. Learn how to go beyond good enough.
The Construction Labor Shortage Toolkit: Finding skilled labor and attracting new talent to the industry is one of the construction industry’s biggest challenges. This informative toolkit will give you some best practices to put in place to attract — and retain — the right talent for your jobs.
The Construction Financial Professional’s Guide to Data-Driven Business Decisions: Data analytics and business intelligence is going to play a much greater role in infrastructure construction projects moving forward. How deep into your data can you dig now and do you have the right data tools in place to answer on-demand data needs?
Hunter Contracting: Arizona heavy highway and public works contractor streamlines financial and operational workflows with cloud-based Spectrum solution.
Precision Concrete: Georgia concrete contractor expects six-figure cost savings in moving to the connected ViewpointOne suite.
ER Snell: Why this Atlanta-based asphalt and concrete contractor moved to the cloud with ViewpointOne after enduring a ransomware attack.
Great Basin Industrial: How this Utah- and Texas-based civil contractor leveraged integrated field ticketing and construction accounting to increase billing and improve cash flow.
Baldwin Paving: Learn how Georgia-based Baldwin Paving took control of it’s equipment workflows and costs with cloud-based Spectrum solution.