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What the 2021 American Jobs Plan Means for Infrastructure in the U.S. — And Your Construction Company
The United States is at the doorstep of the largest infrastructure spending package —The 2021 American Jobs Plan — in its history. The original bill, 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. If passed, 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.
The Latest Updates on the ‘American Jobs Plan’ Infrastructure Bill
The American Jobs Plan that the Biden Administration put before Congress is at the core of the latest 2021 infrastructure spending plans. Spending on this bill has been proposed over an eight year time period, funded by potential corporate tax increases and other measures spread across 15 years.
Since the introduction, the proposal has been debated vigorously in Congress, with both sides of the political aisle offering their own alternatives. In late June, the White House announced it had reached a deal with a bipartisan group of 21 senators on a $1.2 trillion infrastructure plan, with more than $900 billion potentially devoted to construction infrastructure projects.
"We have a deal," Biden said in a speech to media June 24. "We all agree that none of us got all we wanted. I clearly didn't get all I wanted, they gave more than I think maybe what they were planning to give in the first place ... Bipartisan deals mean compromise."
Meanwhile, the House 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.
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.
Congress has not voted on any version of the proposed bill yet, and we don’t have a timeline for debate or a vote, but we could see significant movement by mid- to end-summer 2021. Of course this comes with the caveat that the proposal is subject to changes along the way.
As of June 10, a number of potential variants of the American Jobs Plan, including scaled down packages and alternate bills have been floated and debated among Congress. One of the first was a bipartisan deal agreed to in June by a group of 10 Senators. In that deal, a spending package was unveiled that would invest $1.2 trillion in infrastructure over the next eight years. This version of the bill, the bipartisan group noted, would not raise corporate taxes, but find funding from other existing sources. Meanwhile, the The House Transportation and Infrastructure Committee did advance the INEVST in America Act, a five-year, $548 billion deal focused on transportation projects. This bill is expected to be heard on the full House floor in July. The larger bipartisan agreement with the White House in late June also featured the $1.2 trillion spending target, with $579 billion in designated new spending for physical infrastructure such as roads, bridges, rail, broadband internet, water and sewer pipes and electric vehicles. The bipartisan agreement also proposes several ways to pay for the spending that avoid both a gas tax increase and a corporate tax hike.
The site ForConstructionPros.com in mid-June also published an article, "Where Does Biden's Infrastructure Bill Stand," which breaks down where both sides of the political aisle have come together and the areas they are still far apart on with regard to infrastructure spending. It includes a timeline of events surrounding the American Jobs Plan thus far.
Latest News Stories:
- 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 breaks down some of the tax implications and which areas they might impact the most in a recent article: Corporate Tax Rate Could Jump from 21% to 28%. This is likely to be a significant sticking point for financial conservatives in Congress, who have been opposed to corporate tax hikes since they were dropped to 21% in 2017. Still, as 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. A smaller, $1.2 trillion deal agreed to by a bipartisan group of Senators in June aims to not increase any corporate taxes.
Most contractors, though, won’t pay more taxes under Biden’s 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).
The June 24 agreement between the White House and a group of 21 bipartisan senators for a $1.2 trillion package is expected to identify funding sources without raising corporate taxes or gas taxes.
Meanwhile, billions of dollars flowing to civil projects and even general and specialty construction projects over the next eight years, represents the potential for significantly increased revenue and profit in the short- and long-term future.
What is the Timeline for the 2021 Jobs Plan?
According to NBC News, The current administration wants to see Congress pass the proposal by the end of this summer, and he and other supporters of the bill have been holding bipartisan meetings with Congressional leaders to encourage support, as well as hammer out potential roadblocks, including compromises with the proposed corporate tax rate.
If the American Jobs Plan — 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 American Jobs Plan and 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.