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Infrastructure Spending Deal Reaches Major Milestone: What That Means for the United States — And Your Construction Company

With a massive infrastructure bill on the table, American heavy and civil contractors could see significant work coming their way

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.

Infrastructure Spending Deal Hits Significant Milestone with Aug. 10 Senate Passage

Transportation projects like high-speed rail lines are part of the $1 trillion infrastructure package.

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. 

Utilities projects like water and sewer are high priorities for communities where current infrastructure is failing.

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.

The Biden Administration broke down its original goals with the American Jobs Plan in this White House Fact Sheet and Business Insider also provided a comprehensive breakdown of these figures here:

Latest News Stories:

Check back here to stay on top of the latest infrastructure construction headlines.

How the Infrastructure Package will Impact Construction

With significant funding coming in the form of proposed corporate tax increase measures, the American Jobs Act will be hotly debated in Congress.

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).

A hard timeline for a vote on the American Jobs Act has not been established.

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.

Industry Perspectives:

Most within the construction ecosystem agree significant infrastructure spending is needed, though different groups may differ on the details.

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:

Blogs:

How the Cloud Data Revolution is Transforming Construction in the Heavy Highway Space

Trimble Dimensions Spotlight Series: Infrastructure in the United States

Finding the Equipment Management Sweet Spot

Viewpoint Customer Success Story: Widening the Widow Maker

Addressing Uncertainty over Construction Materials

Ebooks:

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?

Case Studies:

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.

Posted By

Andy is Marketing Content & PR Manager at Viewpoint. He has worked in the construction software arena since 2011. Previously, he netted multiple awards as a newspaper and trade media editor.