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Congress Passes Historic $1.2 Trillion Infrastructure Package: What That Means for the United States — And Your Construction Company

With the infrastructure bill approved, American heavy and civil contractors could see significant work coming their way

After months of political wrangling, Congress has finally passed the White House’s proposed $1.2 trillion infrastructure spending package. The bipartisan 228-to-206 vote of approval in the House is the final milestone for the bill, which has long been held up while debate raged around an even larger spending package.

Progressive members of the House had signaled they would not vote for the infrastructure bill, which was already approved by the Senate on August 10, until Congress agreed to move forward on the $1.85 trillion Build Back Better Act, which focused on environmental, healthcare, job creation, economic relief and more. The latter bill is one that has seen a stark divide in Congress—and even within political parties—over costs and where monies would be spent.

The infrastructure bill, however, was not as hotly debated. Originally introduced by the Biden administration as the American Jobs Plan, the bill morphed into the Infrastructure Investment and Jobs Act, but has seen steady bipartisan support, as many in Congress agree there is a pressing need to address the nation’s crumbling infrastructure. Initial estimates for the spending bill were as high as $3 trillion, but concerns about costs pared the final bill back to the $1.2 trillion figure.

Politically, the passage of the infrastructure is a huge win for President Biden, though perhaps the bigger win is for states and communities where dangerous roads, bridges, water and sewer systems, railways and much more are in critical need of attention. And, the bill is a boon to nearly all types of contractors—though largely heavy and civil firms—that will soon see a significant influx of federally-funded work coming their way.

The passage of the infrastructure bill is expected to benefit the construction industry and contractors for years to come—but only if they’re prepared to meet new modern demands and increased federal oversight head on with real-time data, connected construction workflows, and leading-edge technology adoption.

Well Received

The bill’s passage was largely lauded around the construction industry. Here are a few early statements from industry associations and leaders:

“Because of today’s vote, state and local officials will be able to invest in a more efficient supply chain network. They will also be able to improve roads and bridges to make them safer and more reliable. Metro areas will be able to better maintain and expand transit systems. And water authorities will be able to further safeguard the quality of local drinking water, among other improvements funded by this bill. The measure also provides needed investments to make infrastructure more resilient to extreme weather events.

“Once the President signs this bill into law, our members are ready to begin the hard, but necessary, work of rebuilding the nation’s infrastructure. They will also begin the work of building rewarding careers for a generation of new construction professionals because of this measure. Ultimately, these new infrastructure investments will provide a needed boost for the construction industry while making our economy more efficient.”

—Stephen E. Sandherr, CEO, Associated General Contractors of America

“This infrastructure package contains the most significant investment in our nation’s infrastructure in a generation and could yield crucial wins for the American people and construction industry. It is promising to see progress made toward modernizing our nation’s roads, bridges, water infrastructure, transit, railways, ports and other critical infrastructure. This bipartisan accomplishment is something that has eluded Congress for decades and is proof of the possibilities when lawmakers choose compromise over conflict.”

—Michael Bellaman, president and CEO, Associated Builders and Contractors (ABC)

"The legislation “is the most significant measure in more than 50 years to meaningfully address the condition and performance of the U.S. transportation network.”

—Dave Bauer, American Road & Transportation Builders Association CEO to ENR


"It is a great day for the nation as the U.S. House of Representatives passed the Infrastructure Investment and Jobs Act, fulfilling President Biden's vision with a historic piece of legislation that will have monumental impacts on the economy, public safety, global competitiveness and each American's well-being."

—Dennis Truax, president, American Society of Civil Engineers

What's In the Infrastructure Spending Deal?

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 combination of corporate and individual tax increases on those making more than $400,000 annually, repurposing of COVID pandemic funds, and other measures spread across as many as15 years. 

With the final passage of the $1.2 trillion version of the bill, now called the Infrastructure Investment and Jobs Act, hundreds of billions of dollars in new federal spending is expected to be designated over a five-year span. Included is:

  • $110 billion in roads, bridges and major projects, including $40 billion for immediate bridge repair and replacement
  • $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)
  • $50 billion to make water and power systems more resilient — protecting them from weather, natural disasters and cyber attacks
  • $39 billion to modernize and expand transit systems
  • $25 billion in airport infrastructure to address repairs, maintenance backlogs, reduce congestion and emissions
  • $21 billion in environmental remediation and infrastructure projects
  • $17 billion investment in port infrastructure and construction
  • $16 billion for major infrastructure projects deemed too large or complex for traditional funding programs
  • $7.5 billion to build a national network of charging infrastructure for electric vehicle
  • $1 billion to reconnect communities (largely in Black neighborhoods) that were divided by previous highways and other infrastructure projects

In late November, Trimble Constructible posted an article breaking down how much of the infrastructure spending is expected to be allocated by state. The data was pulled from White House fact sheets issued as the bill's costs were being debated in Congress. The following chart represents the latest state-by-state breakdown:

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

In January 2022, Construction Dive published an article breaking down some key takeaways from the passage of the infrastructure bill and what comes next. Among them:

  • The infrastructure bill calls for an emphasis on public-private partnerships
  • It is expected that the bill's provisions will boost union and minority jobs
  • Contractors' use of modern technologies will be strongly encouraged
  • Roads and bridges will take priority and receive the most funding
  • Projects may take still some time to get going

For some perspective and comparison, of the originally proposed $2 trillion under the initial American Jobs Plan, $621 billion was dedicated for transportation infrastructure like roads, bridges and railways with $174 billion dedicated to expanding an electric vehicle market, another $111 billion to provide clean drinking water projects, $100 billion for expanding broadband and $100 billion for improving power infrastructure like the electric grid.

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 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 was set for a vote in the House of Representatives, though that vote was pushed to this fall. Now that it has passed in both chambers and Biden signs off on it, the bill becomes official. 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.

Stay tuned to this space for more details on infrastructure-related projects, best practices for winning and managing the work and much more. 

More Industry Perspectives:

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

Now that the infrastructure bill has passed, construction industry professionals are sounding off. Here's what just some of our Trimble Viewpoint clients are saying about the bill and what comes next (culled from a recent survey in our Viewpoint Network peer-to-peer community):

“For the country, we will have better roads and bridges, which will help keep our cars from being damaged and make the roads safer in general. For our company it will keep us expanding into Heavy Highway and Bridges, which means more employment and a stable company.”

—Les Papp II, director of information technology, Rhode Island Construction Management Group


“I feel this is finally a great investment in America's future. Everything in this bill is so needed. As a first world country we should not have areas without drinkable water. We need better broadband access everywhere if we want businesses to grow and our children to be better educated to compete in this world. Also, all of our roads and bridges need a federal facelift and this provides that.”

—Susan Peck, job cost analyst, Hatzel & Buehler, Inc.


“As a heavy highway contractor, hopefully we'll see jobs come out that will repair many of the old bridges that are still in use today.”

—Jon Glenn, IT manager, C.W. Matthews


“I think it's a necessary expense; although it's unfortunate taxes will be increased in order to fund this.”

—Chris Gibbons, accounting, Prairie Electric, Inc.


“It all depends on how well the funding is managed and how much red tape you have to navigate in order to use the money involved.”

—Chris Rippley, technical project engineer, Kinsley Construction, Inc.


“I think this is great for the country but I feel we will be relatively unaffected in my company's industry. We may receive more work for medical and education facilities but I don't foresee a major change in our workload.”

—Michelle Bischoff, director of accounting, JHI Group Inc.


“It's great they finally passed this bill! America needs to invest in itself again.”

—Bob Fielder, database and implementation specialist, Zidell Companies


“Roads and bridges are our bread and butter, so hopefully more work!”

—Allison Whitman, contracts manager, JB James Construction


“I am not looking forward to federally funded projects and all the required paperwork. Smaller companies don't have the knowledge/capability for completing certified payrolls.”

—Dawn Qwam, project coordinator, APX Construction Group


More on the future of infrastructure in America:

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.

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/Industry articles:

Connected Construction: Leveraging the Cloud to Change How Contractors Work

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.

The AEC Professional's Essential Guide to Connected Construction: Embracing a new way of working to solve construction's oldest challenges.

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 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 Trimble Construction One suite.

ER Snell: Why this Atlanta-based asphalt and concrete contractor moved to the cloud with Trimble Construction One 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.