One down, one to go: Senate passes $1 trillion hard infrastructure measure

Infrastructure proved to be a bipartisan benefit, after all. Now that Washington has finally passed one infrastructure deal, it goes for another.

As expected, a bipartisan $1 trillion infrastructure deal passed the Senate today by a 69-30 vote. That included 19 Republicans in favor, including Senate Minority Leader Mitch McConnell of Kentucky. It came after centrist senators in both parties and the White House reached a long-sought compromise on the bill. It now goes to the House where it is expected to pass and be signed into law after Labor Day.

The 2,702-page bill is centerpiece of President Joe Biden’s “Build Back Better” program, and he hailed it as “the most significant long-term investment in our infrastructure and competitiveness in nearly a century.”

And the bill should provide an almost immediate impact on the nation’s infrastructure, which received a “C-minus” grade from the American Society of Civil Engineers recently. That’s because it provides $113.3 billion in advance general fund appropriations for various forms of infrastructure—including transport—“above and beyond” authorization and funding from trust funds.

The deal provides about $567 billion new federal money for roads, bridges, rail lines, transit projects, water systems and other physical infrastructure programs. To address the truck driver shortage, the bill creates a pilot apprenticeship program for drivers under 21. As much as $77.9 billion is to address freight system needs.

American Trucking Associations President and CEO Chris Spear praised the Senate’s passage, saying: “For nearly three decades, our nation and industry have been held hostage by empty promises—all talk, no action. Today, the Senate put America ahead of itself.” 

At the same time, Democrats are working on a larger $3.5 trillion “human infrastructure” that includes things like universal pre-K education, Medicare improvements and two years free community college. If all goes well, that could pass under a “reconciliation” agreement that requires all 50 Democratic votes in the Senate – with Vice President Kamala Harris the tiebreaker.

But on roads-and-bridges infrastructure, Sen. Rob Portman, R-Ohio said it was long past time. “The American people deserve to have good roads and bridges and infrastructure to drive on, travel on,” he said.

“Every president in the modern era has proposed an infrastructure package,” Sen. Mitt Romney, R-Utah, said. “This was an effort to say let’s break the logjam.” 

According to a fact sheet from the White House, the deal would provide $550 billion in new funding, including $389 billion transport-related. It includes (all figures in billions):

• Roads, bridges, major projects, $110
• Safety, $11
• Public transit, $39
• Passenger and Freight Rail, $66
• Electric vehicle infrastructure, $7.5
• Electric buses/transit, $7.5
• Reconnecting communities, $1
• Airports, $25
• Ports & Waterways, $17
• Water infrastructure, $50
• Broadband infrastructure, $65
• Environmental remediation, $21
• Power infrastructure, $65
• Western Water Storage, $5

The remaining $500 billion or so is for renewal of the Fixing America's Surface Transportation Act (FAST Act) that expires Sept. 30.

Trucking interests and other business groups hailed the compromise as an example of Washington finally able to “get things done.”

“We thank Senators for passing this once-in-a-generation investment in America’s transportation, water, energy and communications infrastructure, and applaud them for achieving a bipartisan outcome,” said Brendan Bechtel, Chairman and CEO of Bechtel Group, Inc., and chair of the Business Roundtable Infrastructure Committee. “This historic legislation will drive long-term U.S. competitiveness at home and abroad, all while creating jobs and economic prosperity for more American families.”

How Washington plans to pay for this is unclear.

The bill would borrow some $118 billion from general revenue to meet the needs of the Highway Trust Fund, which has borrowed some $271.8 billion since 2008, according to Jeff Davis of the nonpartisan Eno Center for Transportation.

The bill does include a pilot program on a gas tax alternative that would charge users based on vehicle miles traveled. But for the most part, Congress punted on user fees.

The nonpartisan Congressional Budget Office estimates the infrastructure bill would add $256 billion to deficit over 10 years.

There is talk of recouping some money given to states for COVID relief. But it appears there is no increase in the federal fuels tax, no money to beef up Internal Revenue Service enforcement, or no significant increase in taxes on any group of Americans.

Instead, Congress appears to be saying, this act essentially pays for itself in the form of national economic gains. Or, simply, adding to the national debt.

According to a recent Business Roundtable study, each dollar of a $1 trillion infrastructure investment would yield nearly $4 in U.S. economic growth over 20 years. The study also found that an investment of this size and scope would increase the average American household’s disposable income by $1,800 every year for 20 years, create 1.2 million new jobs and boost wage growth.

The tying of the two infrastructure bills is the idea of Senate Majority Leader Chuck Schumer, D-N.Y., who had threatened to postpone Congress’s annual August recess until this $1 trillion bill came for a vote. Next is the $3.5 billion baby that is largely the brainchild of Sen. Bernie Sanders, I-Vt., chairman of the Senate Finance Committee.

That bill will be debated during September, and will probably only pass if all Democrats vote for it. That prospect is rustling Republican feathers.

On the other hand, perhaps senators will follow the lead of Sir Isaac Newton, who once remarked: “Tact is the knack of making a point without making an enemy.”