The $1.2 Trillion Infrastructure Bill and What it Means for A&E and Construction CompaniesAnchin AlertDecember 8, 2021
President Biden recently signed the $1.2 trillion infrastructure bill into law, providing for $550 billion of new infrastructure investments for bridges, roads, broadband and water and energy systems. After decades without investment, our roads, bridges, and water systems need rebuilding. This investment in our country’s backbone will help strengthen our nation’s infrastructure as well as create an estimated 2.4 million additional jobs by the end of 2025.
The proposal includes:
- $110 billion for roads, bridges and major infrastructure projects which is significantly less than what Biden first proposed in the American Job Plan proposal
- $66 billion in passenger and freight rail
- $65 billion in improving the nation’s broadband infrastructure
- $65 billion for rebuilding the electric grid and expanding renewable energy
- $55 billion to upgrade water infrastructure
- $50 billion to make systems more resilient from droughts, floods and cyberattacks
- $40 billion for bridge repair, replacement, and rehabilitation
- $39 billion to modernize public transit
- $25 billion in airports
- $21 billion to clean up Superfund and brownfield sites, reclaim abandoned mine land and cap orphaned gas wells
- $17 billion in port infrastructure
- $16 billion for major projects that would be too large or complex for traditional funding
- $12 billion in partnership grants for intercity rail service, including high-speed rail
- $11 billion for transportation safety
- $7.5 billion for zero and low emission buses and ferries
- $7.5 billion to build a nationwide network of plug-in electric vehicle chargers
- $1 billion to reconnect communities
The Administration is proposing to pay for the plan in a multitude of ways, none of which includes raising taxes. Instead, legislators claim they will fund the bill by repurposing COVID-19 relief funds including funds intended for federal unemployment relief that was unused by certain states. In addition, the Administration is proposing to recoup money in fraudulent unemployment benefits paid out during the pandemic, save funds by delaying a Medicare rebate rule passed under the previous Administration, and gain tax revenue by changing the tax reporting requirements for cryptocurrencies. Lastly, the infrastructure package relies on generating money from economic growth on the long-term projects.
This new infrastructure investment should be an exciting opportunity for architecture, engineering and construction (A/E/C) companies. Close attention will be paid to the speed at which the identified projects will be determined, and then at which they are bid and awarded. This federal investment in the future of our infrastructure and economy will make a historic impact in our communities. The law also includes funding and provisions to get more job training programs going, and to get more women and minorities into the construction industry.
Based on the above, planning is even more important than ever for A/E/C companies. Monitoring when the various projects will be in the pipeline, deciding which ones to bid on, estimating costs and budgeting the manpower and cash flow requirements will be key. Additionally, since another tax law proposal with more changes is being discussed, proactive tax planning will be crucial.
For more information about the $1.2 trillion infrastructure bill, how it can impact your company and how to plan for this, please reach out to Phillip Ross or your Anchin Relationship Partner.