Infrastructure bill passes the Senate: Hope for American Economy
A $1 trillion infrastructure bill was passed on August 10 by the US Senate, including $500 billion in new spending for infrastructure, offset by a combination of tax and non-tax provisions. Democratic leaders have indicated that action on the Senate-passed bill may be delayed until the Senate passes a 'budget reconciliation' tax and spending bill. The House will vote on the bill after the Senate passes a spending and tax bill.
Creating new jobs and growing the economy
In an attempt to clear up the repair backlog in transportation systems, a roughly $1 trillion investment package will be announced. Moreover, it suggests new investments in grid, clean water, and broadband expansion to modernize America's needs.
Continuing to catalyze the country's move toward a cleaner economy, Washington released the Senate bill on Monday. The proposed spending of $550 billion includes over a third in investments in infrastructure, energy and transportation.
Other investments include drinking water systems, weatherization and energy efficiency.
With a strong focus on protecting both the physical infrastructure and digital infrastructure, the bill calls for increased investments in cybersecurity in the electric, water and transportation sectors. The funding will help fund the newly-created office of the National Cyber Director, which serves as the coordination office for cybersecurity policy with federal agencies, Congress and the White House.
In addition to preventing new debt, the proposed spending would also reduce taxes. To pay for it, new tax reporting requirements will be offset, while $250 billion in COVID-19 relief funds will be redirected, along with cost-cutting measures. However, the fate of this bipartisan deal may depend on how Congress votes on a separate $3.5 trillion budget reconciliation bill, which would push for additional spending and tax relief measures offset in part by current tax increases.
Investing in America’s infrastructure
The INVEST in America Act would dedicate approximately $550 billion of additional federal funds to improving and expanding the nation's logistics and transportation networks. Funding is proposed for road, bridge, airport, rail, maritime port, and public transportation infrastructure.
The nation's power grid will be upgraded and made more resilient, renewable energy will be boosted, water will be safeguarded, and “climate-proof” critical infrastructure will be overhauled. As part of the bill, funds are earmarked to support the expansion of internet access to underserved areas of the country, thus reducing the digital divide.
Developing a decarbonized infrastructure for America
INVEST in America Act calls for $550 billion in new investments to be made in clean energy, power, and transportation, as well as drinking water and weatherization systems.
It is important for companies to be aware that the Senate bill:
A cleaner, more resilient supply of electricity in the United States is a top priority. To support the broader adoption of renewable energy, the bill provides funding for upgrading the electric grid and transmission networks. Nuclear and hydropower are also allocated funding.
Promotes national power/energy authority. In some instances, if the bill is passed by Congress, it will grant the Federal Energy Regulatory Commission more authority to overrule states in deciding where transmission lines should be located and permitted. Utility companies seeking to increase transmission investment need to streamline planning and siting.
Investments in green technologies are encouraged, including energy storage, hydrogen production, and carbon capture and storage (CCS). As part of the legislation, clean hydrogen hubs and direct air capture (DAC) hubs are supported.
Protecting America's infrastructure
There can be no compromise on cybersecurity. States, localities, and tribal governments will receive $1 billion for network upgrades as part of the bipartisan deal. One billion dollars are also spent on better safeguarding water and electric power infrastructures. The bill provides for three types of investments in cyber infrastructure while taking into account the nation's physical and digital infrastructure needs.
The improvement of cybersecurity infrastructure in the power and water sectors. A cyber-related support package of $600 million has also been provided for power infrastructure, such as smart grid technology. There is $375 million allocated for more secure water systems, such as technical assistance when attacks occur. In the report, a coordinator is required for providing alerts on cyber incidents to the transportation authorities.
Government agencies at the state, local and tribal levels need to upgrade systems and software. To address cybersecurity risks and threats such as internet worms, a $1 billion fund will award grants to non-federal government agencies over the next four years.
Government-wide coordination and response to cyber-attacks. A $21 million budget request will fund the office of the new National Cyber Director. A total of $20 million in annual replenishment would be made available for the Cyber Response and Recovery Fund through 2028 under the proposal.
Various sources of funding have been incorporated into the infrastructure agreement, including pandemic relief funds, strong tax enforcement of cryptocurrency, and other countermeasures.
The bill anticipates supporting its revenue with a $30 billion boost from stronger tax reporting and enforcement requirements on cryptocurrency, and a $14 billion boost from reimposing the Superfund excise tax on chemicals.
In addition to redirecting pandemic emergency relief funds, extending interest rate softening options for defined benefit plans, and generating revenues from expected economic growth effects, other offsets include a variety of user fees and Medicare savings as well as the receipt of revenue from increased infrastructure improvements.