Preview of the Infrastructure Investment and Jobs Act

The White House and Senate negotiators reached an agreement on July 28 on infrastructure legislation the White House styled as “the largest long-term investment in our infrastructure and competitiveness in nearly a century.” The deal, known as the Infrastructure Investment and Jobs Act (IIJA), would provide for $550 billion in new spending across a range of infrastructure policies, including surface transportation, water and power infrastructure, and climate resiliency programs.

The legislation, if enacted, would mark a major bipartisan victory for President Biden, who characterizes it as a core part of the American Jobs Plan, the infrastructure plan that his administration rolled out in the earliest days of his term. It also demonstrates the continued importance of centrist Senators in both parties, as the deal was hammered out by a close knit bipartisan group of moderate lawmakers, including Sens. Joe Manchin (D-WV), Kyrsten Sinema (D-AZ), Rob Portman (R-OH), and Susan Collins (R-ME).

Democratic leaders in the House, however, offered more tempered support, with House Majority Leader Steny Hoyer (D-MD) suggesting the bill brings the two chambers “closer” to “eventually reaching agreement.” Key committees in the House, such as Energy and Commerce and Transportation and Infrastructure, have developed related legislation, but as the Senate conducted the negotiations, those bills were not included in the deal’s text. Dynamics regarding the fate of a larger $3.5 trillion reconciliation bill also reduce Democratic optimism about the infrastructure deal, with progressive members in the House unwilling to bring up the negotiated bill until the Senate moves forward on a budget resolution to unlock the reconciliation process.

While the political landscape is complex, the contents of the IIJA are broadly supported, having been developed largely out of earlier bipartisan efforts, such as Senate Environment and Public Works (EPW) Committee Chairman Tom Carper’s (D-DE) “Surface Transportation Reauthorization Act,” which passed unanimously out of the EPW Committee, and Senate Energy and Natural Resources (ENR) Committee Chairman Joe Manchin’s (D-WV) “Energy Infrastructure Act,” which advanced 13–7 out of the ENR Committee.

According to widely circulating summaries, the legislation contains a number of investments that, according to the White House, will add two million more jobs per year over the course of the decade. A few highlights include:

• Providing a five-year reauthorization of federal surface transportation projects, including $110 billion of new funds for roads, bridges and major projects;
• Providing $7.5 billion in funding to build out a national network of electric vehicle charging stations;
• Providing $55 billion in funding for drinking-water infrastructure, including dedicated funding to replace lead pipes in communities nationwide and respond to PFAS contamination;
• Providing more than $16 billion in funding for battery processing and manufacturing programs, including grant funding to support a viable domestic battery materials processing industry and sustain a North American battery supply chain; and
• Providing more than $8 billion in clean hydrogen investment, including the development of at least four regional clean hydrogen hubs to demonstrate the production, processing, delivery, storage, and end-use of clean hydrogen.

The cost of the Infrastructure Investment and Jobs Act is offset by returning unspent emergency relief funds to the federal government, including $205 billion in unspent emergency COVID relief funds, $53 billion in unspent unemployment insurance benefits, and recouping $50 billion in fraudulently issued federal unemployment insurance benefits. While a broader program of IRS enforcement was dropped from the deal, the negotiators included a requirement that cryptocurrency transactions be reported to the IRS, which is projected to raise $28 billion during the next 10 years.

On the evening of July 28, the Senate voted 67–32 to invoke cloture on the legislation—seven more votes than was minimally necessary—setting up a series of amendment and other procedural votes by the end of the week or early next. If passed, the bill would then advance to the House of Representatives, which may hold the bill until the Senate moves forward with its budget resolution, which would allow reconciliation legislation to advance later this fall. While these remaining steps are significant legislative hurdles, it is safe to say that a substantial infrastructure bill is closer now than at any time in the past decade.

Click here for our in-depth advisory regarding the Infrastructure Investment and Jobs Act.

© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.