The Biden administration in March unveiled its $2 trillion infrastructure plan. Dubbed the American Jobs Plan, the proposal aims to modernize the nation’s infrastructure and shift to greener energy while creating millions of good-paying jobs.
The sweeping plan includes funding to improve roads and bridges, upgrade transit systems, accelerate the shift to electric vehicles, boost manufacturing, renew the electric grid, and build high-speed broadband infrastructure — among other things.
While an infrastructure bill is likely to receive more bipartisan support than the average piece of legislation, discussions are expected to continue into summer in hopes of reaching a deal. What the final plan will look like is yet to be determined, but the current proposal contains several elements that could potentially impact the construction industry:
For starters, the proposal would provide $115 billion to modernize 20,000 miles of highways and roads. It would also fix the ten most economically significant bridges and repair 10,000 smaller bridges. The bill would also devote $85 billion to modernize existing transit systems, $80 billion to improve railways, and $25 billion to upgrade airports.
In addition to upgrading transportation infrastructure, the proposal aims to accelerate the shift toward electric vehicles with a $174 million investment in the EV market. This includes funding to build a national network of 500,000 EV charging stations by 2030.
Homes and commercial buildings
The plan would also invest $213 billion in building, renovating, and retrofitting more than two million homes and commercial buildings. Public schools, colleges, VA hospitals, and federal buildings would all be modernized and upgraded with energy efficiency measures. Furthermore, the bill would eliminate exclusionary zoning laws and land use policies such as minimum lot sizes, mandatory parking requirements, and prohibitions on multifamily housing.
Biden’s proposal also funnels $111 billion into rebuilding the nation’s water infrastructure. It would eliminate all lead pipes and service lines in drinking water systems, as well as upgrade the country’s drinking water, wastewater, and stormwater systems. Strengthening the water system will create a significant number of new construction job opportunities and bring new projects to market.
The bill also allocates $100 billion to repairing the nation’s power grid, which includes laying thousands of miles of transmission lines. In addition, the plan would establish a new Grid Deployment Authority at the Department of Energy to better leverage existing rights-of-way for transmission lines along roads and railways. The effort to shore up the grid will create jobs for laborers and electricians, as well as create demand for American-made building materials.
Another $100 billion would go toward addressing the nation’s digital infrastructure and expanding access to reliable internet. This funding would help build high-speed broadband infrastructure to reach 100% coverage across the nation. Along the way, these projects would create more jobs related to building out and maintaining fiber-optic lines.
The infrastructure plan itself would create thousands of new jobs for American workers, but the plan also invests $100 billion in workforce development. The proposal focuses on retraining dislocated workers, providing skill development opportunities for underserved communities, and getting students on career pathways before they leave high school.
One of the challenges of rebuilding the nation’s infrastructure and recovering from the coronavirus pandemic is the shortage of skilled labor. To that end, the bill funnels $40 billion into retraining dislocated workers in high-demand sectors like clean energy and manufacturing. It also includes $48 billion to create apprenticeships and pre-apprenticeship training programs to ensure underserved groups have access to infrastructure jobs.
Response from construction groups
Industry groups generally agree on the need for infrastructure investments. However, some have expressed concern over the proposed boost in corporate taxes. (The Biden plan increases the corporate tax rate to 28% from the current rate of 21%.) Others, such as the Associated Builders and Contractors (ABC), have voiced concerns over the plan’s provisions to use project labor agreements.
So far, the GOP has proposed two alternatives to the Biden plan. Senate Republicans put forward a $928 billion counteroffer that includes $257 billion in new spending for roads, transit, rail, and water infrastructure while excluding the proposed corporate tax increase. While the plan is a fraction of the size of the Biden proposal, it represents a step toward reaching a bipartisan infrastructure deal.
The second option proposed by House Republicans is not a new bill but a reauthorization of the current five-year transportation bill, which expires on September 30. The $400 billion plan includes funding for highways, bridges, and transit systems. Unlike both the Senate proposal and the Biden plan, the narrower House plan does not include mass transit, airports, and water infrastructure. It also does not address broadband infrastructure or electric vehicle charging stations.
No matter what the final bill looks like, any future investments in infrastructure will likely have a massive impact on the construction industry — bringing a steady stream of new projects to market and creating a demand for more new workers.
Furthermore, given the Biden plan’s emphasis on addressing climate change and accelerating the energy transition, the construction industry will face growing pressure to green up its practices. From electrifying fleets to supporting green building standards and improving energy usage, companies that rise to the challenge will be well-positioned to seize new opportunities created by infrastructure investments.
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