July 1, 2021
PRESIDENT BIDEN STRIKES A $1.2 TRILLON STIMULUS DEAL
Whether through a stimulus package, base bills, or both, several items we have been advocating for have the real potential to significantly boost water infrastructure construction spending and more.
Last week’s announcement from President Biden on a bipartisan infrastructure package was met with disagreement from the extremes of both parties. The agreement focuses on investments in roads, railways, bridges and broadband internet, but it does not include investments Biden has referred to as "human infrastructure," including money allocated for childcare and tax credits for families.
The attached report from Key Advocates highlights what’s included in the agreement and the plan to pay for the $1.2 Trillion / 8 Year plan with more than $500 billion in new spending. In addition, Sante Esposito has provided a comparison to the President’s original proposal. Here's a look at what's included in the agreement for water and “other” related infrastructure, according to the White House fact sheet:
- Water and “other” infrastructure: $266 billion in Total
- Water: $55 billion
- Broadband: $65 billion
- Environmental remediation: $21 billion
- Power, including grid authority: $73 billion
- Western water storage: $5 billion
- Resilience: $47 billion
CONGRESS CONTINUES TO ADVANCE BASE FUNDING BILLS
In addition to the stimulus package, both houses of Congress have been working to advance infrastructure base funding bills, with the House expected to hold a floor vote next week on the INVEST In America Act, which is inclusive of both transportation and water infrastructure.
For water infrastructure, the House Energy and Commerce Committee bill includes $53 billion for the Drinking Water State Revolving Fund and $45 billion to replace lead service lines, as well as $40 billion for the Clean Water State Revolving Fund. In the upper chamber, as previously reported, the Senate Environment and Public Works Committee in May advanced a surface transportation reauthorization bill that would increase funding by about 34% over FAST Act to a baseline of $303.5 billion over five years.
Just a few weeks prior, the full Senate also passed S.941, “Drinking Water and Wastewater Infrastructure Act of 2021” which reauthorizes the Clean Water and Drinking Water State Revolving Funds at $3.25 billion annually over five years for a total of $14.65 billion.
While very different in size and scope, both the Senate and House proposals represent an increase in funding for water (and transportation) infrastructure. Much remains to be seen in how the two chambers will reconcile their numbers, but one thing is certain: there will be a great deal of negotiation before either the stimulus bill or the base bills are passed in full.
FY 2022 BUDGET – INFRASTRUCTURE FUNDING
As previously reported, President Biden released a $6 Trillion budget for fiscal year 2022, which includes new details on his previously proposed American Jobs Plan (AJP).
Funding for water infrastructure would be increased under the proposal, including:
• $1.36 billion for the Drinking Water State Revolving Fund ($1.13 billion in FY21)
• $1.87 billion for the Clean Water State Revolving Fund ($1.64 billion in FY21)
• $72.2 million for the Water Infrastructure Finance and Innovation Act (WIFIA) program ($59.5 million in FY21)
• $81.5 million for Reducing Lead in Drinking Water grants, which help communities and low-income homeowners replace lead
service lines ($21.5 million in FY21)
For transportation, the budget proposal would maintain existing funding levels for core highway, transit, and airport programs, and calls for a modest increase to transit construction by way of Capital Improvement Grants. It is worth noting that when coupled with the AJP, the proposal does represent a 5-year funding plan; however, it does not contain a full policy proposal for a surface transportation reauthorization bill, nor does it address projected shortfalls in the Highway Trust Fund. Included in the proposed budget:
• $47 billion for Federal Highway
• $12.5 billion for Public Transportation
• $3.3 billion for the Airport Improvement Program
Senate Republicans released a second counter proposal to the AJP, this time upping the ante to $928 billion, which is a significant step forward from their initial $568 billion offering in late-April. The Republican proposal includes the Surface Transportation Reauthorization Act of 2021, a multi-year funding bill unanimously approved May 26 by the Senate Environment and Public Works Committee that increases highway, road, and bridge funding by 34% over baseline. The shift comes days after Biden offered to cut $550 billion from his original proposal, moving the two sides closer than they have ever been, and showing genuine negotiations between the two sides. The Senate Republican counter proposal includes:
• $506 billion for roads, bridges and major projects — a $91 billion increase
• $65 billion for broadband
• $48 billion for water infrastructure
• $25 billion for airports
• $22 billion for freight and passenger rail
Although there is still a large gap between them, both proposals bring us closer to some sort of funding package and give hope that the long-promised investment will finally come to fruition. One place where the conversation continues to diverge is in how the plans would be paid for. President Biden has proposed increased taxes on large corporations and high-earning individuals, while the Senate GOP is looking to repurpose existing COVID-19 funds, an approach that White House officials have repeatedly rejected.
The advancement of both proposals is encouraging, although many challenges still remain. No matter what form it takes, an infrastructure investment at the scale of either proposal would be transformative for the nation and a boon for the construction industry. The CWCC will continue to advocate for increased funding for the SRF and other critical programs.
What’s next: The President’s budget begins the annual appropriations process and serves as an outline for Congress of the Administration's spending priorities for the upcoming fiscal year. The budget is a proposal, and final investment decisions will be negotiated between Republicans and Democrats in the coming months.
