US is overhauling ageing infra, adding two billion jobs a year; here's how

President Biden has signed into law a roughly $1 trillion infrastructure package, which includes about $550 billion above projected federal spending on roads, bridges, expanded broadband access and more.

FP Staff November 16, 2021 14:59:03 IST
US is overhauling ageing infra, adding two billion jobs a year; here's how

President Joe Biden signs the "Infrastructure Investment and Jobs Act" during an event on the South Lawn of the White House. AP

Democrats rescued President Joe Biden's faltering domestic agenda last week, passing a giant infrastructure package that is one of the pillars of his $3 trillion economic vision after rebel moderates had earlier blocked a vote on his social welfare expansion.

Despite hours of cajoling lawmakers, party leaders had risked seeing Biden's two-pronged legislative strategy collapse as they failed to unite the party's feuding progressive and moderate factions. But the breakthrough came as lawmakers rubber-stamped the Senate-passed $1.2 trillion infrastructure bill on the House floor by a comfortable 228 votes to 206.

The passage of the infrastructure spending marks a legacy-making achievement for Biden, amid plunging personal approval ratings and a humiliating upset for his Democratic Party in the gubernatorial election in Virginia and a slim save in New Jersey, two blue-leaning states.

His spokeswoman Jen Psaki said the success was "proof that delivering for the American people is worth all the painful sausage-making."

"Clean drinking water for kids, broadband access, electric vehicles, biggest investment in public transit. It's happening. And more to come," she tweeted.

Promised spending vs Touted spending vs Actual Spending

In order to achieve a bipartisan deal, the president had to cut back his initial ambition to spend $2.3 trillion on infrastructure by more than half. The law, touted to be still over $1.2 trillion,  includes just about $550 billion in new spending over 10 years, since some of the expenditures in the package were already planned.

Yet, the administration hopes to sell the new law as a success that bridged partisan divides and will elevate the country with clean drinking water, high-speed internet and a shift away from fossil fuels.

“Folks, too often in Washington, the reason we didn't get things done is because we insisted on getting everything we want. Everything,” Biden said. “With this law, we focused on getting things done. I ran for president because the only way to move our country forward in my view was through compromise and consensus.”

Where will the money come from?

Indeed, many senators were stuck on the same question as bipartisan haggling over votes raged on. In the end, moderate Democrats have forced leaders to slash the roughly 2,100-page measure to around half its original $3.5 trillion size. Republicans oppose it as too expensive and damaging to the economy.

Democrats claimed the legislation pays for itself through a multitude of measures and without raising taxes.

But the Congressional Budget Office found that the package would add $256 billion to the fiscal deficit over the next 10 years. In fact, far from self-sufficient, much of the package’s cost would be covered with higher taxes on wealthier Americans and large corporations.

The five-year spending package would be paid for by tapping $210 billion in unspent COVID-19 relief aid and $53 billion in unemployment insurance aid some states have halted, along with an array of smaller pots of money, like petroleum reserve sales and spectrum auctions for 5G services.

What's the bill about?

Short Answer: The new law promises to reach almost every corner of the country. It’s a historic investment that the president has compared to the building of the transcontinental railroad and Interstate Highway System. The White House is projecting that the investments will add, on average, about 2 million jobs per year over the coming decade.

The package would provide large numbers of Americans with assistance to pay for health care, raising children and caring for elderly people at home. The package would provide $555 billion in tax breaks encouraging cleaner energy and electric vehicles.

Democrats added provisions in recent days restoring a new paid family leave program and work permits for millions of immigrants.

The package would provide huge sums for highway, mass transit, broadband, airport, drinking and wastewater, power grids and other projects.

Long Answer: Here's a breakup on the new law

  • Roads and Bridges

The bill would provide $110 billion to repair the nation’s ageing highways, bridges and roads. According to the White House, nearly 280,000 kilometres of America’s highways and major roads and 45,000 bridges are in poor condition. And the almost $40 billion for bridges is the single largest dedicated bridge investment since the construction of the national highway system, according to the Biden administration.

  • Public Transit

The $39 billion for public transit in the legislation would expand transportation systems, improve accessibility for people with disabilities and provide dollars to state and local governments to buy zero-emission and low-emission buses. The transportation department estimates that the current repair backlog is more than 24,000 buses, 5,000 rail cars, 200 stations and thousands of miles of track and power systems.

  • Railways

To reduce Amtrak’s maintenance backlog, which has worsened since Superstorm Sandy nine years ago, the bill would provide $66 billion to improve the rail service’s Northeast Corridor (457 miles, 735 km), as well as other routes. It’s less than the $80 billion Biden — who famously rode Amtrak from Delaware to Washington during his time in the Senate — originally asked for, but it would be the largest federal investment in passenger rail service since Amtrak was founded 50 years ago.

  • Electric Vehicles

The bill would spend $7.5 billion for electric vehicle charging stations, which the administration says are critical to accelerating the use of electric vehicles to curb climate change. It would also provide $5 billion for the purchase of electric school buses and hybrids, reducing reliance on school buses that run on diesel fuel.

  • Internet

The legislation’s $65 billion for broadband access would aim to improve internet services for rural areas, low-income families and tribal communities. Most of the money would be made available through grants to states.

  • Electricity

To protect against the power outages that have become more frequent in recent years, the bill would spend $65 billion to improve the reliability and resiliency of the power grid. It would also boost carbon capture technologies and more environmentally friendly electricity sources like clean hydrogen.

  • Airports

The bill would spend $25 billion to improve runways, gates and taxiways at airports and to improve terminals. It would also improve ageing air traffic control towers.

  • Water and Sewage management

The legislation would spend $55 billion on water and wastewater infrastructure. It has $15 billion to replace lead pipes and $10 billion to address water contamination from polyfluoroalkyl substances — chemicals that were used in the production of Teflon and have also been used in firefighting foam, water-repellent clothing and many other items.

With inputs from agencies

Updated Date:

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