On Wednesday, March 31, the Biden administration released its American Jobs Plan (AJP), a detailed blueprint to spend more than $2 trillion over eight years for a wide range of infrastructure-related initiatives, including both “core” or “traditional” infrastructure programs as well as “non-core” and social welfare proposals. The administration has signaled that the AJP is the first of two large legislative packages it intends to introduce over the coming weeks, with the second to focus on other issues such as health and education.
The AJP covers a broad and ambitious set of spending initiatives, and several themes are emphasized throughout the plan. Most prominently, there is a clean and renewable energy focus underlying several of the proposals aimed at the mitigation of and adaptation to climate change and a stated goal of reaching 100 percent carbon-pollution-free power by 2035. Also emphasized in the AJP are programs to assist disadvantaged communities, including rectifying historical and persistent inequities. Finally, the plan stresses that programs will require goods and materials to be made in America, though it does not provide detail on the parameters of any modifications to Buy America regulations.
In connection with the release of the AJP, the Biden administration also released its Made in America Tax Plan, which administration officials suggest would fully offset the full cost of the AJP over 15 years. Notably, this plan does not include proposals frequently discussed for infrastructure spending “pay-fors” adhering to the user-pays principle, such as an increase in federal excise tax on gasoline or the introduction of a vehicle-miles-traveled fee. Instead, it relies on a set of modifications to the corporate tax code, including an increase of the corporate tax rate from 21 percent to 28 percent and changes to the tax treatment of income of multinational corporations.
The AJP states that its implementation will require partnership across government, unions and industry to provide meaningful outcomes for the American people. It does not, however, include specific proposals related to the participation of private industry in the efforts described in the plan or the funding of those efforts. In testimony on March 25 to the House Committee on Transportation and Infrastructure, Secretary of Transportation Pete Buttigieg indicated that the establishment of a national infrastructure bank remained a possibility to fill funding gaps. He also acknowledged that the $15 billion cap on tax-exempt Private Activity Bonds (which have been used to leverage private investments in public-private partnerships (P3s) in particular) has been nearly reached and suggested that an increase of the cap may be a straightforward way to stimulate private investment in infrastructure projects.
According to a White House briefing, the AJP is intended to supplement, rather than replace, the funding and policy-making process for the reauthorization of surface transportation programs due to expire on September 30, 2021. This procedural element is important because the AJP will not be tied to the must-pass, bipartisan reauthorization legislation, which requires at least 60 votes in the Senate to overcome the legislative filibuster—signaling that the Biden administration may consider the use of the 50-vote threshold budget reconciliation process if the AJP cannot garner sufficient Republican support. However, because budget reconciliation restricts non-budgetary legislative changes, modifications to existing programs through normal course legislation may be necessary in order to pass the AJP via reconciliation.
The AJP presents congressional leaders with the Biden administration’s favored path for infrastructure spending and corporate taxation reform but does not include proposed legislative text. Accordingly, the plan will be subject to extended negotiation among, and substantial revisions by, House and Senate leadership and relevant congressional committees. We expect that the final legislative text may differ significantly from the AJP put forth by the administration this week and will provide further updates as a legislative proposal takes shape.
Below we provide a brief summary of the major “core” infrastructure spending proposals set forth in the AJP and certain of the “non-core” spending elements of the plan that may be of interest to our clients and other infrastructure industry stakeholders.
 The White House, Fact Sheet: The American Jobs Plan, March 31, 2021.
 Axios, Biden Unveils Sweeping American Jobs Plan, March 31, 2021.
 The White House, Background Press Call by a Senior Administration Official on the President’s American Jobs Plan, March 31, 2021.
 Inframation, US DOT Secretary Supports PABs Increase and Infra Bank, March 25, 2021.
 Transportation for America, Biden’s Infrastructure Plan is Out. Here are our Thoughts, March 31, 2021.
 United States Environmental Protection Agency, Lead Service Line Replacement, accessed April 1, 2021.