June 30, 2021

Bipartisan Infrastructure Framework Includes Significant Private Investment

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BIPARTISAN INFRASTRUCTURE FRAMEWORK INCLUDES SIGNIFICANT PRIVATE INVESTMENT

On June 24, a group of 21 Republican and Democratic Senators (the “G-21”) came to a bipartisan agreement on a plan that could provide for more than $1 trillion in improvements to the nation’s physical infrastructure.[1] President Biden and Vice President Harris announced their strong support for the deal the same day.[2]

This compromise plan, referred to by the Biden administration as the Bipartisan Infrastructure Framework (the “Framework”), omits much of the social and noncore infrastructure aspects of the Biden administration’s $2.3 trillion proposal, the American Jobs Plan (the “AJP”).[3] However, if implemented, the Framework would result in $579 billion in new infrastructure spending, which combined with baseline spending, would amount to approximately $1.2 trillion in new investment over the next eight years.[4] The Framework’s plan also is an increase over the initial Republican counteroffer to the AJP, dubbed the “Roadmap,” which was a $568 million proposal that included mostly existing spending.[5]

Despite the smaller top line amount, the Framework’s proposed investment “uses” are quite broad. The plan includes $312 billion for transportation infrastructure, including funds for transit, roads, bridges, electric vehicle (EV) infrastructure, electric buses, airports, ports and waterways, and another $266 billion for other forms of infrastructure including water, broadband, environmental, power and resilience infrastructure. According to the Biden administration, the Framework would “make the largest investment in infrastructure in history, the biggest investment in rail since the creation of Amtrak, and the largest investment in transit ever.”[6]

Certain of the Framework’s funding “sources” are particularly notable for private infrastructure investors. More than $100 billion of the cost is expected to be funded through public-private partnerships (“P3s”), private activity bonds (and other municipal bonds) and “asset recycling” (which involves the monetization of existing assets through private investment).[7] In addition, the Framework proposes the creation and capitalization (in the amount of $20 billion) of a new Infrastructure Financing Authority (the “IFA”) to leverage private investment.[8] While specific details are yet to be provided, it appears the IFA would supplement existing federal programs such as the Transportation Infrastructure Finance and Innovation Act (TIFIA) and Water Infrastructure Finance and Innovation Act (WIFIA) programs to provide public financing to projects across sectors (thereby creating incentives for private investment in such projects by creating value in the capital structure). Together, these proposals reflect the Biden administration’s and the G-21’s recognition of the need for private investment to achieve the necessary improvements and upgrades to public infrastructure in the United States.

Our infrastructure and energy teams will continue to closely follow the development of these initiatives and other Biden administration proposals in draft legislation, together with the infrastructure bill, drawing on our extensive experience with P3s and private infrastructure investment, including longstanding advice to TIFIA, WIFIA and other federal financing authorities and programs.

Although the Framework reflects an agreement on physical infrastructure, significant hurdles remain in Congress before the plan could become law, in particular because the Biden administration views the infrastructure compromise as one part of a larger legislative package. President Biden has linked the infrastructure bill to a bill that includes initiatives from his American Families Plan (the “AFP”), which includes “human infrastructure” spending such as for childcare, elder care and education[9], and other clean energy priorities of the administration. While President Biden initially suggested he would not sign an infrastructure bill without a companion bill including the AFP and such other priorities[10] he subsequently clarified that his intention was not to issue a “veto threat” on the infrastructure bill.[11] Congressional leaders expect to proceed with the preparation of both bills over the summer with the goal of both reaching Biden’s desk by September 30.[12] Because a bipartisan agreement on the AFP package is unlikely, the Biden administration has indicated that those items will be voted on by the Senate through the budget reconciliation process, thus avoiding the need for 60 votes in that chamber. House Speaker Nancy Pelosi has also stated that a House vote on an infrastructure bill would not occur until there is a vote on the reconciliation bill.

In the table below, we provide a comparison between the Framework, the AJP and the Republican counterproposal.

INFRASTRUCTURE PLAN COMPARISON

BIDEN PROPOSAL (AJP)[13]: $2.3 TRILLION

REPUBLICAN PROPOSAL (ROADMAP)[14]: $568 BILLION [NOTE: INCLUDES EXISTING SPENDING PROGRAMS]

BIPARTISAN FRAMEWORK[15]: $579 BILLION

Transportation Infrastructure: $621 billion

Transportation Infrastructure: $454 billion

Transportation Infrastructure: $312 billion [Note: Includes $20 billion for the IFA]

$174 billion – EV initiatives

No funding for EV initiatives

$15 billion – EV infrastructure, electric buses, and electric transit

$115 billion – highway and road repair

$299 billion – road and bridge repair

$109 billion – roads, bridges, and major projects

$85 billion – modernize transit facilities and fund transit expansion

$61 billion – public transit system

$49 billion – public transit

$80 billion -- passenger and freight rail service

$20 billion – rail system

$66 billion – passenger and freight rail

$20 billion – road safety initiatives

$13 billion – safety programs

$11 billion – safety programs

$17 billion – inland waterways, coastal ports, land ports

$17 billion – ports and inland waterways

$16 billion – ports and waterways

$25 billion – airports

$44 billion – airports

$25 billion – airports

$25 billion – large, complex projects

 

$1 billion – reconnecting communities

$20 billion – projects redressing historic transportation inequities

 

 

Water Infrastructure: $111 billion

Water Infrastructure: $49 billion

Water Infrastructure: $55 billion

$56 billion – upgrade drinking water, wastewater and stormwater systems

$35 billion – drinking water and wastewater systems

Eliminate lead pipes

$45 billion – eliminate all lead pipes

$14 billion – water storage

Deliver clean drinking water to underserved communities, tribal nations and schools

$10 billion – remediate chemical substances in drinking water and invest in rural systems

 

 

 

 

Western Water Storage: $5 billion

Power Infrastructure: $100 billion

Power Infrastructure: $73 billion

Create investment tax credit to support buildout of 20 gigawatts of high-voltage transmission lines and establishment of Grid Deployment Authority at DOE

 

Upgrade power infrastructure, including the construction of new transmission lines to facilitate the expansion of renewable energy, including through a new Grid Authority.

Ten-year extension of investment tax credit and production tax credit for clean energy generation and storage

 

 

Plug orphan oil and gas wells and clean-up abandoned mines

 

 

Build next-generation, clean energy industries in distressed communities, including hydrogen and fuel and carbon capture deployment and storage

 

 

Remediate and redevelop idle industrial and energy sites in distressed and disadvantaged communities.

 

 

Finance a Civilian Climate Corps to bolster conservation and environmental justice efforts.

 

 

Digital Infrastructure: $100 billion

Broadband Infrastructure: $65 billion

Broadband Infrastructure: $65 billion

Build high speed broadband infrastructure to cover 100% of the country

 

Connect every American to high speed internet

Reduce the cost and increase adoption of broadband internet service

 

Reduce prices for internet service and close digital divide

Climate Resilience Infrastructure: $50 billion

Resilience: $47 billion

Safeguard critical infrastructure and services and defend vulnerable communities

 

Prepare infrastructure for the impacts of climate change, cyber-attacks and extreme weather events

Maximize the resilience of land and water resources to protect communities and the environment

 

 

Social and Noncore Infrastructure: $1.36 trillion

Environmental remediation: $21 billion

 

 

Address legacy pollution through targeted clean-up efforts.

 
Special thanks to summer associate Daniel Ishak who contributed to this publication.

脚注

[1]  Andrew Duehren et. al., Biden, Senators Agree to Roughly $1 Trillion Infrastructure Plan, The Wall Street Journal, June 24, 2021.
[2]  The White House, Fact Sheet: President Biden Announces Support for the Bipartisan Infrastructure Framework, June 24, 2021.
[3]  As discussed in our prior client alert, “Major Biden Administration Infrastructure and Jobs Plan Released.”
[4]  The White House, Fact Sheet: President Biden Announces Support for the Bipartisan Infrastructure Framework, June 24, 2021.
[5]  As discussed in our prior client alert, “Republicans Present Counterproposal to Biden Infrastructure Plan.”
[6]  The White House, Statement by President Joe Biden on the Bipartisan Infrastructure Framework, June 26, 2021.
[7]  Jeff Stein et. al., What’s in the White House, Senate bipartisan infrastructure package, The Washington Post, June 25, 2021; Reuters, Factbox: What’s in the U.S. Senate’s $1.2 trillion infrastructure plan?, June 24, 2021; Andrew Duehren et. al., Biden, Senators Agree to Roughly $1 Trillion Infrastructure Plan, The Wall Street Journal, June 24, 2021.
[8]  Brian Tumulty, Infrastructure Financing Authority opposed by municipal securities groups, The Bond Buyer, June 25, 2021; Andrew Duehren et. al., Biden, Senators Agree to Roughly $1 Trillion Infrastructure Plan, The Wall Street Journal, June 24, 2021..
[9]  Gabriel T. Rubin et al., What’s in Biden’s American Families Plan? From Taxes to Child Care, The Wall Street Journal, April 28, 2021.
[10]  Tom Ichniowski, Biden Walks Back Comment Linking Infrastructure and ‘American Families’ Bills, Engineering News-Record, June 27, 2021.
[11]  The White House, Statement by President Joe Biden on the Bipartisan Infrastructure Framework, June 26, 2021.
[12]  Rachel Bade et. al., Politico Playbook, Politico, June 25, 2021; Doina Chiacu, Republicans Senate negotiators ready to move forward on infrastructure after Biden walkback, Reuters, June 27, 2021.
[13]  The White House, Fact Sheet: The American Jobs Plan, March 31, 2021.
[14]  Senate Committee on Environment and Public Works, The Republican Roadmap: A Framework to Improve the Nation’s Infrastructure. April 22, 2021.
[15]  The White House, Fact Sheet: President Biden Announces Support for the Bipartisan Infrastructure Framework, June 24, 2021.

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