Infrastructure Negotiations in 2021: How They Unfolded and Results

Infrastructure was a central legislative focus in 2021. "Generations from now, people will look back and know this is when America won the economic competition for the 21st century," said President Joe Biden in a statement released November 6, 2021, shortly after the House of Representatives passed the $1.2 trillion bipartisan Infrastructure Investment and Jobs Act by a 228-to-206 vote. He signed it into law on November 15, 2021

Progressives had threatened to vote against the measure but, at the last minute, agreed to support it after moderates promised they would back the companion social safety net and climate bill, officially known as the Build Back Better Act (BBBA)—provided an upcoming cost score by the Congressional Budget Office (CBO) showed that the plan would not add to the budget deficit.

Ultimately, the BBBA would not come to pass, though parts of it were later included in the Inflation Reduction Act, a different bill signed into law in 2022.

The $1.2 Trillion Bipartisan Infrastructure Package

The 2,702-page Infrastructure Investment and Jobs Act contained $550 billion in new spending. The $1.2 trillion figure came from including additional funding normally allocated each year for highways and other infrastructure projects.

New spending included:

• $110 billion for roads and bridges. In addition to construction and repair, the funding also helped pay for transportation research at universities, funding for Puerto Rico’s highways, and “congestion relief” in American cities.
• $66 billion for railroads. Funding included upgrades and maintenance of America’s passenger rail system and freight rail safety but nothing for high-speed rail.
• $65 billion for the power grid. The bill would fund power lines and cable updates and provide money to prevent power grid hacking. Clean energy funding was also included.
• $65 billion for broadband. Funding included to expand broadband in rural areas and low-income communities. Approximately $14 billion would help reduce Internet bills for low-income citizens.
• $55 billion for water infrastructure. This funding included $15 billion for lead pipe replacement, $10 billion for chemical cleanup, and money to provide clean drinking water in tribal communities.
• $50+ billion for cybersecurity and climate change. This resilience funding would protect infrastructure from cybersecurity attacks and address flooding, wildfires, coastal erosion, droughts, and other extreme weather events.
• $39 billion for public transit. Funding here is provided for upgrades to public transit systems nationwide. The allocation also includes money to create new bus routes and help make public transit more accessible to older and disabled Americans.
• $25 billion for airports. This allocation provided funding for major upgrades and expansions at U.S. airports. Air traffic control towers and systems would receive $5 billion for upgrades.
• $21 billion for the environment. These monies would be used to clean up superfund and brownfield sites, abandoned mines, and old oil and gas wells.
• $17 billion for ports. Half of the funds in this category would go to the Army Corps of Engineers for port infrastructure. Additional funds would go to the Coast Guard, ferry terminals, and reduction of truck emissions at ports.
• $11 billion for safety. Appropriations here would address highway, pedestrian, pipeline, and other safety areas, with highway safety getting the bulk of the funding.
• $8 billion for western water infrastructure. Ongoing drought conditions in the country's western half would be addressed through investments in water treatment, storage, and reuse facilities.
• $7.5 bill for electric vehicle charging stations. The Biden Administration asked for this funding to build significantly more charging stations for electric vehicles nationwide.
• $7.5 billion for electric school buses. With an emphasis on bus fleet replacement in low-income, rural, and tribal communities, this funding would allow those communities to convert to zero-emission buses.

The Cost of the Build Back Better Act

While passage of the bipartisan Infrastructure Investment and Jobs Act created a path to invest billions of dollars in roads, bridges, water systems, transit, and broadband, the passage of the BBBA and the massive investment in human infrastructure it represents was far from ensured, particularly due to concerns about its cost.

In November 2021, the Congressional Budget Office estimated that the BBBA would increase the deficit by $360 billion over 10 years. This figure, the CBO noted, did not include any additional revenue generated from enhanced enforcement of tax collections, though it did include the $275 billion in funding for that enhancement. The Treasury Department estimated that additional revenue would amount to $200 billion. By subtracting the $200 billion in additional revenue from the $360 billion projected deficit, the deficit would be reduced to $160 billion or $16 billion annually.

Critics of the bill maintained that the BBBA was "riddled with design errors" and that if its temporary provisions became permanent, the bill would further increase the deficit. On the other hand, the CBO estimated that it would also lead to major offsets, including through recovered health care cost, business taxes, and retirement plan modifications.

The House of Representatives passed and sent the BBBA to the Senate on Friday, November 19, 2021. In the Senate, the Build Back Better Act was contentious. Discussion centered around gaining support from two moderate Democratic Senators, Kyrsten Sinema (D-AZ) and Joe Manchin (D-WV), who refused to support the legislation in its original state.

How the Build Better Act Evolved

An Original $3.5 Trillion Proposal

The original Democratic FY2022 Budget Resolution Agreement Framework memorandum was designed to enact President Biden's Build Back Better agenda as first framed. This proposal, often called an investment in human infrastructure, was far-reaching and ambitious, with a $3.5 trillion price tag. It listed the following amounts and areas to be addressed:

• $135 billion for the Committee on Agriculture, Nutrition, and Forestry. Funding to address forest fires, reduce carbon emissions, and address drought concerns.
• $332 billion for the Banking Committee. Including investments in public housing, the Housing Trust Fund, housing affordability, and equity and community land trusts.
• $198 billion for the Energy and Natural Resources Committee. This would develop clean energy.
• $67 billion for the Environment and Public Works Committee. These monies would fund low-income solar and other climate-friendly technologies.
• $1.8 trillion for the Finance Committee. This part of the bill was for investments in working families, older people, and the environment. It included a tax cut for Americans making less than $400,000 a year, lowering the price of prescription drugs, and ensuring that wealthy and large corporations pay their fair share of taxes.
• $726 billion for the Health, Labor, Education, and Pensions Committee. This addressed universal pre-K for three- and four-year-olds, childcare for working families, tuition-free community college, funding for historically black colleges and universities, and expanding the Pell Grant for higher education.
• $37 billion for the Homeland Security and Governmental Affairs Committee. This would have electrified the federal vehicle fleet, electrified and rehabbed federal buildings, improved cybersecurity infrastructure, reinforced border management, invested in green-materials procurement, and invested in resilience.
• $107 billion for the Judiciary Committee. These funds addressed establishing "lawful permanent status for qualified immigrants."
• $20.5 billion for the Indian Affairs Committee. This addressed Native American health and facilities, education and facilities, housing and energy programs, resilience and climate programs, BIA programs and facilities, Native language programs, and the Native Civilian Climate Corps.
  
• $18 billion for the Veterans Affairs Committee. This funds upgrades to veteran facilities.
• $83 billion for the Commerce Committee. This would have gone to technology, transportation, research, manufacturing, and economic development investments. It funded investments in coastal resiliency and healthy oceans, including the National Oceans and Coastal Security Fund and the National Science Foundation research and technology directorate.
  

A Modified $2.3 Trillion Proposal

By the time the House passed the BBBA, its scope had been reduced, and its cost was drawn down to around $2.3 trillion. Notable exclusions in the updated version of the bill included Medicare vision and dental benefits, free community college, and an income tax for billionaires. It retained the following provisions:

• $382 billion for child care and universal preschool. The plan is designed to save most American families more than half of their spending on child care by providing two years of free preschool for every three- and four-year-old in America and additional funding for childcare.
• $205 billion family and medical leave. Permanently authorizes the first-ever national paid family and medical leave guarantee for U.S. workers, providing up to four weeks of paid leave.
• $190 billion for Child Tax Credit and Earned Income Credit. The proposal extends the expanded Child Tax Credit for one year and provides additional funds to extend the expanded Earned Income Tax Credit.
• $150 billion for home care. This funding expands home care for older people and those with disabilities.
• $175 billion for housing. The plan invests in affordable housing, including the construction and rehabilitation of homes, and investments in rental assistance and housing vouchers.
• $40 billion higher ed and workforce development. The legislation will increase Pell Grants and provide post-secondary education opportunities such as apprenticeship programs for underserved communities.
• $17 billion for the Small Business Committee. This provides for small business access to credit, investment, and markets.
• $40 billion for equity and other investments. According to the White House, spending in this area will be designed to achieve equity through investments in maternal health, community-violence interventions, and nutrition.
• $5 billion in supply chain investments. These investments will safeguard our economy and support domestic job growth.
• $3 billion to support child nutrition. This investment will help expand eligibility and eliminate paperwork so more children can receive free school meals.
• $275 billion in State and Local Tax (SALT) deduction relief. This is accomplished by increasing and applying the cap over the long-term, allowing states and counties to raise more revenue to deliver essential public services.
• $130 billion in ACA credits. This money will expand affordable healthcare coverage, reduce premiums for more than 9 million Americans, and deliver healthcare to the uninsured in states not enrolled in expanded Medicaid coverage.
  
• $35 billion Medicare hearing coverage. While dental and vision coverage was not cut, Medicare recipients will have coverage for hearing aids and tests. The funding will also cover nursing home transparency and staffing standards and bolster funding for the Elder Justice Act program.
• $559+ billion for clean energy and climate. The plan proposes cutting greenhouse gas pollution by over a gigaton in 2030, reducing consumer energy costs, helping to create more clean air and water, and creating hundreds of thousands of jobs.

However, despite modifications that significantly reduced the scope and cost of the BBBA from its original form, moderate centrist Democratic Senator Joe Manchin announced in late December 2021 that he could not support the proposal. Lacking this critical support, the proposal was effectively dead.

In August 2022, Congress passed the Inflation Reduction Act to invest in energy production, scale down inflation, and lower health care costs. While this was still a substantial piece of legislation, it fell notably short of Build Back Better's original aims.

Infrastructure Negotiations Timeline

Though both Democrats and Republicans praised the $1.2 trillion bipartisan infrastructure bill, it took nearly three months after it passed the Senate to be approved by the House. Significant challenges remained to be addressed before the previously $3.5 trillion (now $2.3 trillion) Build Back Better bill reached its final stages. Here's how the process for both bills has gone so far.

• Aug. 10, 2021: Immediately after passing the bipartisan bill, the Senate voted 50 to 49 to begin debate on the $3.5 trillion infrastructure bill.
• Aug. 11, 2021: Senate Democrats passed the $3.5 trillion budget resolution 50 to 49. Democrats in the House and Senate began the time-consuming task of drafting a final product.
• Aug. 23, 2021: House Majority Leader Steny Hoyer sent a "Dear Colleague" letter to House members on August 10 stating that the House would "return to session the evening of Aug. 23, 2021" to consider the anticipated Senate budget resolution (the $3.5 trillion bill). Hoyer said the House would remain in session "until our business for the week is concluded."
• Aug. 24, 2021: The House of Representatives did pass the budget resolution, which also instructed House committees to write the $3.5 trillion legislation. To please Democratic centrists eager to pass the bipartisan $1.2 trillion bill, the resolution included a nonbinding commitment to vote on that infrastructure bill by September 27. In a statement, House Speaker Nancy Pelosi said, "In consultation with the Chair of the Transportation and Infrastructure Committee, I am committing to pass the bipartisan infrastructure bill by September 27. I do so with a commitment to rally House Democratic support for its passage."
• Sept 15, 2021: The memorandum outlining the $3.5 trillion plan recommended that congressional committees "submit legislation to the Committee on the Budget by September 15 to carry out this section, though this date is not binding." The markup was completed on time and advanced on Sept 15, 2021.
• Sept 27, 2021: The original nonbinding deadline to vote on the $1.2 trillion infrastructure package became the deadline to begin debate on the bill with a new voting deadline of Sept 30, 2021, vis-a-vis Speaker Pelosi's "Dear Colleague" letter referenced above.
• Sept 30, 2021: The new deadline to vote on the bipartisan infrastructure bill saw the passage of H.R. 5305 to extend funding and suspend the debt limit through Dec. 3, 2021, but no infrastructure bill. Instead, infrastructure was delayed so progressive and moderate Democrats could work out differences, especially on the still $3.5 trillion BBBA.
• Oct. 24, 2021: House Speaker Nancy Pelosi announced on CNN that Democrats planned to reach an "agreement" on the Build Back Better agenda and a vote on the bipartisan infrastructure bill sometime in the next week.
• Oct. 28, 2021: President Biden revealed his framework for a scaled-down Build Back Better agenda before leaving for Europe and the G20 summit. Biden's move was designed to bring progressive Democrats to vote for the bipartisan infrastructure bill ahead of the passage of the yet-to-be-formally-crafted BBBA.
• Oct. 31, 2021: In her remarks on CNN, Pelosi said the bipartisan infrastructure plan must be passed by October 31, when an extension for transportation funding programs expired. This was the new deadline for at least part of Biden's infrastructure; however, as of November 4, neither infrastructure bill had been passed.
• Nov. 5, 2021: The House passed the $1.2 trillion Infrastructure and Jobs Act, which was already passed in the Senate, allowing it to go to the president's desk for signature.
• Nov. 15, 2021: The president signed the Infrastructure and Jobs Act bill into law.
• Nov. 16, 2021: Vice President Harris and the Department of Commerce (DOC) announced the first and second sets of grants for the Tribal Broadband Connectivity Program, totaling $2.4 million. This program is receiving additional funding through the Infrastructure Investment and Jobs Act.
  
• Nov. 18, 2021: The CBO score on the Build Back Better Act was delivered to Congress, predicting a $367 billion deficit from the BBBA. Additional, not included, revenue would reduce the deficit to at least $160 billion.
• Nov. 19, 2021: The House of Representatives approved the Build Back Better Act by a 220 to 213 vote and sent it to the U.S. Senate for consideration and amendments. Debate in the Senate was expected to last several weeks.
• Nov. 19, 2021: The U.S. Department of Transportation awarded $1 billion in Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grants to 90 major projects across 47 states. This funding will be boosted by an additional $7.5 billion from the Infrastructure Investment and Jobs Act.
• Nov. 24, 2021: The USDA began accepting applications for the $1.15 billion ReConnect rural broadband program for loans and grants to state, local, or territorial governments, corporations, Native American Tribes, and limited liability companies and cooperative organizations. Funds from the Infrastructure Investment and Jobs Act will boost this program.
• Dec. 2, 2021: The EPA announced $7.4 billion in Infrastructure Investment and Jobs Act funding for states to upgrade America’s aging water infrastructure, sewerage systems, pipes, and service lines.
• Dec. 13, 2021: The Biden-Harris Administration announced an EV Charging Action Plan to achieve the President’s goal of building a national network of 500,000 electric vehicle chargers. The plan is funded by bipartisan infrastructure law's $7.5 billion allocation.
• Dec. 15, 2021: The U.S. Department of Transportation’s Federal Highway Administration (FHWA) announced $52.5 billion in funding to all 50 states and the District of Columbia under the Bipartisan Infrastructure Law.
• Dec. 16, 2021: The Federal Aviation Administration (FAA) at USDOT announced $3 billion in infrastructure funding for 3,075 airports to be used as investments to upgrade critical infrastructure.
• Dec. 16, 2021: The National Highway Traffic Safety Administration (NHTSA) at USDOT announced $260 million in funding from the bipartisan infrastructure law for highway safety programs to reduce traffic crashes.
• Dec. 16, 2021: President Biden announced "a productive call with Speaker Pelosi and Majority Leader Schumer earlier today, " he briefed the congressional leaders on a recent discussion with Senator Joe Manchin. The President indicated that Manchin "reiterated his support for Build Back Better funding at the level of the framework plan I announced in September."
• Dec. 17, 2021: EPA announced $1 billion in funding to clean up 49 Superfund sites across 24 states. Money from the Infrastructure Investment and Jobs Act will accelerate cleanup at dozens of other sites nationwide, stop toxic waste from harming communities, and create good-paying jobs. 
• Dec. 17, 2021: DOI released initial guidance for the states interested in applying for funding to cap and plug orphaned oil and gas wells that reduce methane emissions and create jobs. Initially, 26 states expressed interest in the $4.7 billion funding for well plugging, remediation, and restoration available in infrastructure programs. 
• Dec. 21, 2021: The DOE Office of Clean Energy Demonstrations will oversee $20 billion of infrastructure funding to scale up clean energy, create new, good-paying jobs for American families and workers, and reduce pollution.
• Dec. 23, 2021: The Maritime Administration announced $241 million in Port Infrastructure Development grants to improve ports, strengthen the nation’s supply chains to meet demand from the rapid economic recovery over the past year, and help ease inflationary pressures. Funding for this program will be boosted by an additional $2.25 billion through the Bipartisan Infrastructure Law.
  
• Dec. 31, 2021: The Federal Communications Commission launched the Affordable Connectivity Program, providing broadband subsidies of up to $30/month for low-income households (up to $75/month for households on Tribal Lands) and up to $100 towards the purchase of a desktop, laptop or tablet computer. Funding for this program are provided by the Infrastructure Investment and Jobs Act.
  
• Jan. 14, 2022: As part of the Infrastructure Investment and Jobs Act, the White House announced a $27.3 billion initiative to improve 15,000 bridges over the next five years in U.S. states, the District of Columbia, Puerto Rico, and tribes.
• Jan. 16, 2022: Senator Tim Kaine, in an interview on Face the Nation, told host Margaret Brennan that although the most recent version of Build Back Better was, in his opinion, dead, the core parts of the legislation—including reduced child care and education expenses, workforce training, and support for workforce health care—would pass.

The Bottom Line

Major infrastructure bills were a significant subject of debate in 2021. The Infrastructure Investment and Jobs Act, signed into law in November 2021, sought to improve the infrastructure of the U.S. and the lives of its citizens, by allocating funds to improve roads, bridges, broadband, water, airports, and more. The Inflation Reduction Act of 2022 was a stripped-down version of the Build Back Better Act, and included funding for energy production, lowering inflation, and reducing health care costs.