US Infrastructure Bill: What’s in and What’s Not?

  • by THO
  • 3 weeks ago
  • news
  • 1

US Infrastructure bill: What’s in and what’s not?

US house on Friday passed a USD 1.2 trillion bipartisan plan to rebuild roads, bridges, highways, for electric school buses, modernize the public works system and boost broadband internet across the country. The bill, which would provide USD 550 billion in new federal spending over five years, now has been sent to US President Joe Biden to sign into law. It is projected by the White House that investment would add about 2 million jobs per year over the next decade and is seen as one of the most ambitious projects to repair the country’s crumbling infrastructure in the last few decades.

This bill was one of the key highlights of President Joe Biden’s campaign in the run-up to the presidential elections in 2020 and comes as a significant achievement to have been introduced in the first year of coming to power. The bill cleared on a 228-206 vote after weeks of intraparty negotiations. The Democrats insisted on tying the infrastructure bill with the USD 1.75 trillion social welfare bill for healthcare, education, and climate change initiatives. If passed, it would turn out to be the biggest US safety bill in more than 50 years.

Below is the breakdown of the bill:

Roads and bridges

The bill provides USD 110 billion to repair the nation’s highways, bridges, and roads. According to the White House, 173,000 miles of highways and major roads and 45,000 bridges are in poor condition. The bill provides USD 40 billion for bridges which is the single largest dedicated bridge investment since the construction of the interstate highway system.

Public transport

USD 39 billion has been set aside for public transportation systems, to improve accessibility for people with disabilities and to provide capital to local and state governments to buy zero-emission and low-emission buses. According to the Department of Transportation, currently, the repair backlog is more than 24,000 buses, 5,000 rail cars, 200 stations, and thousands of miles of track and power systems.

Passenger and freight rail

The infrastructure bill provides USD 66 billion for the improvement of 457 miles long Northeast Corridor and other rail routes of the US. It is the largest federal investment in passenger rail service.

Electric vehicles

The bill will spend around USD 7.5 billion on electric car charging stations which would eventually help in reducing pollution and tackling climate change. The bill also has USD 5 billion provided for the purchase of electric school buses and hybrid buses thereby reducing dependence on school buses that run on diesel.

Internet access

USD 65 billion is being provided for broadband internet access with an aim to improve internet services for rural areas, low-income families, and tribal communities. The money would be available through states by grants.

Modern electric grid

The bill aims to provide USD 65 billion to improve the reliability and resilience of the nation’s power grid to protect against the widespread power outages that have become more frequent in recent years. The government aims to use carbon capture technologies and more environmentally-friendly electricity sources like clean hydrogen.


The bill contains USD 25 billion reserved to improve runways, gates, and taxiways at airports and to improve terminals. It will also improve old infrastructure at air traffic control towers.

Water and wastewater

The bill would spend USD 55 billion on water and wastewater infrastructure to improve the safety of drinking water. The bill contains USD 15 billion to replace the lead pipe systems and USD 10 billion to tackle water contamination from PFAS.

How does the US government plan to infuse this capital into the system?

The package includes USD 519 billion in offsets as depicted in the figure below. Experts, however, argue that the infrastructure bill has not been fully paid for and would lead to an increase in the US federal deficit.

Source: Tavaga Research

What was still missing in the infrastructure bill?

The infrastructure bill left out some nontraditional infrastructure investments that President Joe Biden had promised like caregiving for ageing Americans and for workforce training — provisions that Republicans argued did not belong in an infrastructure bill. Corporate tax hikes were also missing from the bill, which the President had proposed earlier to pay for the spending.

Impact of the infrastructure bill for India

The global metal industry has garnered a lot of investor interest this year due to a rebound in economic activity since the pandemic and the resultant surge in commodity prices. India also has plans to spend more than 100 trillion rupees over the next four years on infrastructure projects. This ambitious plan covers not just roads, railways, ports, and airports but also projects in renewable energy, agriculture, as well as industrial and social infrastructure.

The restart of the domestic investment cycle post-pandemic coupled with strong demand from China and the US could further support the strong demand in commodity markets. The bill is expected to boost revenues from exports for Indian companies such as metals, truck axle forging providers, large diameter pipe manufacturers, and a few select auto ancillary companies.

Disclaimer – This written report is only for educational purposes. Consult your financial advisor before investing.

Source link

Compare listings

%d bloggers like this: