MA

Biden Plan Would Fund Major SLED Infrastructure Investments from 2022 to 2027

Published: September 27, 2021

SLED Market AnalysisAdministration TransitionArchitecture Engineering and ConstructionInfrastructure

In August, the U.S. Senate passed an amended version of H.R. 3684 (titled Infrastructure Investment and Jobs Act), effectively creating a “bipartisan infrastructure bill” that is now being finalized in reconciliation committee.

Prospects for final passage of the infrastructure bill look promising as this is written.  Congressional Democratic leadership agreed to pass the final version of the infrastructure bill separately from the Biden administration’s proposed $3.5 trillion “human infrastructure” plan, which will allow nine Democratic holdouts in the House to vote for this “hard” infrastructure plan along with hesitant Senators Manchin (D-WV) and Sinema (D-AZ).

A final vote is expected in late September or October.  However, because another coalition of House Democrats demanded that the bipartisan and human infrastructure bills be advanced concurrently, it is unclear as to whether both pieces can be crafted so quickly and what the political repercussions might be of pushing them at the same time.  The primary risk is that Congressional opponents will be able to paint both pieces of legislation with one broad brush as tax-and-spend, deficit-boosting federal waste—a potent message on the eve of 2022 midterm elections.  However, Congressional Democrats have determined that they can at least pass the bipartisan infrastructure bill on party-line votes if necessary.

Thus, this article launches a three week series wherein Deltek’s state, local, and education (SLED) analyst team will cover the following components of the infrastructure bill with individual, deeper-dive articles:

[NOTE: As articles are posted and updated, they will be linked to the list above.  Bookmark this article and check back for updates in coming weeks.]

According to reporting in The Washington Post, based on the Congressional Budget Office’s cost estimate for the legislation, the majority of the infrastructure funding will flow after federal fiscal year (FFY) 2024.

Of the infrastructure legislation’s $566 billion in new spending, only about $20 billion will be spent by the end of fiscal year 2022…Roughly $125 billion, or about a quarter of the funding, will go out by September 2024…Annual federal spending from the bill ramps up from there in fiscal years 2025, 2026 and 2027.

Much of this delay is due to the fact that many of the major spending areas outside of roads and bridges and mass transit will take many months or years to get off of the drawing boards.  States are required to have multi-year transportation plans and the infrastructure needs of struggling transit systems are well documented.  However, in areas where infrastructure investment has been stagnant or non-existent in recent years no list of “shovel ready” projects exists.

While this timing doesn't bode well for the infrastructure spending as a form of short-term economic stimulus, it does provide contractors with adequate time to get a bead on potential upcoming projects.

Click here to see how much each state will receive in total or per capita.