Biden’s Infrastructure Proposal: What You Need to Know Now

Back To News
May 21, 2021

President Biden’s $4.3-trillion infrastructure proposal is a key part of his domestic agenda and addresses a number of Democratic proposals such as $100 billion for school construction and $225 billion to expand paid family and medical leave. Biden’s proposal will be funded by raising corporate taxes up to 28% – basically repealing that part of the Trump tax cuts while promising no person making under $400,000 will pay more in taxes.

To meet the self-imposed goal of signing a bill into law by Labor Day, the Biden Administration must choose between two very different legislative strategies. The first strategy is to attempt to negotiate a bipartisan deal with Republicans. The second strategy is passing the legislation using the blunt force of the reconciliation process.

But, in a 50-50 Senate, the loss of one democratic vote means the reconciliation approach would fail, and as of now both Sen. Joe Manchin (D-WV) and Krysten Sinema (D-AZ) have indicated they would be that vote. This leaves Biden in a position where he must try to negotiate with Republicans, or at least be seen as credibly trying by Democratic Senators.

To gauge Republican intentions, Biden has hosted several Oval Office meetings with Republicans, with the idea that if they can convince a handful of Republicans to support his approach, several more will follow. While the GOP’s first $568 billion counteroffer to Democrats was rejected, their next offer may be closer to $800 billion—a total referenced as acceptable by Minority Leader Mitch McConnell (R-KY). Also, Republicans are focused on ”hard infrastructure” with some flexibility, which could cause Biden some problems since over half of his proposal is “human infrastructure” such as tax credits, child-family support, education, and in-home care, and would likely be a non-starter for Republicans in a bipartisan package.

Four points to know going forward:

  1. Many insiders believe that the Biden Administration needs to decide around Memorial Day to either pursue bipartisanship or go the reconciliation route due to the size and complexity of the bill.
  2. The proposal may change dramatically on Congress drafts actual legislation. There are several policy items Democrats really care about that may not make it in a final bill no matter which approach is chosen due to Republican opposition or the arcane rules of reconciliation.
  3. A bipartisan bill would be a huge win for President Biden and would allow him to say he made Washington work again.
  4. Finally, Biden has repeatedly said he would not raise taxes on those earning under $400,000, so if this bill is seen as doing so, even inadvertently, it could lead to a “No New Taxes” redux like when then Pres. George H.W. Bush broke his promise and then lost reelection.

Meanwhile, IIBEC continues to work with our construction colleagues to encourage Democrats to include the E-Quip Act in the bill (described in a previous IIBEC post). A provision in the bill would provide a 10-year expensing of high-performance roofs and require them to be designed, installed, operated, and maintained by credentialed professionals.