Biden’s 1.2 trillion USD Plan: a Compromise with the Other Side

On March 31st, President Biden announced an ambitious plan to rebuild America’s infrastructure and create jobs, hence the name ‘the American Jobs Plan’ or AJP, worth $2.25 trillion in total [1]. However, this proved to be politically unfeasible as Republicans have argued that it goes far beyond infrastructure and they rejected corporate tax increases [2, 3]. After various suggestions to amend the proposal were shot down by both parties, the White House shifted strategy towards a two pronged-approach [4, 5]. One bipartisan bill focusing on physical infrastructure and one reconciliation bill that can be passed by Democrats only [5].

by Reinout Debergh

11 Oct, 2021

How It Came To Be

A bipartisan group of senators including Republicans Mitt Romney (Utah), Rob Portman (Ohio) and Democrats Joe Manchin (West-Virginia), Kyrsten Sinema (Arizona) together with the bipartisan House Problem Solvers Caucus worked on negotiating the bipartisan infrastructure bill [6]. The latter is a group of representatives from across the US, equally divided between Democrats and Republicans, aiming to find agreement on several key issues [7].

On June 10th, the group reached a compromise on an infrastructure bill spending $1.2 trillion over eight years [3]. On August 10th, the US Senate approved the bill with 19 Republicans voting in favour alongside the 50 Democrats [6, 8]. However, infighting with the Democratic Party between moderate and progressive Democrats has delayed a vote in the House several times [9, 10]. On November 6th, the House finally passed the bill with 228 in favour (including 13 Republicans) and 206 against (including 6 Democrats) [11].

Transport

Transport accounted for 29% of US greenhouse gas (GHG) emissions in 2019, making it the biggest source of emissions and a key sector to address [12]. Measures (in USD) include:

a 6.24 billion Carbon Reduction Program to reduce emissions from transport;
250 million to reduce traffic congestion
250 million to lower emissions at ports and limit idling of trucks;
a 2.5 billion Charging and Refueling Grant Program aiming to deploy publicly accessible alternative fuel vehicle charging infrastructure;
a 5 billion EV Charging Formula Program;
a 5 billion Clean School Bus Program;
a 250 million Electric or Low-Emitting Ferry Pilot Program;
measures to improve energy efficiency in airports (funding amount unclear) [13, 14];
39 billion for public transit to expand transportation systems;
66 billion to improve Amtrak’s rail network [15].

Energy

With 25% of emissions in 2019 coming from electricity generation, energy is the second biggest emission source [12]. Measures (in USD) include:

65 billion to improve grid resilience [13];
7.67 billion to improve the supply chain, particularly for large-capacity batteries and critical materials and increase recycling;
763.6 million for hydropower;
550 million for the Energy Efficiency and Conservation Block Grant Program [14]. Its aim is to ‘develop, promote, implement, and manage energy efficiency and conservation projects’ [16];
250 million for energy efficiency grants and loans;
225 million to improve energy efficiency in buildings;
40 million for an energy auditor training program [14].

Breakthrough technologies

This includes 8.685 billion USD for carbon capture, utilisation and storage (CCUS) to develop a carbon capture, utilisation and storage network through the financing of various projects including direct air capture. There is also 9.5 billion USD to speed up the research, development, demonstration, and deployment of hydrogen from clean energy sources [13].

Adaptation

Given that climate change is already happening now, adaptation is also needed. Measures (in USD) include:

an 8.7 billion program called Promoting Resilient Operations for Transformative, Efficient and Cost-saving Transportation (PROTECT) to increase the resilience of natural infrastructure such as wetlands;
a 500 million Healthy Streets Program to mitigate the urban heat island effect [13];
55 billion for clean drinking water [17];
4.5 billion for FEMA (Federal Emergency Management Agency);
8.3 billion for Western water infrastructure;
17.323 billion for the Army Corps of Engineering including flood management, restoration of ecosystems, infrastructure and storm risk management [13].

Other

Industry: 550 million USD to improve energy efficiency, material efficiency, cybersecurity, productivity or reduce waste production, greenhouse gas emissions, non-greenhouse gases;
Methane: 4.7 billion USD for orphaned well site plugging, remediation and restoration;
100 million USD to improve recycling [14].

Energy Act 2020

The bill also includes the authorisation of appropriations (in USD) for the Energy Act 2020:

3.589 billion for carbon capture;
3.211 billion for advanced nuclear reactors;
505 million for energy storage;
an additional 264 million for renewable energy;
250 million to tackle industrial emissions;
146.4 million for water power projects [14].

Approval of this bill is an important step forward but leaves out key climate measures such as a Clean Electricity Standard. According to Ed Markey (Democrat Senator from Massachusetts), legislators will “deal with the climate crisis in the magnitude, scope and scale that’s required? in the reconciliation bill, also called the “Build Back Better Act” (BBBA) [18]. Whether the BBBA will be realised in the scope envisaged, is doubtful given Democratic infighting and the need for every Democrat to vote in favour of it [10, 19].

[1] Kun C., Hongxu W., American Jobs Plan Beckons More Uncertainties, Modern Diplomacy, URL:https://moderndiplomacy.eu/2021/05/21/american-jobs-plan-beckons-more-uncertainties/, accessed on 28/08/2021;
[2] Carey L. et al., The American Jobs Plan Gets Serious about Infrastructure and Climate Change, CSIS, URL:https://www.csis.org/analysis/american-jobs-plan-gets-serious-about-infrastructure-and-climate-change, accessed on 28/08/2021;
[3] Bopp et al., Bipartisan Group of Senators Strikes Infrastructure Deal, But Challenges For Senate Passage Remain, Gibson Dunn, URL: https://www.gibsondunn.com/bipartisan-group-of-senators-strikes-infrastructure-deal-but-challenges-for-senate-passage-remain/, accessed on 28/08/2021;
[4] Hunnicutt T. et al., Biden shifts infrastructure talks to new bipartisan Senate group, Reuters, URL:https://www.reuters.com/world/us/republican-negotiator-expects-no-infrastructure-deal-with-biden-tuesday-2021-06-08/?utm_campaign=Carbon%20Brief%20Daily%20Briefing&utm_content=20210609&utm_medium=email&utm_source=Revue%20Daily, accessed on 28/08/2021;
[5] Wilkie C., Next week will be a major test in Biden’s quest for a bipartisan infrastructure deal, CNBC, URL:https://www.cnbc.com/2021/05/14/biden-infrastructure-bill-progress-in-talks-with-gop-senators.html, accessed on 28/08/2021;
[6] Pramuk J., Senate passes $1 trillion bipartisan infrastructure bill, sending key part of Biden’s economic agenda to the House, CNBC, URL:https://www.cnbc.com/2021/08/10/senate-to-pass-bipartisan-infrastructure-bill.html, accessed on 29/08/2021;
[7] About the Caucus, Problem Solvers Caucus, URL:https://problemsolverscaucus.house.gov/about, accessed on 29/08/2021;
[8] Marienthal P., The US Senate approves a $ 1.2 trillion bipartisan infrastructure bill. Pa.Casey and Toomey split by vote, Pennsylvania News Today, URL:https://pennsylvanianewstoday.com/the-us-senate-approves-a-1-2-trillion-bipartisan-infrastructure-bill-pa-casey-and-toomey-split-by-vote/205083/, accessed on 29/08/2021;
[9] Watson, K., The latest on what’s happening with the bipartisan infrastructure bill, CBS News, https://www.cbsnews.com/live-updates/the-latest-on-whats-happening-with-the-bipartisan-infrastructure-bill/, accessed on 03/10/2021.
[10] Aratani, L., Pelosi shifts infrastructure bill deadline to 31 October amid Biden frustration, The Guardian, https://www.theguardian.com/us-news/2021/oct/02/pelosi-new-infrastructure-bill-deadline-31-october-biden-frustration, accessed on 03/10/2021.
[11] Grayer, A., Raju, M., Foran, C., Congress passes $1.2 trillion bipartisan infrastructure bill, delivering major win for Biden, CNN, https://edition.cnn.com/2021/11/05/politics/house-votes-infrastructure-build-back-better/index.html, accessed on 06/11/2021.
[12]Sources of Greenhouse Gas Emissions, United States Environmental Protection Agency, URL: https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions, accessed on 24/09/2021.
[13] Armstrong et al., Infrastructure Investment and Jobs Act: Summary of Bipartisan Infrastructure Legislation, Holland & Knight, Infrastructure Investment and Jobs Act: Summary of Bipartisan Infrastructure Legislation | Insights | Holland & Knight (hklaw.com), accessed on 24/09/2021.
[14] Infrastructure Investment and Jobs Act, H.R.3684, 117th Congress (2021-2022), Text – H.R.3684 – 117th Congress (2021-2022): Infrastructure Investment and Jobs Act | Congress.gov | Library of Congress, accessed on 24/09/2021.
[15] Jalonick M.C., What’s inside the Senate’s bipartisan infrastructure bill, AP News, What’s inside the Senate’s bipartisan infrastructure bill (apnews.com), accessed on 24/09/2021;
[16] Energy Efficiency and Conservation Block Grant Program, Weatherization and Intergovernmental Programs Office, Energy Efficiency and Conservation Block Grant Program | Department of Energy, accessed on 24/09/2021.
[17] Sprunt B., Here’s What’s Included In The Bipartisan Infrastructure Bill, NPR, Senate Bipartisan Infrastructure Bill Details: Transportation, Electric Cars : NPR, accessed on 24/09/2021.
[18] Daly, M., Bipartisan bill leaves out key climate, clean energy steps, AP News, https://apnews.com/article/joe-biden-business-climate-environment-and-nature-bills-e0d52ee9e29f72b1bee85c47fa7ae878, accessed on 03/10/2021.
[19] Quinn, M., Watson, K., What’s in the $3.5 trillion reconciliation, bill?, CBS News, https://www.cbsnews.com/news/budget-reconciliation-bill-build-back-better-act/, accessed on 03/10/2021.