The $1 Trillion Infrastructure Bill Paves The Way For Billions Of Dollars To Pour Into CRE
One piece of President Joe Biden's key agenda for 2021 has finally made it through a fractious Congress.
Late Friday night, the House of Representatives voted to pass the Bipartisan Infrastructure Investment and Jobs Act, sending a $1.2 trillion bill to Biden's desk by a vote of 228-206, with 13 Republicans voting in favor and six Democrats voting against, CNN reports.
The bill's passage will secure half of the Democratic Party's two-pronged spending plan, the second being the Build Back Better social spending bill.
The bipartisan infrastructure bill contains $550B of new spending, partially funded by a $40B investment on enforcement for the Internal Revenue Service, projected to bring back $100B in additional tax revenue, as well as a $20B program to bring in $180B in private investment. The Congressional Budget Office estimates that the bill will add $256B to the national deficit over the next 10 years, CNN reports.
Among the spending targets in the infrastructure bill are $110B for repairing and updating roads and bridges, $65B for improving the country's broadband internet capabilities, $65B to rebuild electric grids, $55B to upgrade water infrastructure such as replacing the nation's lead pipes, $39B for public transit improvements, $66B in rail network improvements, $25B for airport improvements, $21B for environmental remediation at brownfield and Superfund sites and $17B for port infrastructure, CNN reports.
Missing from the bipartisan bill is specific spending on mitigating the environmental impact of the country's built environment, among other provisions that Biden initially promoted as part of the $2.25 trillion American Jobs Plan he proposed soon after being inaugurated, which kicked off months of negotiations.
One small piece of the bill that could have an outsized impact on commercial real estate is a $1B fund for reconnecting communities, most likely to be neighborhoods of color, separated or otherwise disrupted by highways and other pieces of infrastructure in the 20th century, CNN reports. A $50B provision in the bill to improve resilience against extreme weather and national disasters and the environmental remediation component could both directly impact or create commercial real estate projects.
The passage of the bipartisan infrastructure bill represents a reversal from many House progressives, who had refused to approve it unless it was paired with Biden's Build Back Better social spending bill. The six no votes from Democrats came from progressives who refused to give up on that structure, despite capitulation from Rep. Pramila Jayapal, the chair of the House Progressive Caucus, CNN reports.
Soon after passage of the infrastructure bill, the House also passed a rule allowing Build Back Better to be voted on during the week of Nov. 15, though Sens. Kyrsten Sinema and Joe Manchin, the moderates who negotiated for cutbacks on the bills' spending, now say they won't vote on the social spending bill until the CBO evaluates Biden's claim that it wouldn't add to the national deficit, CNN reports. A CBO evaluation could take weeks beyond when the new rule would allow for a vote.
