After eight months of negotiation in the US Congress, finally the House of Representatives approved late on Friday the 5th the “Infrastructure Investment and Jobs Act”.
With 228 votes in favor and 206 against, the decision had the support of most members of the Democratic Party (all its representatives except 6 voted in favor) and the rejection of the majority of the Republican Party, although 13 of its representatives also gave their approval. Given that the law had already been approved by the Upper House or Senate in August by a wide majority (69-30), it only awaits the presidential signature to become effective.
This is a cornerstone of Biden’s legislative agenda. It is an essential element of the “Build Back Better” plan, one of the pillars of his electoral program. We are talking about an investment of more than 1.2 trillion dollars, of which $550,000 million are added to spending already included in previous plans and reconfirmed by the new plan.
Although the budget approved is much lower than what was initially sought, it is the largest infrastructure investment plan in the US in 65 years. Nothing like it had been seen since the gigantic Eisenhower Interstate Highway Program. It includes, among other things ($1B = $1 billion, or a thousand million dollars):
- $110B in roads, bridges, tunnels and other associated infrastructures
- $66B in railways (the largest investment since Amtrak was created in 1971)
- $65B to improve the broadband telecommunications network
- $65B for the renovation of the electricity grid, promoting the use of renewable energies
- $55B to improve infrastructure for the supply of drinking water
- $39B for improvements in public transit
- $25B for improvements in airport infrastructure (runways, terminals, control towers, etc.)
- $18B to fight climate change, in particular by developing reliable and clean carbon dioxide capture technology and nuclear energy
- $17B for improvements in seaports
- $15B to promote the use of electric vehicles, with measures such as the creation of charging stations and the purchase of electric and hybrid school buses
- $11B for improvements in transport security
- $2B for improvements in cybersecurity at all levels, which are added to the almost $10B already included for this issue in the 2022 fiscal budget
The plan is associated with various financing mechanisms such as the sale of the electromagnetic spectrum for 5G telephony, tightening of cryptocurrency taxation and other measures that will require only $256B of new net spending, which would lead to a 0.1% increase in the federal deficit, but it is expected to be significantly offset by the benefit in growth and tax collection associated with the new infrastructure.
The new law has the explicit support of more than 100 business organizations of the caliber of the US Chamber of Commerce or the National Association of Manufacturers.
The associated budgets will be managed in the coming years by the different levels of the US government (federal, state and local). A good part will be translated into public contracts granted by the corresponding agencies of the state or states in which the investments are made. We recently published the article “How to get contracts from the world’s largest client: the US Government” , a topic we will continue to talk about in the coming months.
This law will create opportunities of maximum interest for international companies in multiple sectors, such as civil engineering and construction, transportation, telecommunications, energy, water supply, cybersecurity, technology against climate change, etc. The new investments take place in a context in which there is a low unemployment rate: 4.6% last month, the lowest level in 19 months very close to only 1 point above the pre-pandemic level of 3.6 %, which was the lowest since 1970. It also occurs at a time when there is great shortage of skilled labor in the country for a high number of sectors, especially in technological. In cybersecurity alone, it was estimated a few months ago that there are more than half a million unfilled positions.
For all these reasons, international companies with capabilities that are relevant for the new infrastructure plan must analyze the enormous opportunities that open up for the coming years in the US.