US Senate Passes Infrastructure Bill

By Malcolm Ramsay

The U.S. Senate has passed a record infrastructure bill, progressing plans for investment of more than US$1 trillion and significant upgrades to the country’s transport and infrastructure networks. 

The 2,700-page Infrastructure Investment and Jobs Act was passed by a bilateral majority of 69-30 in the 100-member Senate after 50 hours of debate. But its passage to law still faces a number of challenges. It will now move to the House of Representatives where it must be approved before it can proceed into law. 


US$550 billion infrastructure spending

The bipartisan bill includes total investment of about US$1.2 trillion of which an estimated US$550 billion will be for new federal funding for infrastructure over the next five years. For the majority of breakbulk carriers, the approval of this infrastructure investment is likely to provide a vital boost, as major developments are kick-started and decisions on long-paused projects are finalized.

“We’re on the cusp of an infrastructure decade that I truly believe will transform America,” President Biden said following the Senate decision, calling it “a historic investment in the nation’s roads and highways, bridges and transit” that would make “infrastructure more resilient.”

From this total, roughly US$110 billion is earmarked for roads, bridges and major projects; a further US$66 billion will go to passenger and freight rail; US$39 billion for public transit; US$25 billion for airport upgrades; US$17 billion for port infrastructure; US$11 billion for transportation safety programs; US$7.5 billion for electric vehicles; US$7.5 billion for zero and low-emission buses and ferries; and $1 billion for revitalization of communities.

The funding is much needed, with the U.S. currently ranked outside of the top 10 for transportation infrastructure, despite the country’s economic power. About one-fifth of major highways and roads are deemed to be in poor condition as well as an estimated 45,000 bridges 

Chris Spear, CEO of the American Trucking Association, hailed the investment as long overdue, “For nearly three decades, our nation and industry have been held hostage by empty promises – all talk, no action. Today, the Senate put America ahead of itself. Passage of this bipartisan infrastructure bill is a ground-breaking step toward revitalizing America’s decaying roads and bridges, supporting our supply chain and economy with the foundation they need to grow, compete globally and lead the world.”


Grave Concerns

Although industry has been broadly supportive of the proposed investment, there remain a number of uncertainties and concerns for supply chains across the country while the final shape of the bill is still in the balance. 

Chris Jahn, CEO of industry body the American Chemistry Council (ACC) said that, while the organisation commends Senate lawmakers for approving legislation “that will help bring America’s infrastructure into the 21st Century – including provisions that will spur the development and use of advanced materials, many of which rely on chemistry – we remain gravely concerned and baffled that the package includes new taxes on materials that serve as building blocks for U.S. manufacturing.“

The current bill includes provision for new Superfund excise taxes on 42 chemicals, critical minerals and metallic elements, with Jahn predicting that this could threaten America’s “global manufacturing competitiveness” and ultimately lead to price rises on materials and components vital for infrastructure development.

For breakbulk providers working in the downstream or chemicals sector this may mean further complexity for future projects.

The National Association of Chemical Distributors, or NACD, also voiced concern over some implications of the bill, noting that the superfund tax would have "negative impacts" that could entirely "cancel out" any positive aspects of the bill.

“Our industry would benefit from some relaxation of additional tariffs on China put in place during the Trump administration. Thus far, the new administration has yet to meaningfully relax these restrictions and a rollback would be a positive development for the chemical industry,” said Eric Byer, CEO of the NACD.

Likewise, there was concern from the Owner-Operator Independent Drivers Association, or OOIDA, due to the lack of measures to increase truck parking nationwide. OOIDA, which represents small-business truckers, highlighted urgent safety issues which are not addressed in the legislation.

“Truckers are routinely expected to simply be thankful for more highway funding and accept the fact all their unique needs are ignored time and time again,” said Todd Spencer, CEO of OOIDA. “Years of inaction on addressing the lack of truck parking has created a nationwide crisis that threatens the safety of millions of professional drivers, and increasingly the motoring public. By failing to include the Kelly/Lummis amendment, the Senate has missed yet another opportunity to enact meaningful policies that would immediately improve drivers’ lives and highway safety.”

Hours after the infrastructure bill's passage, the Senate approved an additional US$3.5 trillion in spending through a process known as budget reconciliation, in which U.S. Senate Democrats were able to gain passage by a simple majority rather than the 60 votues usually required, and avoid a potential filibuster from Republican senators. The budget resolution, which passed 50-49 along party lines, directs committees to craft a bill that would spend up to US$3.5 trillion on climate initiatives, paid leave, child care, education and health care.

With House Democrats holding only a slim majority in voting, there is great uncertainty whether the infrastucture bill passes, let alone passing both bills together, and Biden and Democratic progressives expect.