US Senate releases $1tr bipartisan infrastructure bill

HOUSTON (ICIS)–The long-awaited text of infrastructure bill was recently unveiled in the US Senate after an extensive negotiation period, the $1tr in spending aims to renovate bridges, roads, rail, public transit, the electric grid, and other infrastructure.

The over 2,700-page bill includes $550bn in new federal spending over five years. It invests $110bn to rebuild the nation’s roads, bridges, $66bn for passenger and freight rail, $65bn for high-speed internet deployment, $17.3bn for ports and waterways, $55bn for clean water including funding to address PFAS contamination, and $73bn for renovating the electric grid.

Also included in the package is $7.5bn for zero-and low- emissions buses and ferries aiming and another $7.5bn to build a network of electric vehicle chargers.

“We are encouraged to see that the Senate’s latest proposal contains numerous provisions that help promote the development and use of the advanced materials needed to bring our nation’s infrastructure into the 21st Century,” said Chris Jahn, President and CEO of the American Chemistry Council.

“The legislation could allow our industry to contribute to building out a stronger electric vehicle network, increasing energy efficiency and repairing aged water systems,” he added.

The National Association of Chemical Distributors (NACD) also commended Senate lawmakers for reaching a consensus on the infrastructure bill, adding that the bill is a step in the right direction that would work to address maintenance backlogs and reduce congestion at US ports across the country and improve the nation’s rail network.

The bipartisan bill, which is a key part of President Joe Biden’s agenda will now enter an amendment process which is expected to last a few days due to its prior lengthy negotiation process between Democrats and Republicans in the Senate.

The bill falls short of the Biden Administration’s $2.2tr proposal unveiled in March, branded as the American Jobs Plan, which not only included federal spending for traditional infrastructure such as roads and bridges but had proposals to expand “human infrastructure.”

As the name suggests, the proposals here centred on investments to the social welfare net, including paid family leave, expanded child tax credit, and measures to tackle climate change.

Funding the bill

The bill is expected to be paid for with a variety of funding sources, including repurposing $205bn in unused COVID-19 relief dollars, $53bn from certain states returning unused federal unemployment benefits, $56bn in economic growth resulting from a 33% increase on investment in long-term infrastructure projects, and $13bn from reinstating superfund taxes on chemicals, among other pay-fors.

The superfund excise tax on chemicals is slated to affect 42 chemicals. The ACC has previously spoken against the reinstatement of the superfund taxes.

“[Superfund taxes] will increase the cost of a variety of consumer goods, including many of the very materials needed for infrastructure development and climate improvement,” Jahn said.

In an emailed response the NACD said that it is “highly concerned” that the legislation would reinstate superfund excise taxes.

The taxes on chemical producers will be set at double rates in place when superfund taxes expired in 1995.

The bill’s text stipulates taxes on these chemicals will take effect on 1 July 2022 and last until 31 December 2031.

Many end products that are made by the chemical sector are used in the construction of infrastructure projects.

Around 4% of the value of non-residential construction spending goes to the chemicals sector including into plastics and rubber products, according to Kevin Swift, chief economist at the American Chemistry Council.

In 2019, 3.51bn lb (1.59m tonnes) of specialty chemicals such as additives, adhesives, sealants were consumed in the US, for a value of a little over $5bn just in those products, said Swift.

In the construction of building and renovating existing water lines and sewage systems, PVC pipe is also a “very competitive” product.

The bipartisan infrastructure bill still needs to be approved in the US House, where progressive members have criticised the package as lacking.

(adds paragraphs 6, 13 NACD comments)