March 11, 2019
Fast Facts
Bringing Business Up to Speed
Federal Issues

Signs point to improving climate for federal infrastructure package

Last week, the U.S. House Ways and Means Committee held its first hearing on measures to fund a federal infrastructure package. Committee Chairman Richard Neal (D-Mass.) said he's had positive interactions with the administration, and said, “I think we have a real opportunity to work together and do something big here.”

Indeed, both congressional Democrats and the White House agree on the need for infrastructure action. In a new policy brief, K&L Gates examines the landscape and the chances for action, sharing this assessment:

The Democratic takeover of the House of Representatives represents the biggest recent change in the landscape, with a new suite of leaders poised to make their mark on infrastructure policy. For the most part, many Democratic lawmakers share the president’s view, also held by many congressional Republicans, that significant investment is urgently needed to maintain and improve the country’s infrastructure.

The White House drove the infrastructure debate during the last Congress, with the administration releasing a comprehensive infrastructure plan in February 2018.

Now, the center of gravity has shifted to the other end of Pennsylvania Avenue – to the House in particular. House Democrats are expected to initiate action on a major infrastructure funding package this year. The Republican-controlled Senate will then be in the driver’s seat to consider the proposal, with input from the White House; Senate Democrats will also have a major role to play given the 60-vote threshold requirement in that chamber.

The House Transportation and Infrastructure Committee held a hearing on Feb. 7 where Chairman Peter DeFazio (D-Ore.) declared, “We are starting off by sounding the alarm bells – investing in America’s infrastructure cannot wait.”

A key challenge for previous infrastructure investment proposals has been the difficulty of moving a significant package when there are so many other “must-pass” pieces of legislation competing for congressional attention, according to K&L Gates.

However, with authorization for surface transportation programs scheduled to expire on Sept. 30, 2020, there is already a “must-pass” infrastructure item on the agenda of the 116th Congress. The surface transportation reauthorization could provide a vehicle for a broader infrastructure package or a fallback option if efforts to advance a separate package fall short.

The central question of the infrastructure debate remains how to pay for a package costing potentially a trillion dollars or more. The gas tax has not been increased since 1993, underscoring the political difficulty of raising new revenue from existing sources. That may lead policymakers to consider other options, such as a carbon or a financial transactions tax.

As with the tax reform effort that concluded in 2017, major action on infrastructure may be a multi-year effort that spans multiple Congresses. However, as with tax reform, engagement in the early stages of the policy process is essential to shaping the final outcome.

“If you haven’t yet considered the potential opportunities of infrastructure – including the opportunities that could be created by congressional Democrats’ broader view of the issue – now is the time,” K&L Gates writes.

Their full policy brief is worth a read.

The National Association of Manufacturers is also shining a spotlight on the need for infrastructure investment. A new report, "Building to Win," highlights the important fact that great nations build and invest in great infrastructure.

"Now in an alarming state of disrepair and in urgent need of new funding, America’s infrastructure can no longer wait. Families, communities and manufacturers need modern transportation, energy, broadband and water infrastructure to meet the demands of today’s economy. The modern manufacturing economy we are building does not have the kind of infrastructure we need to support our vision for an exceptional America," the report says. A new video also highlights the need and opportunities.

For more on federal issues, contact AWB's Amy Anderson. For more on AWB's engagement on infrastructure at the statewide level, contact Mike Ennis.

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