Dissecting Congress' $1.2T Infrastructure Plan, What's In It For Agriculture?
November 8, 2021
After months of infrastructure debate and setbacks, compromise spurred the House of Representatives to pass the Senate’s infrastructure bill. With a key vote of 228-206, the “Infrastructure, Investment and Jobs Act" heads to President Biden’s desk for his signature.
The bill was passed by the Senate nearly three months prior, with the Senate cast a 69-30 vote on August 10, 2021.
According to Pro Farmer Washington Correspondent Jim Wiesemeyer, the bill contains $550 billion in new spending that will take place over the next five years. Part of that funding will be dedicated to roads, bridges and rail, as well as expanding electric vehicle charging stations. Another big piece of the legislation that could impact rural America is the broadband piece of the package.
Solving Supply Chain Challenges?
But for one transportation guru within agriculture, this could also help ease some of the supply chain constraints crippling agriculture.
“The supply chain challenges over the past year have highlighted the reality that we can get supply right, and we can get demand right, but if we do not get infrastructure right, we, as an industry and as a broader economy, will not flourish,” says Mike Steenhoek, Executive Director of the Soy Transportation Coalition (STC). “In addition to the overall stress confronting our global supply chain, a number of specific disruptions – Hurricane Ida, the Suez Canal, the I-40 bridge near Memphis, the Colonial Pipeline, etc. – have provided a vivid reminder that if one of our critical junctures goes awry for any number of reasons, the consequences to the broader economy can be profound."
According to the American Soybean Association (ASA), the legislation includes provisions to address truck driver shortages, including hours-of-service changes.
While the topline items in the bill sound packed with funds to help the United States’ infrastructure, what’s in it for agriculture?
Steenhoek says the biggest piece will be mending a problem that was apparent even before the supply chain challenges. He says crumbling infrastructure within agriculture, including dated locks and dams, could become an even bigger issue for getting exports loaded and shipped.
“A number of the key provisions of the bill – specifically the $110 billion in funding for roads and bridges and the $17 billion for ports and waterways – will clearly enhance the competitiveness of U.S. agriculture,” adds Steenhoek.
According to the Soy Transportation Coalition, the $548 in additional spending will be combined with existing baseline and will amount to $944 billion over five years. But when you extend that over eight years, he says the tally becomes $1.2 trillion.
STC broke down the funding that will impact agriculture as:
Transportation Categories ($284 billion; 52% of new spending):
Roads, bridges, and major projects: $110 billion
Includes $40 billion for bridge repair, replacement, and rehabilitation
Passenger & freight rail: $66 billion
Public transit: $39 billion
Airports: $25 billion
Ports and waterways: $17 billion
Safety: $11 billion
Electric vehicle infrastructure: $7.5 billion
Electric/zero emission buses: $5 billion
Electric/zero emission ferries: $2.5 billion
Reconnecting communities: $1 billion
Other Categories ($256 billion; 48% of new spending)
Electric and power infrastructure: $65 billion
High-speed internet: $65 billion
Clean drinking water: $55 billion
Resilience and western water infrastructure: $50 billion
Environmental remediation: $21 billion
Additionally, Steenhoek says there’s a pilot program introduced by Sen. Mike Rounds (R-SD) that could help fuel the use of soybeans in construction and other projects.
Another element Washington watchers are bringing to light–a foreign freight car ban.
Wiesemeyer reported on Monday that buried in the plan is a foreign freight car ban that will likely catch China’s attention.
“The ban would effectively apply to freight cars manufactured by China,” reported Wiesemeyer. “Freight cars couldn’t have more than 20% of such content one year after the department issues the new regulations. The maximum would drop to 15% three years after regulations are issued.”
Wiesemeyer says manufacturers could be fined between $100,000 to $250,000 for each freight car that’s in violation. The Transportation Department could prohibit repeat violators from providing additional freight cars for operation on the U.S. freight railroad system. Manufacturers would also have to certify that they meet the requirements annually.
How will the federal government pay for the new plan?
Wiesemeyer says it will come from several different areas.
“The five-year spending package will be paid for by tapping $210 billion in unspent Covid-19 relief and $53 billion in unemployment insurance aid, which some states have halted, along with an array of smaller pots of money, like petroleum reserve sales and spectrum auctions for 5G services,” reports Wiesemeyer. “However, it will add $256 billion in projected deficits over 10 years, according to the Congressional Budget Office.”
While the House Democrats scored a victory with the passage of the long-awaited infrastructure plan, there are still some major ticket that remain as unfinished business for the administration. The largest may be the highly debated Build Back Better (BBB) plan.
Just last week, the Biden administration unveiled a scaled down version of the original plan. The BBB now has a price tag of $1.75 trillion. And with a key procedural vote early Saturday, the House of Representatives moved the plan another step closer.
Wiesemeyer reports House Majority Leader Steny Hoyer (D-Md.) said the legislation would be passed before the Nov. 25 Thanksgiving holiday. In their statement, moderates said they would allow for a vote no later than the week of Nov. 15. But that could delay final action into December, when Congress must grapple with a Dec. 3 gov’t funding deadline and raising the debt ceiling, both of which will spark conflict with Republicans.
While many agricultural groups came out in support of infrastructure, the BBB plan isn't striking the same chord of support. Agricultural Retailers Association ARA sent a statement following the infrastructure vote, applauding what the group called a "critical piece of legislation," however, the group had the opposite direction of BBB moving another step closer to passage yet this year.
"ARA is strongly opposed to the House's Build Back Better bill. The tax increases included in this plan would not only counteract any economic recovery but also result in steep cost increases for consumers," said ARA.