The Vine Street Expressway bisects the Chinatown neighborhood of Philadelphia. The six-lane freeway split the low-income, minority community into two parts and created a decades-long hindrance to development. This story is not uncommon–countless highways were intentionally constructed to segregate communities of color throughout cities in the United States. The Reconnecting Communities Initiative (“Initiative”) commits $1 billion in funding to projects across the country in an effort to repair the damage caused by the infrastructure missteps of the past. The Initiative is just one part of the larger Infrastructure Investment and Jobs Act (“IIJA”), a $1.2 trillion infrastructure package signed into law by President Biden on November 15, 2021.
The IIJA (also known as the Bipartisan Infrastructure Framework) aims to “revitalize American competitiveness” by repairing aging infrastructure with roughly $550 billion in planned spending over the next five years. Topping 2,700 pages, the legislation has a wider breadth than typical infrastructure policy. Not only does it include funding for repairs and construction of traditional infrastructure elements like roads, bridges, and wastewater systems, it also prioritizes policy initiatives like expanding access to broadband and electric vehicle chargers. The Biden Administration sees investment in infrastructure as a way to build up resiliency from extreme weather events caused by climate change and to remedy systemic inequalities caused by legacy missteps. Some of these measures include $15 billion in funds to replace lead water service pipes and $39 billion to expand and modernize public transit systems to address longstanding health and accessibility inequities in underserved communities.
Federal agencies will oversee the distribution of the IIJA’s funds to state offices responsible for executing individual projects. This structure gives state officials a large amount of discretion as to which projects to fund. Critics say this system has often left behind low-income communities of color, but proponents say state discretion means efficient distribution of funds for projects within existing programs (i.e., road renovations undertaken through the Highway Safety Improvement Program). Funding for new initiatives, like expanding access to electric vehicle chargers, is expected to be more complex as most states do not have existing programs in place. In such cases, state officials may need to design new frameworks to manage and distribute project funds. Lastly, the IIJA reserves about $120 billion for grant programs administered directly by federal agencies. It is within this reserve where the Biden Administration will have the most leverage in mobilizing their agenda priorities.
This infusion of capital is expected to create thousands of jobs. While politicians typically choose to flaunt blue-collar union jobs, it will also create opportunities for private contractors capitalizing on the influx of construction projects. Legal professionals are likely to lead the way from ensuring compliance in the proposal process to continued navigation through regulatory regimes related to labor, construction, zoning, and more.
The legislation will be funded by a combination of unused COVID-19 relief funds, newly imposed superfund fees, and changed tax reporting requirements for cryptocurrencies. Tax attorneys will likely play a large role in ensuring investors, broker-dealers, and consumers comply with these new reporting regulations related to cryptocurrencies. An analysis by the Congressional Budget Office (“CBO”) calculated a projected deficit increase of $256 billion over the next ten years, which sparked intense dissent from those concerned with overspending. But the bill’s bipartisan sponsors, Republican Senator Rob Portman and Democratic Senator Kyrsten Sinema, say the CBO analysis fails to account for the savings the bill will generate, which is estimated to be $22 billion over the next ten years.
Despite the magnitude of spending in the IIJA, the measure was not passed as an emergency spending plan or stimulus, so the effects will only be noticeable over time once the projects get underway. It remains to be seen if the federal government can administer funds efficiently, enabling states to get individual projects up and running. To effectively deliver on the bill’s priorities and allocate funds to specific projects, the government will have to expand capacity at every level.
BIO: Therese Gildea (LAW ’23) is a student editor for the Temple 10-Q.