The Constructor

Will Biden’s $2 Trillion American Jobs Plan Rebuild US Infrastructure?

American Jobs Plan construction

American Jobs Plan construction

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President Joe Biden announced the $2 trillion American Jobs Plan on March 31, 2021, with the aim to revamp national infrastructure, create jobs, and fight climate change. This piece analyzes how the bill would impact the US construction industry.

Spanning over a period of eight years, the proposal will begin with enhancing physical infrastructure such as roads and bridges, along with expanding broadband access in rural regions.

This proposal includes:

The plan intends to modernize 20,000 miles of roads, restore the ten most economically viable bridges in need of repair, and fix 10,000 smaller bridges in the worst condition. It will also replace a large number of buses and rail cars, repair stations, upgrade airports, and expand rail and transit into new communities.

Though the states are responsible for transportation infrastructure, the funding is contributed by the federal government, which secures the capital for roads and highways from fuel taxes and puts it in a federal trust. But revenues have stalled for some time now mainly because Congress has not raised the gas tax since 1993 and is bringing cash from other sources to keep the trust operational.

However, a proposal for raising taxes on gas has invited mixed reactions from industries and critics. In addition, the president believes that the plan should not be carried on the backs of American citizens and is therefore looking for other means of paying for it.

In a bid to fight climate change, the plan will inject $174 billion to boost the electric vehicles (EVs) segment. This would require more charging stations, for which the proposal includes funding for 500,000 stations. The numbers are based on a National Renewable Energy Laboratory study which estimates that the country would need approximately 628,000 public chargers to accommodate 15 million EVs by 2030.

Also under the green infrastructure category of the plan is a $100 billion commitment for electric grid infrastructure, which would focus on improving transmission for supporting the buildout of renewables.

The plan will also see an extension and expansion of renewable energy tax credits along with the introduction of a clean electricity standard, which could play a huge role in the development of zero-carbon generation.

The success or failure of the plan could very well depend on the performance of these institutional and procedural innovations. With the overall proposal designed to include large investments in renewable energy and EV technology, it would be interesting to see if it brings in the necessary infrastructure reform in the country.

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