Legislative Update: Infrastructure

Infrastructure

President Joe Biden ended negotiations with Senator Shelley Moore Capito (R-WV) and other Republicans on June 8, after failing to come to a deal on an infrastructure plan that both sides could accept. In a major setback on one of his top agenda priorities, the President said that the divide was too expansive, and Republicans would not offer new spending that would “meet the essential needs of our country to restore our roads and bridges, prepare us for our clean energy future, and create jobs,” according to a White House press statement.  Sen. Capito, in her own statement, shared her disappointment that President Biden chose not “to accept the very robust and targeted infrastructure package, and instead, end our discussions.”

In the end, Republicans offered to increase spending by another $50 billion for a total of $330 billion in new spending as part of a $928 billion package. President Biden scaled back his $2.3 trillion, coming down to $1 trillion with all of it in new infrastructure spending. Republican negotiators said that initially, Biden proposed that the $1 trillion would include the “baseline” spending also, but then his staff later walked back that proposal. A frustrated Senator Capito claimed the “White House kept moving the goalposts.”

The White House has not given up all hope of a bipartisan measure. Administration officials will begin working this week with another bipartisan group of 20 moderate Senators and have also reached out to the House Problems Solvers Caucus.  Members of this Senate bipartisan group, which include Sen. Bill Cassidy (R-LA), Sen. Lisa Murkowski (R-AK), Rob Portman (R-OH), Susan Collins (R-ME), Mitt Romney (R-UT), Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ), have been working for weeks on their own infrastructure framework. Sen. Romney says that topline numbers and how they will fund the proposal have been determined, but details of the plan remain unknown. The group doesn’t necessarily have the influence on Republican colleagues and leadership that Capito has, drawing the question of whether they will be able to garner the Republican support they needed for 60 votes.

The bipartisan Problem Solver Caucus introduced a package that includes $762 billion in new spending over eight years but doesn’t specify its pay-fors. The bill also reduces drinking water and wastewater funding from $72 billion in Sen. Capito’s offer to $60 billion.

Meanwhile, Democrats have started working on a reconciliation package and a surface transportation bill which will likely be the vehicle that would incorporate any negotiated deal or the President’s American Jobs Plan. On June 9, the House Transportation and Infrastructure Committee advanced Chairman Peter DeFazio’s (D-OR) five-year $547 billion surface transportation bill. The “Investing in a New Vision for the Environment and Surface Transportation in America (INVEST in America) Act” is $53 billion higher than last year’s $494 billion House highway bill, which never passed.

The committee also approved a proposal (H.R. 1915) authorizing $50 billion for wastewater programs, including $40 billion for the Clean Water State Revolving Fund (CWSRF). House Speaker Nancy Pelosi (D-CA) is still pushing for the infrastructure bill to be passed by the July 4th recess. The proposal invests in repairing existing roads and bridges, electric vehicle charging infrastructure, reduces carbon emissions, increases transit routes, increases funding toward passenger and freight rail, and scales up zero-emission vehicles.

FY22 EPA Budget

On June 4, President Biden introduced his $6 trillion FY22 budget that would begin on Oct. 1. Biden’s budget would increase spending to $8.2 trillion by 2031 while running deficits above $1.3 trillion through the next decade. The budget includes the first year of spending for his American Jobs Plan.  As part of its budget, the Biden administration prioritizes the Environmental Protection Agency (EPA) by increasing the agency’s budget to $11.2 billion. The budget includes $10 million in funding for a new Solid Waste Infrastructure for Recycling (SWIFR) pilot grant program as a result of the Save Our Seas 2.0 Act enacted in Dec. 2020. The agency says SWIFR will “build innovation in the recycling industry” and help reduce waste while reducing greenhouse emissions and creating jobs.

The President’s budget also includes $1.22 million in additional funding for the Resource Conservation and Recovery Act (RCRA) Waste Minimization and Recycling Program and funding to finalize the National Recycling Strategy that Congress mandated in 2020.  The EPA also established a National Recycling Goal to increase the recycling rate from 32.1% in 2018 to 50% by 2030.

Water Protection Rule

As anticipated, EPA and the Department of the Army announced on June 9 that they would repeal the 2020 Navigable Waters Protection Rule and intend to revise the definition of “waters of the United States (WOTUS).  The Trump-era rule removed overly restrictive and broadly defined federal pollution oversight by former President Barack Obama. The Obama-era regulations were opposed by farmers, ranchers, and several industries, including oil and gas companies.  “After reviewing the Navigable Waters Protection Rule as directed by President Biden, the EPA and Department of the Army have determined that this rule is leading to significant environmental degradation,” Administrator Michael Regan said in a statement.  Which streams and wetlands protected by federal regulation has been a subject of debate taken all the way to the Supreme Court since the passage of the Clean Water Act. Regan said that the agency will craft a new and more “durable definition” (i.e. one that can get 5 votes on the Supreme Court) and will seek public input this fall.  Until then, the rules prior to the 2015 WOTUS implementation will be in place. It is unclear how the administration will handle the more than thousands of jurisdictional determinations made under the narrower rule during the Trump administration.