The country currently has an investment gap of more than $2.5 trillion in infrastructure. If the government doesn’t invest this money, the country could lose more than 3 million jobs in 2039.
The current administration has passed an infrastructure and jobs act that can overcome many of America’s infrastructure problems. But there is a lot to the bill in 2022 that you need to understand.
What exactly is the infrastructure bill? How much money is going into the transportation industry? Who is in charge of the money? Here are six things you should know.
- The Infrastructure Bill Is Not the Build Back Better Act
Many people confuse the 2022 infrastructure bill with other parts of Build Back Better. Build Back Better will provide monthly payments to the parents of nearly 90 percent of American children for 2022 – $300 per month per child under six and $250 per month per child ages 6 to 17.
The package includes three main bills. The American Rescue Plan was a COVID-19 relief package that Congress passed in 2021.
The American Jobs Plan (AJP) and the American Families Plan (AFP) were also proposed. AJP was an infrastructure and environmental bill while AFP was a bill for expanding welfare programs and social services.
However, both bills ran into opposition from Democratic and Republican lawmakers. The infrastructure part of the AJP was opted to be pulled out and passed as a separate piece of legislation. The Infrastructure Investment and Jobs Act (IIJA) was passed into law on November 15.
The remaining components of the AJP were combined with the AFP to create the Build Back Better Act.The Build Back Better Act is currently under negotiations in the Senate.
The infrastructure bill does not have a child tax credit or healthcare benefits. Those policies are in the Build Back Better Act.
- The Bill Covers a Lot of Areas
The IIJA contains $1.2 trillion of funding. Most of the funding goes toward pre-existing projects, but it offers $550 billion in new spending. The bill spreads the money out across several industries instead of concentrating the funds in a few areas.
$65 billion of new spending will go toward for expanding broadband access, particularly in rural areas. Another $65 billion helps with the power grid, funding updates to broken power lines.
Billions of dollars go toward environmental projects. $21 billion will be used to clean up abandoned mines, old oil wells, and Superfund sites. The government will use $7.5 billion to build electric charging stations and another $7.5 billion to buy electric school buses.
- The Transportation Industry Gets the Most Money
Of the $550 billion in new spending, $283.8 billion goes toward the transportation sector. $110 billion helps with roads and bridges throughout the United States. Workers will build new bridges and repair old ones, including in American territories like Puerto Rico.
$66 billion helps with railroads. The passenger rail system will receive upgrades and maintenance, namely in cities. However, there is no new money for high-speed rail.
The bill delegates $25 billion for upgrades and expansions at airports. The focus wants to be emphasized on air traffic control towers and radar systems. $5 billion is specifically for towers and systems.
$17 billion helps with ports. The Army Corps of Engineers receives half of this funding, which the Corps can use as it pleases. The Coast Guard also receives some money, which they can use to renovate shipping ports and ferry terminals.
- Most of the Bill Pays for Itself
The bill has several ways to pay for the new spending. The United States Treasury will transfer $118 billion from its funds into the Highway Trust Fund. State governments can tap into the trust fund to pay for highway renovations and road projects.
The bill repurposes $3 billion in COVID-19 relief funds to pay for airport renovations. States can also tap into their relief funds to cover the expenses of different projects.
The overall impact of the bill may be significant. The bill can create more than 800,000 jobs by 2030, though it will add more than $250 billion to the deficit.
- Local Governments Have a Lot of Spending Power
State, county, and local governments are in charge of much of the new funding. Cities can send reports to their states indicating projects they need to be fixed. State governments can then determine if their money should go toward the projects.
The federal government can provide oversight. But it is up to local officials to decide who to hire for construction projects and which projects deserve attention. Local governments may also need to provide some of their own money to cover expenses.
- It Will Take Time for the Bill to Play Out
The country has been notified that it will take years for Americans to experience the effects of the bill.
State governments have to spend time processing reports and grant applications from cities. Once cities get approval, they have to interview contractors, who then have to hire employees. The full effects of the bill may not be known until 2030 or later.
Get the Facts About the Infrastructure Bill in 2022
There’s a lot you need to know about the infrastructure bill in 2022. It delegates billions of dollars in new spending to many different sectors.
The transportation sector stands to benefit the most. Roads, ports, and airports will be renovated and updated.
But state and local governments control the funds. It can take years for the bill’s benefits to become apparent, though thousands of jobs may be created.
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