Movers and SHAKERS
The Far-Reaching Impact of the Signed $1.2 Trillion Infrastructure Law
EV charging stations, electric school buses, dredging to ease shipping, roads, bridges, and water pipes, the just-signed $1 trillion-plus Infrastructure Investment and Jobs Act is now law. While it is much smaller than originally planned, investors can be clear about the content and should familiarize themselves with the overall plan and its expected impact.
The act is the largest federal investment in infrastructure since the financial crisis more than a decade ago and is considered to be one-half of The White House’s “two-pronged” economic agenda. The second prong is the $1.85 trillion social spending and climate change package. The House plans to vote on that this week. It isn’t expected to need any backing beyond the supportive Democrats in Congress to pass.
State transportation departments will likely see the first allowance of highway funds by the beginning of December.
The Acts Goals
“The world has changed, and we have to be ready,” Biden said in remarks at the White House on Monday, he promised listeners, “your life is changing for the better.”
The President said the act will expand high-speed broadband access, replace all of the nation’s lead water pipes and service lines, repair crumbling bridges and dangerous intersections, invest in electric school buses and transit buses, ease supply chain bottlenecks and increase the nation’s resilience against wildfires, superstorms, hurricanes, and other severe weather. The act also will create the first national network of electric vehicle charging stations and encourage the domestic manufacture of solar panels, windmills, and other clean energy technology. Biden said the $1 trillion in infrastructure spending, along with the Build Back Better Act, will make the U.S. more competitive against China without raising taxes on households earning less than $400,000 annually.
Specifically, it includes $550 billion above current planned federal spending on roads, bridges, and expanded broadband access. It plans for financing from several sources of revenue, including taking more than $200 billion in Covid19 relief funds, about $50 billion from delaying a rule on Medicare rebates, and $50 billion from states that had unused unemployment insurance funds.
The President is also signing an executive order that creates a task force to help enact the law and avoid waste. The members will include: Transportation Secretary Pete Buttigieg, Energy Secretary Jennifer Granholm, Interior Secretary Deb Haaland, Environmental Protection Agency Administrator Michael Regan, Labor Secretary Marty Walsh, and Commerce Secretary Gina Raimondo. In a news release, the White House said, “This Task Force will be committed to break down barriers and drive implementation of infrastructure investments across all levels of government to realize the President’s vision of rebuilding our nation’s infrastructure and positioning the U.S. to compete and win in the 21st century.”
The law requires brokers, including cryptocurrency exchanges, to issue a 1099-B. This requirement forces crypto exchanges that may not have otherwise been notifying the IRS of gains to directly inform of cryptocurrency transactions.
The new law will require brokers of crypto to issue a 1099-B and notify the IRS. It should provide a boost for EV manufacturers as it is using infrastructure funds to encourage this technology. At the same time, it does not encourage some directly competing technologies such as hydrogen. The plan is expected to lower the cost of internet service to households if their provider receives federal funds. The law will add $350 billion in new debt during a time when treasury yields are rising. Additional money comes from repurposing pandemic-related funds, and immediately halting a Medicare practice of providing rebates to pharmacies that lessened consumer drug costs. Federal infrastructure contractors are presumed to be the big winners, companies that build roads and bridges, lay power lines, dredge harbors, and enhance rail transportation systems.
Managing Editor, Channelchek.com
Knowing How the Government Buys Infrastructure is Useful to Investors
Is Ethereum More Useful Than Bitcoin?
How Much is a Trillion?
Small Caps Could Benefit from Tax Changes, M&A, and Simple Reversion to Mean in 2022
Stay up to date. Follow us: