Page 7 - ISQ July 2021

JULY 2021

The Road Ahead for Biden’s Infrastructure Agenda:

Impact on Spending, Deficits, and Taxes

Ed Mills, Managing Director, Washington Policy Analyst, Equity Research

After more than a year of pandemic-related market
uncertainty, attention is turning to the recovery stage of
While negotiations are highly in flux and divergent
U.S. policymaking and the more than $4 trillion in outcomes cannot be fully ruled out, current indications are
infrastructure and social program spending outlined by that an infrastructure package in the $2 trillion to $3 trillion
range, with about $1 trillion in deficit spending, is likely by
the Biden administration earlier this year. While
the end of this year or early next year.
negotiations are highly in flux and divergent outcomes
cannot be fully ruled out, current indications are that an
infrastructure package in the $2 trillion to $3 trillion range, The question remains, where do we go from here? The path
forward will be guided by political decisions, particularly on the
with about $1 trillion in deficit spending, is likely by the
size of the package (large, single bill, or separate attempts) and
end of this year or early next year. whether it advances with bipartisan support or by a Democratic-
only reconciliation push requiring only a simple majority in the
Broadly, we expect a final package to cover three main pillars: Senate. These factors will influence the final provisions of the
traditional infrastructure (such as roads, bridges, and highways); infrastructure package, and should be monitored as legislation is
investment in U.S. domestic manufacturing through clean energy crafted into the fall.
and next-generation technology supply chains; and investment
into social infrastructure via an extension of the recently-enacted
Child Tax Credit expansion and increased funding for education. WHAT’S PROPOSED VS. WHAT’S POSSIBLE
Along these lines, we expect Congress to take select portions of From a high level perspective, Biden’s American Jobs Plan (AJP)
the American Jobs Plan (AJP) and American Families Plan (AFP) proposes around $2.3 trillion over ten years, with the core of the
and pair them with associated tax adjustments to raise revenue, package targeting traditional transportation infrastructure and
tilted more toward corporate tax changes. domestic manufacturing capability. The plan also envisions around

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