With President Joe Biden and both parties in Congress making infrastructure a major priority, intense attention is focused on whether and how to substantially increase federal investment. In a recent webinar, Venable's multidisciplinary infrastructure team explored what lies ahead for federal transit, highway, and other infrastructure programs in 2021 and beyond. With Kathryn Floyd as moderator, the panelists, Jim Reilly, Yardly Pollas-Kimble, Fred Wagner, and Jim Burnley, also addressed audience questions.
Q: Looking at the political landscape ahead of us, is it too early, too late, or just the right time to engage now with Congress and the Biden administration on provisions related to infrastructure overhaul?
A: The fact that the president in his proposal pointed to several provisions that are already happening in Congress, previous versions of infrastructure bills, and so on, is a signal to people that the congressional process that has been effective in the past is in play here again. So, it is certainly not too late. In fact, I think now is the right time to be reaching out with a compelling factual argument as to why a certain provision might be important. The way to do that is to compile data about job creation and other impacts of certain infrastructure developments and to share those with your local member of Congress or through a trade association. Venable has years of experience working on such submissions, and we can certainly help deliver that message for clients.
Q: Going back to the fundamentals, is the infrastructure legislation likely to be presented as a comprehensive package, or will it be done in smaller segments? And what might they look like?
A: I think that in terms of what I'd call physically intensive capital projects, there will be one large piece of legislation. But some of the other provisions dealing with social infrastructure projects are likely to be addressed in smaller bills in other packages, such as healthcare overhaul.
Q: Aside from new legislation, what existing legal authority does the administration already have to advance its policy initiatives?
A: In the Obama/Biden administration, it became pretty apparent early on that there wasn't going to be a lot of cooperation and collaboration from Congress, so the mantra was "what can we do without Congress?" I think what we're seeing now in the Biden/Harris administration is that they hope to at least explore the possibility of some collaboration before going down that route. That said, the administration is almost certain to change some regulations using their existing authority.
For example, the Council on Environmental Quality's (CEQ) NEPA regulations finalized last September during the Trump administration are likely to be rescinded by this administration.
There's going to be new notice and proposals under NEPA regulations about assessing the greenhouse gas and other impacts of specific projects. They can do all these things as a matter of policy through instructions from the CEQ to all the federal agencies that are involved in any associated infrastructure projects. Similarly, the existing executive order on environmental justice that dates to the Clinton administration is likely to be invoked to instruct federal agencies on what equity concerns they need to consider. We're also likely to see the Department of Justice and the Civil Rights Division using their authority to address environmental pollution issues. So, there is a lot that this administration can do right now just working within the existing legal rubric.
Q: We're hearing about a lot of money being tossed around if the Biden administration proposals go forward. Are they likely to require non-federal contributions by project sponsors?
A: Most of the programs on the books today (highway transit programs, for example) require a local and/or state match, sometimes up to 50%. But in what the administration has made public so far, there is no signal as to whether any local match will be required. It's possible that a match may be required for some programs but not others. Traditionally, for programs administered by the Department of Transportation, requiring a local match has helped sort through project applications. In other words, project sponsors tend to be a little more careful about making applications for federal claims if they are spending their own money. When you have hybrid programs that do not have a significant (or any) local or state match requirement, that puts a much greater burden on the federal Department of Transportation to set project criteria, and to apply those criteria to sort out which projects are ultimately worth funding. So, it will be interesting to see as this plays out whether the administration will propose any local or state match requirement. But at this point, we simply don't know.
Q: Given the impending extensive infrastructure projects, any thoughts on whether the government will rethink its rule on awarding projects to local small businesses? Also, will we see an increased expectation that manufactured components are made in the U.S.?
A: Buy America policy will be huge; we could do a whole separate webinar on that topic. There will be direct conflicts between policies on American products and advancing electric vehicles (EVs) and EV charging infrastructure, for example, because so many of those products are foreign sourced. There are other examples as well.
Q: Is there specific funding for public broadband to reduce the digital divide?
A: Most definitely. $100 billion was the figure used by the White House, with a special focus on helping rural and other underserved communities without current access to high-speed broadband. The proposal addresses availability and affordability by treating broadband as an essential service, like electricity. It also ensures 100 percent coverage at minimally accepted speeds, which it does by promoting multiple service providers in a given area (these include municipal and local governments, nonprofits, cooperatives, and community broadband providers).