US House approves $1 trillion infrastructure bill

President Joe Biden has secured the final passage of a bipartisan $1 trillion bill that will boost funding for highways and other traditional infrastructure while directing tens of billions of dollars to climate-related programs such as electric vehicle charging and carbon capture.

The US House of Representatives voted 228-206 tonight in favor of the infrastructure package, with 13 Republicans joining Democrats to support the bill. The Senate easily approved the measure back in August.

The bill’s passage after months of Democratic squabbling gives Biden and his party a major legislative win just three days after a bruising, off-year election in which Democrats lost the governorship in Virginia and Republicans turned out in force in races across the country.

Biden’s popularity has slipped significantly in recent months, amid supply shortages and rising consumer prices. Those economic troubles, coupled with the US’ messy withdrawal from Afghanistan, have largely overshadowed the boost Biden had received earlier in the year from the passage of a major stimulus bill and from the rapid distribution of Covid-19 vaccines.

The vote followed some positive economic news earlier in the day when the Labor Department reported the US added 531,000 jobs in October, up from 312,000 in September and the most in three months.

The infrastructure bill, which drew the support of major business and oil industry groups, will increase baseline funding on infrastructure by $550bn over the next five years and reauthorize surface transportation programs until the end of the fiscal year 2026. The package includes $110bn in new funds for roads and bridges, $66bn for freight and passenger rail, $25bn for airports, and $17bn for ports and waterways.

The bill will fund this spending, in part, by reinstating or extending cleanup fees for chemical and mining companies, and by selling 87.6mn bl of crude from the US Strategic Petroleum Reserve in fiscal years 2028-2031.

Congress opted not to raise the federal 18.4¢/USG excise tax on gasoline and the 24.4¢/USG tax on diesel fuel to help pay for the infrastructure package. Biden said raising those taxes would have violated his pledge not to increase the tax burden on most families. Those taxes have not been increased since 1993.

The White House and Democratic lawmakers have cited other parts of the bill as a down payment on the investments the US will need to scale up clean energy use and reach Biden’s ambitious climate goals. Those investments include $65bn to modernize the electric grid, $14.6bn for carbon capture, $7.5bn for electric vehicle charging, $6bn in nuclear power support, $5bn for clean buses, and $4.7bn to plug orphaned oil and gas wells.

House Democrats are hoping to hold a vote as early as the week of 15 November on a separate, $1.85 trillion budget bill known as the Build Back Better Act. That measure would include billions of dollars in tax credits for renewables, biofuels, carbon capture, and sustainable aviation fuel, along with higher royalties on federal oil and gas leasing and a “fee” on methane emissions.

The timing of that vote could depend on how quickly the Congressional Budget Office can analyze the Build Back Better Act’s effects on government revenues and spending.

“If your number one issue is the cost of living, the number one priority should be seeing Congress pass these bills,” Biden said.

If the House passes the Build Back Better Act, Democrats in the evenly-divided Senate will have to show uncharacteristic unity on companion bill if they hope to avoid a Republican filibuster.

The months of Democratic infighting over the two bills reflect the conflicting currents within their caucus.

Negotiations over the infrastructure package bogged down earlier this year as Biden sought Republican support in the Senate. That led Democrats to shift most of their climate policies into a separate budget bill initially pegged at $3.5 trillion. House progressives wanted to see progress on the Build Back Better Act as a condition for their votes for the infrastructure package.

But opposition from two Democratic senators Joe Manchin (West Virginia) and Kyrsten Sinema (Arizona) forced the White House and Democratic congressional leaders to trim their ambitions. They scaled their plan back to a $1.85 trillion budget framework that includes the $550bn for clean energy and climate funds. Manchin remains noncommittal on his vote.

Biden hopes the final budget agreement will resolve Manchin’s concerns about inflation and increasing debt levels. In a nod to moderate Democrats concerned about the high cost of such major social and climate programs in the budget bill, the Treasury Department released a projection that contends that the tax measures in the bill would offset more than $2 trillion in spending and reduce the budget deficit in the long term.

House Democrats so far have sought to keep in the budget bill a “fee” on oil and gas methane emissions that would hit $1,500/metric ton, along with higher royalties on federal oil and gas leases, but it remains unclear whether that provision will survive in upcoming negotiations.

By Haik Gugarats and Chris Knight

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