Infrastructure Investment the Talk of Capitol Hill, Further COVID-19 Stimulus Expected

Pennsylvania Avenue

COVID-19 has consumed nearly every discussion this quarter in Washington, D.C. As a response to the pandemic, Congress has turned to infrastructure investment to expedite America’s economic recovery. Over the past two months, both the U.S. House and Senate introduced several major infrastructure bills that would allocate billions of dollars to drinking water, wastewater/sewer, broadband, electric, and other utilities, as well as national highway and rail transportation networks.

The Senate Environment and Public Works Committee put forward two major water infrastructure bills – the America’s Water Infrastructure Act (AWIA, S. 3591) and the Drinking Water Infrastructure Act (DWIA, S. 3590) of 2020. Both bills have passed the full committee, and are awaiting a vote by the full Senate. AWIA would re-authorize the EPA’s Clean Water State Revolving Fund (CW SRF) to the tune of $7.5 billion over three years. AWIA would also reauthorize the Water Infrastructure Finance and Innovation Act (WIFIA), which helps fund significant water and wastewater projects, allowing more SRF money to fund a greater number of smaller-sized projects.

These are big bills, but they do not contain sufficient funding provisions to even inch towards closing the funding gap. NUCA sent to the committee in June a Clean Water Council letter, issued a press release, and submitted testimony thanking the Senate for its attention to water/wastewater infrastructure, while noting that the funding levels provided remain inadequate to revitalize this sector of the economy.

The largest infrastructure package presented in Congress as a response to the COVID-19 pandemic is the “Moving America Forward Act” (H.R. 2), put forward by House Democrats in June. This $1.5 trillion dollar bill package merged several Democratic bills focused on investment in water, wastewater/sewer, broadband, the electric grid, and surface transportation. H.R. 2 notably incorporated the Democrats’ proposed $476 billion highway bill, separately titled the “INVEST in America Act.”

H.R. 2 would require federal highway funds to focus on repairing existing highways before constructing new highway capacity; strengthen “Buy America” requirements for highways, mass transit, and rail; implement new safety requirements across all transportation modes; and update the deadline by which the U.S. Dept. of Transportation is required to issue regulations to ensure the coordination of projects within the highway right-of-way with broadband infrastructure deployment projects. Because raising the federal gas tax to pay for infrastructure improvements remains politically unpopular, the bill would also establish a national Vehicle Miles Traveled (VMT) pilot program across all 50 states to develop a sustainable funding mechanism for the Highway Trust Fund. H.R. 2 also delays the implementation of many of its policy changes to Fiscal Year 2022, to allow entities greater flexibility to recover from the pandemic.

Other notable funding levels included in H.R. 2 designate over $80 billion for broadband, $11 billion for the Drinking Water SRF, and $40 billion for the Clean Water SRF – the latter two being major wins for NUCA. While H.R. 2 is not a perfect bill – there are many elements that NUCA opposes – there are several provisions that represent the fulfilment of long-time NUCA priorities.

Perhaps most significant, H.R. 2 would include water and sewage facilities among the types of bonds exempt from a cap on the volume of Private Activity Bonds (PABs) that a state or other jurisdiction can issue in a year – a major NUCA goal that will hopefully provide substantial and much-needed investment. While the full bill is unlikely to reach a vote in the Senate given Republican objections, NUCA issued a letter in support of key provisions of H.R. 2 that we want to see in a future compromise bill (the letter can be found at www.NUCA.com/letters).

Pressure is on for this fall – a deal must be reached before surface transportation funding expires on September 30. The Senate still intends to advance its own bill, the “America’s Transportation Infrastructure Act of 2019” (S. 2302), which was approved 21-0 by the Senate Environment and Public Works Committee last July. S. 2302 would authorize $287 billion from FY 2021 through FY 2025 (an increase of 27% over the current authorization).

NUCA fully supports the Senate’s S. 2302 and urges its passage as quickly as possible in the full chamber. But both chambers of Congress need to pass an infrastructure bill that can be supported by a majority of lawmakers and contain H.R. 2’s bold levels of funding. Moreover, they must pass it quickly to help address our nation’s unemployment and infrastructure demands. It is likely that surface transportation funding will remain a major focus for NUCA membership during the fall Washington Summit.

The House’s annual appropriations process continues to show that investment in America’s water infrastructure is becoming a major priority. On July 7, the Interior-Environment subcommittee of the House Appropriations committee passed a spending proposal that would reauthorize $10.2 billion to the Clean Water and Drinking Water SRFs. This investment, designed to complement the funding allocated in H.R. 2, would be aimed at “shovel-ready” projects. Ultimately, these bills demonstrate that Congress is beginning to recognize the importance of prioritizing investment in our nation’s aging utility infrastructure, and particularly in water. NUCA will continue to advocate for responsible infrastructure investment in both COVID-19 stimulus legislation and in long-term measures.

Separate COVID-19 related measures continue to dominate Capitol Hill, most recently the Paycheck Protection Program (PPP). After briefly expiring on June 30 with over $100 billion in funding remaining, legislation was passed to extend the PPP until August 8. NUCA strongly supported the PPP reforms made in June, which included adjusting the required percentages of PPP loans required to be applied towards payroll from 75% to 60% and extending the timeframes for loan forgiveness and payback deadlines.

Senate Republican leadership has been more cautious on additional COVID-19 relief legislation, with Majority Leader Mitch McConnell (R-Ky.) previously calling for a “pause” until the effects of the most recent legislation become fully apparent. Republican priorities for a potential future relief bill include measures such as liability protections for businesses that reopen amid the pandemic as well as a payroll tax cut.

Many Republican Members of Congress are also pushing for reforms to the recent unemployment provisions, which critics claim are reducing incentives to rejoin the labor force. Expanded unemployment benefits are currently scheduled to expire at the end of July, but Democrats are pushing forcefully to extend the provision. Congressional Democrats, in addition to pushing infrastructure as stimulus, are discussing another round of direct payments to Americans, as well as aid to state and local governments, and other relief measures.

Congress is expected to begin negotiations on another relief package in mid-July in the hopes of passing a final bill before the end of the month. NUCA will remain at the forefront of advocacy as our nation attempts to navigate our way out of the COVID-19 crisis and towards economic recovery.

Eben Wyman is the principal of Wyman Associates, which represents NUCA governmental affairs.

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