As Congress returns from a 2 week July 4th recess, it’s make or break time for infrastructure legislation in 2021. With only 8 legislative days left before the month-long August recess, this week should prove crucial in determining the next steps, including key muni bond provisions. The BDA and MBFA continue to press for the inclusion of all muni priorities in the bipartisan infrastructure agreement, but this fall will potentially provide multiple opportunities for passage.
Congressional Leadership alongside the Biden Administration are working to secure support for the recently produced 1 trillion dollars bipartisan infrastructure outline as the legislative text continues to be drafted, but at this time not all Leaders support the plan. House and Senate Democrats continue to demand promises of additional infrastructure spending via budget reconciliation later this year, further complicating the bipartisan effort.
Senate Leadership is likely to attempt the near impossible-passing both the bipartisan package alongside budget reconciliation instructions, paving the way for a September vote on the potential 3+ trillion dollars Democratic only infrastructure budget reconciliation package. At this time, it is unclear if the House or Senate has the votes needed to pass the bipartisan framework and how the potential simultaneous vote on a partisan package may influence that vote.
Muni Provisions in Infrastructure
The bipartisan framework includes nearly $600 billion in new spending and relies heavily on muni provisions such as the expansion of Private Activity Bonds and creates a new direct pay bond, the American Infrastructure Bond. Other key provisions such as the reinstatement of tax-exempt advance refundings and the raising of the bank-qualified debt were not included in the original outline. However, we continue to work with our partners on the Hill pushing for the inclusion of all BDA and MBFA priorities in the bipartisan package which text is expected later this week.
The BDA and MBFA have concerns about the potential bipartisan agreement as a viable path forward seem narrow. We still believe the chances of a broader infrastructure spending package will pass this year remain high by the budget reconciliation process, and the smaller surface transportation reauthorization, the INVEST in America Act, will be touted as a “bipartisan infrastructure success.”
As the situation continues to develop, we will provide updates on the progress of these efforts.