Infrastructure Bill Approved in the Senate; Future Uncertain – Aug 24 2021

After months of negotiations, the Senate finally passed a massive $1.2 Trillion infrastructure proposal containing billions in new spending for “hard infrastructure” projects before leaving for its August Recess.   The 2,700-page measure passed on a bipartisan vote of 69-30, with 19 Republicans joining all 50 Democrats to approve the bill.  Among its provisions are:

  • $110 billion for roads and bridges;
  • $66 billion for railroads;
  • $65 billion for the power grid;
  • $65 billion for internet broadband;
  • $47 billion to protect infrastructure from cyber-attacks and extreme weather;
  • $25 billion for airports;
  • $17 billion for port infrastructure, including funds for the Army Corps of Engineers;
  • $7.5 billion for electric vehicle charging stations;

The Congressional Budget Office (CBO) estimates that the bill is not fully offset, but rather will add $256 billion to the federal deficit over 10 years.  The bill’s authors claimed that new infrastructure spending would increase economic productivity, and thus largely offset the added costs – but CBO rejected that assumption.

Despite approval in the Senate, House Speaker Pelosi said she will not schedule a floor vote on the bill until the Senate also approves the $3.5 Trillion “budget reconciliation” bill containing what is being called the “human” infrastructure provisions, i.e., Democrats’ policy prescriptions for environmental, health and welfare, and other social initiatives.  That package is also expected to include increased corporate and individual taxes.  Given the controversial size and scope of the legislation, a budget reconciliation bill is expected to face difficult odds in both the House and Senate, making final enactment of the “hard infrastructure” bill far from certain, especially since House and Senate leadership are tying the two together.

Budget Resolution Outlines Democrats’, Biden’s “Human Infrastructure” Social Agenda

Paving the way for the massive $3.5 Trillion budget reconciliation bill, the Senate also approved a budget resolution outlining much of President Biden’s so-called “human infrastructure” legislation.  The measure contains top-line spending figures and reconciliation instructions for various Senate committees to craft broad legislation to include Democrats’ policy priorities for climate change, immigration, healthcare, tax policy and social welfare programs.  (A summary can be found here.)  The budget resolution is a necessary procedural step that sets up the reconciliation process, which allows legislation to be approved with only a simple majority of 51 votes.  Most other legislation is subject to a 60-vote threshold in the Senate, so Democrats plan to use reconciliation to pass the legislation, since no Republicans are expected to vote for it.  Still, the fate of the “human infrastructure” reconciliation bill is unclear since moderate Democrats in both the House and Senate have expressed deep concerns with its $3.5 Trillion price tag.  Even though the bill could pass with only Democratic votes, the party holds slim majorities in both chambers, so leadership can afford only 4 defections in the House and none in the evenly split Senate.  (Under the U.S. Constitution, Vice President Harris would break a tie vote in the Senate.)  The House of Representatives has returned from its August recess to vote on the resolution the week of August 23rd.

Appropriations Process Slow, But Legislation Notes Supply Chain Security Issues

While the annual appropriations process in Congress is behind schedule, supply chain security issues have not escaped notice.  In addition to providing direct funding for existing policies and programs run by the government, appropriations bills also contain legislative “report language” that gives direction to agencies and departments about congressional priorities and how funds should be obligated.  Some of the report language pertinent to the supply chain protection community includes:

Commerce-Justice-Science Appropriations bill report (House Report 117-97)

  • “Industrial Technology Services. — The Committee recommends $331,500,000 for Industrial Technology Services, including $275,000,000 for the Manufacturing Extension Partnership (MEP) program and $56,500,000 for Manufacturing USA, which represent increases of $125,000,000 and $40,000,000 above the fiscal year 2021 enacted levels, respectively.”
  • “MEP Supply Chain Database.—The Committee notes that the U.S. supply chain experienced widespread and significant disruptions in 2020 due to the COVID–19 pandemic. These issues exposed the need for manufacturers and suppliers to be able to communicate more effectively so as to rapidly respond when various national emergencies occur. The Committee provides up to $10,000,000 for NIST to create a national supply chain database for MEP Centers that would connect manufacturers and suppliers across the country in order to enhance the Nation’s preparedness for future events that could disrupt supply chains.”

Department of Homeland Security Appropriations bill report (House Report 117-87)

  • “Supply Chain Security.—The Committee is concerned about recent cyber-attacks on critical industries and related infrastructure, which threaten critical U.S. supply chains and directs CISA, through the NRMC, to continue engaging in public-private partnerships and collaborate directly with industry partners on supply chain risk management projects. Such projects should include developing Supply Chain Risk Management templates that enhance vendor and customer entity trust, transparency, and assurance practices, as well as assist in informed decision-making about acceptable risk exposure. CISA should continue investing in capabilities that enable it to assess vital supply chains on a real-time basis for potential bottlenecks and chokepoints that could potentially impede supply delivery. Such activities will help both CISA and industry partners identify and understand systemic vulnerabilities and weaknesses in order to reduce the impact of cyber-attacks. In addition, building on the work that CISA has developed around the National Critical Functions and their corresponding supply chains, the agency can further develop its end-to-end mapping of these functions and the interdependencies that exist between each function, in order to build resilience.”

While the House has passed only 9 of the 12 annual spending bills for Fiscal Year 2022, and the Senate has approved none, appropriations legislation is considered “must pass” since it keeps the government up-and-running each year.  The 2022 Fiscal Year begins October 1st, but few expect all the bills to be enacted by then.  It is all but certain that Congress will approve a “continuing resolution” (CR) this September to provide short-term funding, buying time for Congress and the Biden Administration to negotiate a large-scale “omnibus” spending bill to fully fund the government.   That legislation will likely incorporate much of the language already approved, as well as other spending provisions that have not yet passed.

Key Senate Committee Advances Cybersecurity Legislation

The Senate Committee on Homeland Security and Governmental Affairs approved legislation to shore up cybersecurity in the supply chain during an August 4 meeting, sending the bills to the Senate floor for a vote.  Among the bills approved by the committee were:

  • “The Cybersecurity Opportunity Act” which aims to improve cybersecurity education through the distribution of grants from DHS.  The bill’s sponsor, Senator Jon Ossoff (D-GA), said, “The lack of qualified cybersecurity professionals is a national security vulnerability for this country.
  • The bipartisan “Department of Homeland Security (DHS) Industrial Control Systems Capabilities Enhancement Act” would solidify the Cybersecurity and Infrastructure Security Agency’s (CISA) lead role in protecting critical infrastructure from cyber threats.
  • The “Domains Critical to Homeland Security Act,” introduced by the committee’s top Republican Senator Rob Portman (R-OH) and committee Chairman Gary Peters, (D-MI), requires DHS to research supply chain vulnerabilities that threaten homeland security and strengthen critical supply chains.  According to Senator Peters, the bill is intended to address vulnerabilities in both the public and private sectors.

Given the growing concerns in Congress with ransomware attacks and cyberthreats to critical infrastructure and industries, the legislation has a good chance of enactment.