Daily Journal: Infrastructure: Where we’re going and how we plan to get there

May 6, 2021

O’Melveny partners Liz Dubeck, Denise Raytis, and Eric Richards examine the Biden administration’s US$2 trillion American Jobs Plan, a bill designed to address America’s infrastructure woes, and highlight arguments for and against the current draft from both sides of the political aisle in this bylined article for Daily Journal

In its simplest form, the debate over infrastructure grapples with how it is defined. Some take a narrow view, considering only transportation projects within the remit of the American Jobs Plan. Others, like the Biden administration, widen the aperture to include much more, which the authors note includes digital infrastructure, drinking water infrastructure, climate and clean infrastructure, caregiving infrastructure, and power infrastructure, as well as child care, education and housing. “The plan uses the term, in essence, to describe any essential facilities or services that are viewed by the Biden administration as critical to national productivity,” they write.

Moving beyond the definition, issues of payment and cooperation between federal and state authorities are significant obstacles to the plan’s passage and future implementation. “At root, there are only two possible sources of funds for large-scale infrastructure spending: (1) user fees and (2) tax revenues,” the authors observe. Citing the federal gas tax as an example of user fees failing to generate enough revenues to cover expenses, they note that “assuming infrastructure investment of any material scope can be agreed upon, there will almost certainly need to be new or increased taxes to pay for it.”

Read the full article here.