Understanding Infrastructure Legislation

"Generations from now, people will look back and know this is when America won the economic competition for the 21st century," said President Joe Biden in a statement released late Friday, November 6, 2021, shortly after the House of Representatives passed the $1.2 trillion bipartisan Infrastructure Investment and Jobs Act by a 228-to-206 vote. Thirteen Republicans and all but six of the House Democrats voted for the bill and sent it to the president's desk to be signed into law. The president signed it on November 15.

Progressives had threatened to vote against the measure but, at the last minute, agreed to support it after moderates promised they would back the companion social safety net and climate bill, officially known as the Build Back Better Act (BBBA)—provided an upcoming cost score by the Congressional Budget Office (CBO) showed that the plan would not add to the budget deficit.

Key Takeaways

  • Infrastructure—originally used to designate building and repairing roads, bridges, railroads, and ports—has been expanded under President Biden to include human or social infrastructure.
  • This resulted in two proposed infrastructure bills. The first of which was the Infrastructure Investment and Jobs Act, agreed to on a bipartisan basis, which deals with traditional infrastructure.
  • A second bill, called the Build Back Better Act, deals with social infrastructure.
  • The $1.2 trillion bipartisan bill was initially held up—first by Democratic progressives who insisted that the $3.5 trillion Build Back Better agenda bill pass first, then by Democratic moderates who demanded additional Congressional Budget Office costing of that bill.
  • Ultimately, the Infrastructure Reduction Act replaced the Build Back Better Bill and was signed into law.

The Cost of the Infrastructure Plan

The CBO score on the $2.3 trillion Build Back Better Act was released Thursday, Nov. 18, 2021, and the House of Representatives passed and sent that bill to the Senate on Friday, November 19. The CBO estimate indicated that the legislation would increase the deficit by $360 billion over 10 years. This figure, the CBO noted, did not include any additional revenue generated from enhanced enforcement of tax collections. It did include the $275 billion in additional funding for that enhancement.

The Treasury Department estimates that additional revenue will amount to $200 billion. By subtracting the $200 billion in additional revenue from the $360 billion projected deficit, the deficit is reduced to $160 billion or $16 billion per year.

In a statement following House passage of the Build Back Better Act, President Biden said, "For the second time in just two weeks, the House of Representatives has moved on critical and consequential pieces of my legislative agenda. Now, the Build Back Better Act goes to the United States Senate, where I look forward to it passing as soon as possible so I can sign it into law.

Build Back Better remains contentious in the Senate, where discussion centers around gaining support from two moderate Democratic Senators Kyrsten Sinema (D-AZ) and Joe Manchin (D-WV), both of whom have refused to support the legislation in its present state.

At the same time, according to reporting by The Washington Post, Senate Majority Leader Chuck Schumer (D-NY) reportedly told Senate Democrats in a virtual caucus meeting in December that he would push to vote on the bill by the end of January. As Build Back Better struggles, the Infrastructure Investment and Jobs Act has been moving full steam ahead with more than a dozen spending packages announced since Nov. 16, 2021.

Infrastructure Voting Finally Arrived In Part

"Finally, infrastructure week," remarked Biden Saturday morning, Nov. 6, 2021, at a press briefing to discuss the just-passed bipartisan Infrastructure and Jobs Act and the hoped-for passage of the BBBA the week of November 15.

While passage of the bipartisan Infrastructure Investment and Jobs Act creates a path to invest billions of dollars in roads, bridges, water systems, transit, and broadband, the passage of the BBBA and the massive investment in human infrastructure it represents is not ensured. That all depends on whether the CBO estimate finds the legislation does not add to the deficit and whether Congress settles the current stalemate regarding the omnibus budget bill and the debt ceiling.

$3.5 Trillion in Spending to Support the Biden Agenda

The $1.2 trillion bipartisan Infrastructure Investment and Jobs Act and the $2.3 trillion Build Back Better Act would result in spending of $3.5 trillion in support of the Biden agenda.

As outlined by the CBO, the Build Back Better framework includes roughly $2.2 trillion of social infrastructure funding, plus an additional $110 billion in immigration spending, contingent upon an affirmative ruling by the Senate parliamentarian. This would bring the total to $2.3 trillion.

Here is what is in the bill that just passed, what's in the revised Build Back Better agenda, and what the original Build Back Better bill included.

What Was in the $1.2 Trillion Bipartisan Package

The 2,702-page Infrastructure Investment and Jobs Act contains $550 billion in new spending. The $1.2 trillion figure comes from including additional funding normally allocated each year for highways and other infrastructure projects. The new spending includes:

  • $110 billion for roads and bridges. In addition to construction and repair, the funding also helps pay for transportation research at universities, funding for Puerto Rico’s highways, and “congestion relief” in American cities.
  • $66 billion for railroads. Funding includes upgrades and maintenance of America’s passenger rail system and freight rail safety, but there's nothing for high-speed rail.
  • $65 billion for the power grid. The bill would fund updates to power lines and cables, in addition to providing money to prevent hacking of the power grid. Clean energy funding is also included.
  • $65 billion for broadband. Includes funding to expand broadband in rural areas and in low-income communities. Approximately $14 billion of the total would help reduce Internet bills for low-income citizens.
  • $55 billion for water infrastructure. This funding includes $15 billion for lead pipe replacement, $10 billion for chemical cleanup, and money to provide clean drinking water in tribal communities.
  • $50+ billion for cybersecurity and climate change. This resilience funding will protect infrastructure from cybersecurity attacks and address flooding, wildfires, coastal erosion, and droughts along with other extreme weather events.
  • $39 billion for public transit. Funding here provides for upgrades to public transit systems nationwide. The allocation also includes money to create new bus routes and help make public transit more accessible to seniors and disabled Americans.
  • $25 billion for airports. This allocation provides funding for major upgrades and expansions at U.S. airports. Air traffic control towers and systems would receive $5 billion of the total for upgrades.
  • $21 billion for the environment. These monies would be used to clean up superfund and brownfield sites, abandoned mines, and old oil and gas wells.
  • $17 billion for ports. Half of the funds in this category would go to the Army Corps of Engineers for port infrastructure. Additional funds would go to the Coast Guard, ferry terminals, and reduction of truck emissions at ports.
  • $11 billion for safety. Appropriations here are to address highway, pedestrian, pipeline, and other safety areas with highway safety getting the bulk of the funding.
  • $8 billion for western water infrastructure. Ongoing drought conditions in the western half of the country will be addressed through investments in water treatment, storage, and reuse facilities.
  • $7.5 bill for electric vehicle charging stations. The Biden Administration asked for this funding to build significantly more charging stations for electric vehicles across the nation.
  • $7.5 billion for electric school buses. With an emphasis on bus fleet replacement in low-income, rural, and tribal communities, this funding is expected to allow those communities to convert to zero-emission buses.

What Was in—and Not in—the $2.3 Trillion Scaled-Down Democratic Proposal

The outline below shows what in the Build Back Better Act has survived negotiations (so far) and what has not based on Democratic positions in the House. Note that as of March 2022, negotiations have not reached any concrete agreements.

What Was In

  • $382 billion for childcare and universal preschool. The plan is designed to save most American families more than half of their spending on childcare by providing two years of free preschool for every three- and four-year-old in America and additional funding for childcare.
  • $205 billion family and medical leave. Permanently authorizes the first-ever national paid family and medical leave guarantee for U.S. workers, providing up to four weeks of paid leave.
  • $190 billion for Child Tax Credit and Earned Income Credit. The proposal extends the expanded Child Tax Credit for one year and provides additional funds to extend the expanded Earned Income Tax Credit.
  • $150 billion for home care. This funding expands home care for older people and those with disabilities.
  • $175 billion for housing. The plan invests in affordable housing, including construction and rehabilitation of homes as well as investments in rental assistance and housing vouchers.
  • $40 billion higher ed and workforce development. The legislation will increase Pell Grants and provide post-high school education opportunities such as apprenticeship programs for underserved communities.
  • $17 billion for the Small Business Committee. This provides for small business access to credit, investment, and markets.
  • $40 billion for equity and other investments. Spending in this area will be designed to achieve equity through investments in maternal health, community-violence interventions, and nutrition, according to the White House.
  • $5 billion in supply chain investments. These investments will be designed to safeguard our economy and support domestic job growth.
  • $3 billion to support child nutrition. This investment will help expand eligibility and eliminate paperwork so more children can receive free school meals.
  • $275 billion in State and Local Tax (SALT) deduction relief. Accomplished by increasing and applying the cap over the long-term, allowing states and counties to raise more revenue to deliver essential public services.
  • $130 billion in ACA credits. This money will be used to expand affordable healthcare coverage, reduce premiums for more than 9 million Americans, and deliver healthcare to uninsured people in states that are not enrolled in expanded Medicaid coverage.
  • $35 billion Medicare hearing coverage. While dental and vision coverage did not make the cut, Medicare recipients will have coverage for hearing aids and hearing tests. The funding will also cover nursing home transparency and staffing standards, and bolster funding for the Elder Justice Act program.
  • $559+ billion for clean energy and climate. The plan proposes cutting greenhouse gas pollution by over a gigaton in 2030, reducing consumer energy costs, helping to create more clean air and water, and creating hundreds of thousands of jobs.
  • $100 billion for immigration. This is part of the framework, but also separate since it requires a ruling by the Senate parliamentarian. This would constitute an investment to reform the immigration system, reduce backlogs, expand legal representation, and make border processing more efficient and humane.

What Was Out

  • Medicare dental and vision benefits. Although these became victims of the budgeting axe, hearing aids and testing survived the cut.
  • Free community college. Expansion of Pell Grants and apprenticeship training remains, but free community college was taken out.
  • Billionaires income tax. This funding plan, which would have taxed the unrealized gains of certain assets of around 700 of the richest taxpayers in the country and helped fund the legislation, was removed.

Tax Offsets and the True Cost of the BBBA

Paying for the BBBA has been as contentious as the provisions of the act itself. Although the White House and Treasury insist the entire Build Back Better agenda is paid for, and then some, the CBO disagrees, saying that over 10 years the legislation would create a $367 billion deficit. This amount was later trimmed to $160 billion after subtracting the additional $207 billion brought in by increased enforcement of Internal Revenue Service tax collections.

Critics of the bill maintain that the BBBA is "riddled with design errors" and if the temporary provisions become permanent, the bill will increase the deficit even more. For now, the CBO estimate will be the basis on which the Senate debates, amends, and eventually either passes or rejects the Build Back Better Act. To that end, here are CBO estimates for major offsets including:

-$340 billion in recovered healthcare costs. Cost savings to be realized from the Children's Health Insurance Program, a cap on annual out-of-pocket Medicare costs, adjustments to uncompensated Medicaid care pools, negotiated Medicare prescription drug costs, and other prescription drug savings.

-$830 billion in business taxes. This amount comes from the 15% corporate alternative minimum tax, changes to deductions for intellectual property abroad, an excise tax on stock buybacks, and limits on interest expense deductions.

-$640 billion in individual taxes. This amount includes a surtax on income over $10 million, limitations on business loss deductions for high-income taxpayers, and revenue from the five years SALT taxes revert from an $80,000 deduction back to $10,000.

-$10 billion from retirement plan modifications. While these modifications are not expected to raise a significant amount of revenue, they are the subject of much discussion. As currently written, the BBBA would:

  • Section 138311: Prohibit all employee after-tax contributions in qualified plans and after-tax individual retirement account (IRA) contributions from being converted to Roth regardless of income level, effective for distributions, transfers, and contributions made on or after Jan. 1, 2022.
  • Section 138301: Prohibit further contributions to a Roth or traditional IRA if the account exceeds $10 million by those earning $400,000 (single), $425,000 HOH, and $450,000 MFJ effective Jan. 1, 2029.
  • Section 138301: Add a new annual reporting requirement for employer-defined contribution plans on aggregate account balances of at least $2.5 million effective Jan. 1, 2029.
  • Section 138302: Require a minimum distribution of 50% of the total retirement savings in excess of $10 million for high-income individuals (see above) effective Jan. 1, 2029.
  • Section 138302: Require a minimum distribution of all retirement savings in excess of $20 million for high-income individuals and an additional distribution of 50% of the excess over $10 million (once the excess over $20 million has been distributed). These provisions would be effective Jan. 1, 2029.
  • Section 138302: Eliminate so-called "backdoor" Roth conversions for both IRAs and employer-sponsored plans for high-income taxpayers effective Jan. 1, 2032.

A Quick Look at the Original $3.5 Trillion Bill

The original Democratic FY2022 Budget Resolution Agreement Framework memorandum was designed to enact President Biden's Build Back Better agenda as first framed. This proposal, often referred to as an investment in human infrastructure, was far-reaching and ambitious. It listed the following amounts and areas to be addressed:

  • $135 billion for the Committee on Agriculture, Nutrition, and Forestry. Funding to be used to address forest fires, reduce carbon emissions, and address drought concerns.
  • $332 billion for the Banking Committee. Including investments in public housing, the Housing Trust Fund, housing affordability, and equity and community land trusts.
  • $198 billion for the Energy and Natural Resources Committee. This would develop clean energy.
  • $67 billion for the Environment and Public Works Committee. These monies would fund low-income solar and other climate-friendly technologies.
  • $1.8 trillion for the Finance Committee. This part of the bill was for investments in working families, the older people, and the environment. It included a tax cut for Americans making less than $400,000 a year, lowering the price of prescription drugs and ensuring that wealthy and large corporations pay their fair share of taxes.
  • $726 billion for the Health, Labor, Education, and Pensions Committee. This addressed universal pre-K for three- and four-year-olds, childcare for working families, tuition-free community college, funding for historically black colleges and universities, and an expansion of the Pell Grant for higher education.
  • $37 billion for the Homeland Security and Governmental Affairs Committee. This would have electrified the federal vehicle fleet, electrified and rehabbed federal buildings, improved cybersecurity infrastructure, reinforced border management, invested in green-materials procurement, and invested in resilience. 
  • $107 billion for the Judiciary Committee. These funds addressed establishing "lawful permanent status for qualified immigrants."
  • $20.5 billion for the Indian Affairs Committee. This addressed Native American health programs and facilities, education programs and facilities, housing programs, energy programs, resilience and climate programs, BIA programs and facilities, Native language programs, and the Native Civilian Climate Corps.
  • $18 billion for the Veterans Affairs Committee. This funds upgrades to veteran facilities.
  • $83 billion for the Commerce Committee. This would have gone to investments in technology, transportation, research, manufacturing, and economic development. It provided funding for coastal resiliency and healthy oceans investments, including the National Oceans and Coastal Security Fund and the National Science Foundation research and technology directorate.

Timeline for Both Bills

Though both Democrats and Republicans praised the $1.2 trillion bipartisan infrastructure bill, it took nearly three months after it passed the Senate to be approved by the House. There remained significant challenges to be addressed before the previously $3.5 trillion (now $2.3 trillion) Build Back Better bill reached its final stages. Here's how the process for both bills has gone so far.

  • Aug. 10, 2021—Immediately after passing the bipartisan bill, the Senate voted 50 to 49 to begin debate on the $3.5 trillion infrastructure bill.
  • Aug. 11, 2021—Senate Democrats passed the $3.5 trillion budget resolution 50 to 49. Democrats in the House and Senate began the time-consuming task of drafting a final product.
  • Aug. 23, 2021—House Majority Leader Steny Hoyer sent a "Dear Colleague" letter to House members August 10 stating that the House would "return to session the evening of Aug. 23, 2021" to consider the anticipated Senate budget resolution (the $3.5 trillion bill). Hoyer said the House would remain in session "until our business for the week is concluded."
  • Aug. 24, 2021—The House of Representatives did pass the budget resolution, which also instructed House committees to write the $3.5 trillion legislation. To please Democratic centrists eager to pass the bipartisan $1.2 trillion bill, the resolution included a nonbinding commitment to vote on that infrastructure bill by September 27. In a statement, House Speaker, Nancy Pelosi said, "In consultation with the Chair of the Transportation and Infrastructure Committee, I am committing to pass the bipartisan infrastructure bill by September 27. I do so with a commitment to rally House Democratic support for its passage."
  • Sept 15, 2021—The memorandum outlining the $3.5 trillion plan recommended that congressional committees "submit legislation to the Committee on the Budget by September 15 to carry out this section, though this date is not binding." The markup was completed on time and advanced on Sept 15, 2021.
  • Sept 27, 2021—The original nonbinding deadline to vote on the $1.2 trillion infrastructure package became the deadline to begin debate on the bill with a new voting deadline of Sept 30, 2021, vis-a-vis Speaker Pelosi's "Dear Colleague" letter referenced above.
  • Sept 30, 2021—The new deadline to vote on the bipartisan infrastructure bill saw the passage of H.R. 5305 to extend funding and suspend the debt limit through Dec. 3, 2021, but no infrastructure bill. Instead, infrastructure was delayed so progressive and moderate Democrats could work out differences, especially on the still $3.5 trillion BBBA.
  • Oct. 24, 2021—House Speaker, Nancy Pelosi, announced on CNN that Democrats planned to reach "agreement" on the Build Back Better agenda and a vote on the bipartisan infrastructure bill sometime in the next week.
  • Oct. 28, 2021—President Biden revealed his framework for a scaled-down Build Back Better agenda before leaving for Europe and the G20 summit. Biden's move was designed to bring progressive Democrats on board to vote for the bipartisan infrastructure bill ahead of the passage of the yet-to-be-formally-crafted BBBA.
  • Oct. 31, 2021—In her remarks on CNN, Pelosi said the bipartisan infrastructure plan must be passed by October 31, when an extension for transportation funding programs expired. This was the new deadline for at least part of Biden's infrastructure. However, as of November 4, neither infrastructure bill had been passed.
  • Nov. 5, 2021—The House passed the $1.2 trillion Infrastructure and Jobs Act that already had passed the Senate, allowing it to go to the president's desk for signature.
  • Nov. 15, 2021—The president signed the Infrastructure and Jobs Act bill into law.
  • Nov. 16, 2021—Vice President Harris and the Department of Commerce (DOC) announced the first and second sets of grants for the Tribal Broadband Connectivity Program, totaling $2.4 million. This program is receiving additional funding through the Infrastructure Investment and Jobs Act.
  • Nov. 18, 2021—The CBO score on the Build Back Better Act was delivered to Congress, predicting a $367 billion deficit from the BBBA. Additional, not included, revenue would reduce the deficit to at least $160 billion.
  • Nov. 19, 2021—The House of Representatives, by a 220 to 213 vote, approved the Build Back Better Act and sent it to the U.S. Senate for consideration and amendments. Debate in the Senate was expected to last several weeks.
  • Nov. 19, 2021—The U.S. Department of Transportation awarded $1 billion in Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grants to 90 major projects across 47 states. This funding will be boosted by an additional $7.5 billion from the Infrastructure Investment and Jobs Act.
  • Nov. 24, 2021—The USDA began accepting applications for the $1.15 billion ReConnect rural broadband program for loans and grants to state, local, or territorial governments, corporations, Native American Tribes, and limited liability companies and cooperative organizations. Funds from the Infrastructure Investment and Jobs Act will be used to boost this program.
  • Dec. 2, 2021—The EPA announced $7.4 billion in Infrastructure Investment and Jobs Act funding for states to upgrade America’s aging water infrastructure, sewerage systems, pipes, and service lines.
  • Dec. 13, 2021—The Biden-Harris Administration announced an EV Charging Action Plan to achieve the President’s goal of building a national network of 500,000 electric vehicle chargers. The plan is funded by a $7.5 billion allocation from the bipartisan infrastructure law.
  • Dec. 15, 2021—The U.S. Department of Transportation’s Federal Highway Administration (FHWA) announced $52.5 billion in funding to all 50 states and the District of Columbia under the Bipartisan Infrastructure Law.
  • Dec. 16, 2021—The Federal Aviation Administration (FAA) at USDOT announced $3 billion in infrastructure funding for 3,075 airports to be used as investments to upgrade critical infrastructure.
  • Dec. 16, 2021—The National Highway Traffic Safety Administration (NHTSA) at USDOT announced $260 million in funding from the bipartisan infrastructure law for highway safety programs to reduce traffic crashes.
  • Dec. 16, 2021—President Biden announced what he called "a productive call with Speaker Pelosi and Majority Leader Schumer earlier today" in which the President briefed the congressional leaders on recent discussion with Senator Joe Manchin. The President indicated that Manchin "reiterated his support for Build Back Better funding at the level of the framework plan I announced in September."
  • Dec. 17, 2021—EPA announced $1 billion in funding to clean up 49 Superfund sites across 24 states. Money from the Infrastructure Investment and Jobs Act will be used to accelerate cleanup at dozens of other sites across the country, stop toxic waste from harming communities, and create good-paying jobs. 
  • Dec. 17, 2021—DOI released initial guidance for the states interested in applying for funding to cap and plug orphaned oil and gas wells that reduce methane emissions and create jobs. Initially, 26 states expressed interest in the $4.7 billion in funding for well plugging, remediation and restoration available in infrastructure programs. 
  • Dec. 21, 2021—The DOE Office of Clean Energy Demonstrations will oversee $20 billion of infrastructure funding to scale up clean energy, create new, good-paying jobs for American families and workers, and reduce pollution.
  • Dec. 23, 2021—The Maritime Administration announced $241 million in Port Infrastructure Development grants to improve ports, strengthen the nation’s supply chains to meet demand resulting from the rapid economic recovery over the past year, and help ease inflationary pressures. Funding for this program will be boosted by an additional $2.25 billion through the Bipartisan Infrastructure Law.
  • Dec. 31, 2021—The Federal Communications Commission launched the Affordable Connectivity Program providing broadband subsidies of up to $30/month for low-income households (up to $75/month for households on Tribal Lands) and up to $100 towards the purchase of a desktop, laptop or tablet computer. Funding for this program are provided by the Infrastructure Investment and Jobs Act.
  • Jan. 14, 2022—As part of the Infrastructure Investment and Jobs Act, the White House announced a $27.3 billion initiative to improve 15,000 bridges over the next five years in U.S. states, the District of Columbia, Puerto Rico, and tribes.
  • Jan. 16—Senator Tim Kaine, in an interview on Face the Nation, told host Margaret Brennan that although the most recent version of Build Back Better was, in his opinion, dead, the core parts of the legislation—including reduced childcare and education expenses, workforce training, and support for workforce healthcare—would pass.

What Is Infrastructure?

Infrastructure refers to the underlying foundation or framework of a system or organization. When used in the context of government programs, it usually describes roads, bridges, railways, and ports that provide the transportation network of a nation, state, or local area.

Infrastructure can also be used to describe the people and systems that make an organization or government function. This type of infrastructure is called social infrastructure.

What Is H.R. 3684?

H.R. 3684 is known officially as the Infrastructure Investment and Jobs Act and more informally as the bipartisan infrastructure legislation, passed by the U.S. Senate on Aug. 10, 2021. This legislation—now law—provides funding for traditional infrastructure including roads, bridges, railroads, and ports. It is expected to cost $1.2 trillion.

Does the Build Back Better Agenda Include Immigration Reform?

The new Build Back Better framework announced by President Biden on Oct. 28, 2021, includes $100 billion in funding to achieve certain types of immigration reform including: “Providing long-awaited relief to millions through reconciliation, and making enhancements to reduce backlogs, expand legal representation, and make the asylum system and border processing more efficient and humane.”

This investment is separate from the $2.2 trillion agenda because it requires a ruling by the Senate parliamentarian that would allow it to be passed on a reconciliation basis—meaning, in this case. that it would not require Republican support. This appears unlikely, however, as the Senate parliamentarian has already rejected the requested immigration ruling on three different occasions.

Article Sources
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