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July 29, 2021

Senate votes to begin debate on bipartisan infrastructure bill, 67-32

Includes $550B in new spending for core infrastructure, paid for through repurposing COVID relief funds, drug rebate rule delay, cryptocurrency tax compliance measure, other items

On Wednesday, July 28, the Senate voted, 67-32, to proceed to a bipartisan infrastructure bill (HR 3684) that was the product of weeks of negotiations among a core group of 10 senators (five Democrats and five Republicans). The deal, which has the backing of President Biden, includes $550 billion in new federal spending, compared with the $578 billion figure initially agreed upon last month. The proposed package features historic investments in the nation's core infrastructure including roads and bridges, rail, transit, ports, airports, water systems and broadband.

Along with all Democratic senators and both Independents, 17 Republicans voted to proceed to the bill: Sens. Blunt (R-MO), Burr (R-NC), Capito (R-WV), Cassidy (R-LA), Collins (R-ME), Cramer (R-ND), Crapo (R-ID), Graham (R-SC), Grassley (R-IA), Hoeven (R-ND), McConnell (R-KY), Murkowski (R-AK), Portman (R-OH), Risch (R-ID), Romney (R-UT), Tillis (R-NC) and Young (R-IN).

The new spending is paid for in part by several health care offsets including the recoupment of $205 billion in unused COVID-19 relief dollars; delay of the Trump-era Medicare Part D rebate rule; and extension of the Medicare sequester. Other offsets include billions from new cryptocurrency information reporting; "G-fees" on mortgages backed by Fannie Mae and Freddie Mac; "dynamic scoring" of higher tax collections from economic growth; "pension smoothing" changes for defined-benefit plans; and the reinstatement of some Superfund fees.

Speaking from the floor after the vote, Majority Leader Chuck Schumer (D-NY) said, "My goal remains to pass both the bipartisan infrastructure bill and a budget resolution during this work period — both. It might take some long nights, it might eat into our weekends. But we are going to get the job done and we are on track. The vote tonight means we are on track to reach our two-track goal before the Senate adjourns for the August recess." The Senate could vote on passage this weekend or next week. Schumer had previously said on Wednesday that senators should be prepared to work through the weekend in order to finish hammering out the details of the agreement into legislative text. House Speaker Nancy Pelosi (D-CA) also told reporters today she was "rooting" for the success of the package but could not commit to moving it in the House until she knows more.

The $550 billion in new spending, over five years, includes:

  • $110 billion for roads, bridges, and major projects
  • $66 billion for passenger and freight rail
  • $11 billion for highway and pedestrian safety programs
  • $39.2 billion for public transit repaid
  • 65 billion for broadband deployment
  • $17.3 billion for ports and waterways
  • $25 billion for airports
  • $55 billion for water infrastructure
  • $73 billion for power and grid reliability and resiliency
  • $46 billion for cybersecurity and resiliency
  • $7.5 billion for low-carbon and zero-emission school buses and ferries
  • $7.5 billion for electric vehicles (EVs) and low-carbon school buses and ferries

New spending pay-fors include:

  • $205 billion in repurposed COVID relief funds
  • Funding from recouping fraudulently paid federal unemployment insurance (UI) benefits
  • $49 billion from delaying the Medicare Part D rebate rule
  • $53 billion from certain states returning used enhanced federal UI supplement
  • $20 billion from sales of future spectrum auctions and $67 billion from the proceeds of the Feb. 2021 c-band auction
  • $56 billion in economic growth resulting from a 33% return on investment in these long-term infrastructure projects
  • $28 billion from applying information reporting requirements to cryptocurrency
  • $21 billion from extending fees on GSEs
  • $13 billion from reinstating certain Superfund fees
  • $8.7 billion from the mandatory sequester
  • $6 billion from extending customs user fees
  • $6 billion in sales from the Strategic Petroleum Reserve
  • $3 billion in savings from reducing Medicare spending on discarded medications from large, single-use drug vials
  • $2.9 billion from extending available interest rate smoothing options for defined benefit pension plans

Prior to the release of the agreement, hospital groups raised concerns over the potential repurposing of outstanding COVID-19 provider relief funds and the extension of the Medicare sequester to offset the bill, noting that the need for relief funds remains strong as facilities are still recovering from the impact of the pandemic. Notably, a proposed clawback of $43.7 billion in unspent pandemic relief funds marked for health-care providers, which the bipartisan group had considered as a pay-for, was not included in the bill, with Senate Finance Committee Chairman Ron Wyden (D-OR) telling Bloomberg that coronavirus "cases are going up. I want to make sure this doesn't impact our nursing homes and hospitals that are getting hit."

Pharmaceutical manufacturers had also expressed their dissatisfaction with delay of the Medicare Part D rebate rule, saying delaying or eliminating the rule runs counter to campaign promises to make drugs affordable. The rule would have effectively eliminated rebates in Part D, disallowing them unless they're passed through directly to the point of sale.


Contact Information
For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
   • Any member of the group, at (202) 293-7474.


Bipartisan infrastructure fact sheet

Bipartisan infrastructure summary