Just to get a sense of what we mean here, the Volker Institute’s 2019 estimate of deferred repairs to US infrastructure stood at over $1 trillion. Infrastructure is an important pillar on which economic output stands, and the US cannot afford to falter on spending on this while China catapults past.
Emphasising this, the Biden administration proposed a $2 trillion investment plan at the end of March 2021. The plan has stretched the definition of infrastructure to include spending on sectors like housing, elderly care, and electric vehicles. This expanded definition has been the subject of much consternation for the Republicans, who proposed their own $568 billion plan that increases road and bridge construction and maintenance allocation. The GOP plan guts funding for EVs, housing and elderly care.
The Biden bill also plans on rolling back the Trump era corporate tax cuts, which Republicans vehemently oppose. President Biden, however, has been a skilled bipartisan negotiator in the past and the final bill is likely to lie in the middle ground.
GOP vs Biden Infrastructure Plan: Allocation in Billions
|Roads and Bridges
|Housing and Elderly Care
To examine the possible effects on infrastructure stocks, we examine the physical infrastructure aspects of the plans and the stocks that could benefit.