President Biden’s COVID Relief Packages and “Build Back Better” Plan
The Biden Administration stated that it is focusing on curbing the economic effects of the pandemic through proposed legislative relief packages.
On February 2, 2021, the Senate voted to advance Biden’s first legislative priority – the “American Rescue Plan.” This Plan targets COVID-19 issues by allocating funding that may be used for several purposes, including construction (e.g., $130 billion for K-12 schools, some of which may be applied to making physical improvements, and $350 billion in emergency assistance to state, local and territorial governments, some of which could be used for construction).
Of greater significance to the construction industry, financial experts and construction industry officials predict that substantial funding will be proposed in connection with Biden’s “Build Back Better” recovery plan. President Biden has announced that he will describe the Build Back Better plan in greater detail at the State of Union address (February 23, 2021), but stated that it will boost the economy by producing millions of American jobs through the rebuilding and development of climate-friendly and/or high-tech infrastructure. Key elements of the plan include:
- Incentivizing American manufacturers, researchers, and developers to keep jobs in America.
- Mobilizing American resources to build modern and sustainable infrastructure, including roads, bridges, energy grids, schools, and universal broadband.
As the Biden Administration takes steps to enact “Build Back Better,” various states are following suit. For example, New York recently announced its intent to implement an aggressive infrastructure plan, including building signature projects, reducing impediments to existing infrastructure projects, and focusing on enhancing private sector investment and growth via public-private partnerships.
The Defense Production Act
The Defense Production Act (DPA) provides the President with authority to utilize the resources and production capacity of private companies to aid national defense. On January 21, 2021, President Biden signed an Executive Order (“Executive Order on a Sustainable Public Health Supply Chain”) granting him use of the DPA to increase the production of vaccines, testing, and equipment. The effect on the construction industry could be immediate, as the President may authorize the following actions related to construction:
- Procurement and installation of equipment, facilities, processes, or improvements to government-owned facilities. (DPA, Section 303(e)(a))
- Procurement and installation of equipment in privately owned facilities. (DPA, Section 303(e)(b))
- Improvement or renovation of privately owned facilities, as well as the sale or transfer of government-owned equipment to owners of privately owned facilities. (DPA, Section 303(e)(c), (d))
Buy America to Rebuild America
President Biden signed an Executive Order on January 25, 2021 (“Ensuring the Future is Made in All of America by All of America’s Workers”) to expand the Buy America initiative. The Executive Order seeks to promote the production of American-made goods by requiring construction firms doing business with the federal government to buy American-made products:
The United States Government should, whenever possible, procure goods, products, materials, and services from sources that will help American businesses compete in strategic industries and help America’s workers thrive.
The Executive Order is also reported to be part of the Build Back Better plan discussed above and will apply to the infrastructure and new energy projects.