Infrastructure Investment at a Crossroads: Why 2021 Could Finally Break the Logjam

As the nation emerged from a bitterly contested election cycle, one sector stood out as a rare point of potential agreement between the two parties: infrastructure. With Joe Biden projected to win the presidency and Republicans retaining control of the Senate, industry experts predicted that infrastructure may be one of the only areas where a Biden-led White House and a Republican Senate could find common ground. The implications for contractors, engineers, and construction professionals were significant, pointing toward a surge in federally funded projects that would require careful planning, specialized equipment, and skilled labor. For firms involved in subsurface work, understanding the latest advancements in Tunneling and Underground Construction Equipment Boring Machines Excavation became increasingly relevant as discussions around major infrastructure spending gained momentum.

The Legislative Landscape: The FAST Act and the 2021 Deadline

The Fixing America’s Surface Transportation (FAST) Act, the federal surface transportation authorization law in place at the time, was set to expire on September 30, 2021. This deadline created an unavoidable legislative obligation for the incoming 117th Congress. Whether through a full reauthorization or another temporary extension, lawmakers had to act.

The Highway Trust Fund Crisis

At the heart of the debate was the Highway Trust Fund (HTF), the primary federal funding mechanism for surface transportation projects. The HTF had been teetering on insolvency for years, kept afloat only through general fund transfers. A permanent fix remained elusive despite broad acknowledgment that the status quo was unsustainable. Industry stakeholders understood that without a reliable, long-term funding stream, states could not confidently commit to major projects years in advance.

Dave Bauer, president and CEO of the American Road and Transportation Builders Association (ARTBA), captured the bipartisan sentiment during an election impact webinar: “Republicans and Democrats have said for years that there’s no such thing as a Republican road or Democratic bridge.” He added, “One way or another, the Congress that begins in 2021 will have to deal with a surface reauthorization bill, even if it’s another extension.”

Bipartisan Foundations Already Laid

The Senate Environment and Public Works (EPW) Committee had already demonstrated that bipartisan cooperation on infrastructure was possible. In 2019, the committee passed the highway portion of a reauthorization bill with a unanimous 21-0 vote. Key leaders of that committee were expected to remain in place when the new Congress convened, providing continuity and a ready-made framework for negotiations.

The work done in the previous Congress was not wasted. Ray Beeman, principal and co-leader at Washington Council Ernst and Young and former House Ways and Means Committee staff, noted: “There’s been a lot of work done on this already on this issue, so it’s not like they’re completely starting from scratch in terms of ideas that are out there to fund our infrastructure.”

Funding Mechanisms: The Search for Sustainable Revenue

The most contentious aspect of any infrastructure bill has always been funding. While consensus existed on the need for investment, agreeing on how to pay for it proved far more challenging. Multiple funding mechanisms were debated, each with its own political and practical trade-offs.

The Gas Tax Dilemma

The federal gas tax had not been raised since 1993, when it was set at 18.4 cents per gallon. In the intervening decades, inflation eroded its purchasing power by more than 50 percent, while improved fuel efficiency and the rise of electric vehicles further diminished revenues. From a policy standpoint, the gas tax remained a logical user-pays mechanism. Politically, however, it was toxic.

Pat Bousliman, government affairs consultant with Subject Matter and former Senate Finance Committee staff, explained: “The gas tax makes a whole lot of sense from a policy standpoint, it’s a user pays mechanism. But there’s a reason that hasn’t been increased since 1993, it’s extremely unpopular.”

Yet at the state level, the picture looked different. Governors and state legislators who imposed gas tax increases to fund failing infrastructure were regularly reelected, suggesting that voters understood the necessity when they saw the direct benefits in their communities.

Alternative Revenue Streams

With the gas tax off the table at the federal level, policymakers explored a range of alternatives:

• Corporate tax rate increases: Biden had discussed raising the corporate tax rate to generate revenue for infrastructure investment. This approach had the advantage of producing substantial revenue without directly taxing individual consumers at the pump.
• Vehicle miles traveled (VMT) fees: A mileage-based user fee gained traction as a more sustainable long-term alternative to the gas tax, though privacy concerns and implementation costs remained significant hurdles.
• Public-private partnerships: Leveraging private capital for public infrastructure projects offered a way to stretch federal dollars further, though such arrangements came with their own complexities around tolling and revenue sharing.
• General fund transfers: While not a permanent solution, continued infusions from the general fund could bridge the gap while a more durable mechanism was developed.

Beeman emphasized that no single solution would suffice: “There’s no silver bullet out there that’s going to cover everything. Maybe we have to cobble a number of things together and sort of litigate through the policy merits of all those different options and potentially stitch together something that hopefully is enduring.” He stressed the need for a system that would “not only raise revenue in the near term, but that will also provide a good tax base going forward.”

State-Level Successes and Industry Advocacy

While federal gridlock dominated headlines, states across the country demonstrated that infrastructure investment could command public support when leaders made the case effectively. These state-level successes provided a playbook for federal advocates and demonstrated the political viability of funding mechanisms that seemed impossible in Washington.

Lessons from the States

By 2020, more than half of U.S. states had raised their gas taxes since 2013. In many cases, governors who signed these increases were reelected. The pattern suggested that voters were willing to pay for better roads and bridges when the need was clearly communicated and when they could see how the money would be spent.

ARTBA and its state affiliates had been instrumental in building this case. Bauer noted: “We’ve been supporting gas tax increases as long as we’ve been working on this, probably even longer. All of our partners have demonstrated the political viability of raising fuels taxes at the state level. From our perspective, we’re always going to be more focused on an outcome and that’s getting a robust reauthorization bill at a time our country desperately needs it.”

The Industry’s Role in Driving the Conversation

Construction industry associations played a critical role in keeping infrastructure on the legislative agenda. Through webinars, lobbying efforts, and grassroots campaigns, they maintained pressure on lawmakers while providing expert analysis on the economic benefits of investment.

For contractors preparing to bid on future projects, understanding the full range of Construction Site Support Equipment and Environmental Control Systems became essential knowledge. As federal dollars eventually began flowing, firms that had already invested in modern equipment and site management practices would be best positioned to deliver projects efficiently and profitably.

The Path Forward: What Contractors Should Watch For

Regardless of the specific legislative path Congress would ultimately take, the direction was clear: major infrastructure investment was coming. The question was not whether, but when and on what scale. Construction professionals needed to position themselves for an environment of increased federal spending and heightened demand for their services.

Key Indicators to Monitor

Several benchmarks would signal the pace and direction of federal infrastructure policy:

1. FAST Act expiration negotiations: The September 30, 2021 deadline was the primary forcing mechanism. Early movement on reauthorization in the first half of 2021 would signal strong bipartisan momentum.
2. Highway Trust Fund reform proposals: Any credible infrastructure package would need to address the HTF’s structural deficit. Proposals for VMT fees, corporate tax allocation, or other mechanisms would reveal the likely direction of long-term funding.
3. State-level bond measures: As federal funding became more predictable, states would issue transportation bonds to accelerate project delivery. The volume and timing of such issuances would indicate state confidence in federal commitment.
4. Material cost trends: A surge in infrastructure spending would increase demand for steel, concrete, asphalt, and aggregates. Contractors who locked in material prices early would gain a competitive advantage.

Practical Preparation for Contractors

Firms that weathered the uncertainty of 2020 and positioned themselves for the coming wave of infrastructure investment shared several common strategies. They reinvested in their fleets, invested in workforce development programs, and strengthened their relationships with material suppliers and subcontractors.

Bauer summed up the industry’s imperative: “The most important thing is that we move forward, especially before the deadline of the current expiration.” His words reflected a broader understanding that delay carried real costs. Every year without a robust infrastructure bill meant another year of deteriorating roads, bridges, and highways, and another year of missed economic opportunity.

For builders who had long advocated for increased infrastructure investment, the signs in late 2020 pointed toward a turning point. The combination of a president who had made infrastructure a campaign priority, a Senate that recognized the political necessity of action, and an expiring authorization bill created a window of opportunity that industry leaders were determined not to waste.

Industry professionals also took note of What Professional Builders Selected for Their Own Homes, recognizing that the same principles of quality, durability, and value that guided personal purchasing decisions applied equally to public infrastructure investments. When builders put their own reputation behind products and methods, those choices reflected the kind of long-term thinking that infrastructure policy demanded.

The parallels between the state of the road building industry and the broader infrastructure funding debate were unmistakable. As detailed in the 2021 State of the Road Building Industry Infrastructure analysis, the industry stood at a crossroads, with the potential for transformative investment on one side and continued decline on the other. The congressional decisions made in 2021 would determine which path the nation would take.

In the end, the experts who predicted bipartisan support for infrastructure in 2021 were betting on a simple proposition: that the reality of crumbling infrastructure and the political benefits of fixing it would eventually outweigh the partisan divisions that had stymied progress for so long. Whether through the gas tax, corporate revenue, user fees, or a combination of all three, the funding would need to be found. The alternative, the experts warned, was simply too costly to contemplate.