{"id":9454,"date":"2021-04-01T15:32:39","date_gmt":"2021-04-01T15:32:39","guid":{"rendered":"https:\/\/zackspcg.com\/blog\/?p=9454"},"modified":"2022-02-26T13:05:52","modified_gmt":"2022-02-26T13:05:52","slug":"prospects-for-the-3-trillion-infrastructure-bill","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/prospects-for-the-3-trillion-infrastructure-bill\/","title":{"rendered":"Prospects for the $3 Trillion Infrastructure Bill"},"content":{"rendered":"\n

Ted W. from Lancaster,\nPA asks: <\/em>Good Morning Mitch, I\u2019d like to hear your thoughts on the\npotential $3 trillion infrastructure spending bill. For starters, is this even\npossible or is it just politics as usual? I\u2019m also curious about how\ninfrastructure bills impact the economy. Thank you.<\/p>\n\n\n\n

Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n

Thanks for writing, Ted \u2013 great question. In recent history,\nthe infrastructure issue has gotten plenty of airtime on campaign trails, only\nto fizzle when it comes time to actually pass bills. We have not seen any major\ninvestment in infrastructure in decades \u2013 there are always disagreements on\ncost and how to pay for it. <\/p>\n\n\n\n

No one should rush to assume \u2018this time will be different,\u2019\nbut it is meaningful to acknowledge that infrastructure seems to be the second\nmajor priority of the Biden administration (the first priority being the\nalready passed $1.9 trillion stimulus bill). This prioritization is akin to the\n2017 Tax Cut and Jobs Act passed during the Trump administration, meaning the\ninfrastructure bill is receiving quite a bit of national attention \u2013 even\nbefore any details have been revealed.1<\/sup><\/p>\n\n\n\n

__________________________________________________________________________<\/p>\n\n\n\n

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As difficult as it may seem, try to remain calm and not give\ninto fear or panic. The actions you take right now have the greatest potential\nto define your financial future.<\/p>\n\n\n\n

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__________________________________________________________________________<\/p>\n\n\n\n

What we know so far about the $3 trillion Biden proposal is\nthat it may be broken into two parts: first is more traditional infrastructure\nspending, focused on roads, bridges, water infrastructure, and expanding\nbroadband. I\u2019ll touch on the second part below. <\/p>\n\n\n\n

With regards to at least roads, there may be some funding\navailable even if a larger bill does not pass. The 2015 federal surface\ntransportation funding authorization, known as the FAST Act, is set to expire\nin September, but there appears to be bipartisan consensus to extend the\nprogram and increase the pool of funding. The Senate committee overseeing the\nmatter said funding should increase by 27%, while the relevant House committee\nwants a more than 40% increase. Even if there is not a sweeping infrastructure\nbill, a bigger funding pool for the Highway Trust Fund should boost\ninfrastructure spending. <\/p>\n\n\n\n

The second part of the infrastructure package takes on a\nless traditional definition of infrastructure, focusing on education and\nhealthcare \u2013 what Biden refers to as the \u201ccaregiving economy.\u201d This part of the\nbill would seek to extend the expanded child tax credit, provide universal\npre-kindergarten and tuition-free community college, and increase funding for\nelder care services \u2013 among many other proposals. <\/p>\n\n\n\n

Taken together, the $3 trillion-over-ten-year infrastructure\nplan is massive and thus faces meaningful hurdles in the 50-50 Senate. What\u2019s\nmore, the notion of paying for it with higher tax increases on corporations,\nhigher top marginal tax rates for high-income individuals, tightening international\ntax rules, and increasing the capital gains tax make it dead on arrival for\nmost Republicans. Whether Democrats try to use other means to pass the bill\nremains to be seen. <\/p>\n\n\n\n

Regarding your question, significant infrastructure spending\nwill generally have multiplier effects on the real economy, at least with\nregards to road, bridge, and broadband building. Not only does infrastructure\nspending go dollar-for-dollar into the real economy with spending on gravel,\nasphalt, concrete, cable, and more, it also creates jobs needed to do the\nbuilding \u2013 which feeds into personal incomes and consumer spending. <\/p>\n\n\n\n

At this point, however, it is important to remember that\ninfrastructure bills, while popular, have had a lot of difficulties getting\npassed. The national attention this bill is receiving may change the calculus\nfor both sides, but there is little doubt reaching an actual agreement is a\ntall order.<\/p>\n\n\n\n

We\u2019re living through challenging times \u2013 the market is very\nvolatile and we are uncertain how long it may take to fully recover. I\ncompletely understand the concern that investors have towards the future. While\nit\u2019s difficult to remain calm, it\u2019s also important to take actions right now\nthat have the greatest potential to define your financial future. <\/p>\n\n\n\n

That\u2019s why we have put together a free Black Swan investing\nplaybook3<\/sup> with insights and guidance to help you seek success when\ninvesting through these unprecedented times. If you have $500,000 or more to\ninvest, get our free investing playbook today. You\u2019ll learn about seven\ntime-tested guidelines to help you seek investing success through this historic\n\u201cBlack Swan\u201d market downturn.<\/p>\n","protected":false},"excerpt":{"rendered":"

Mitch takes a closer look at what’s in the proposed infrastructure bill, and its odds of actually becoming law.<\/p>\n","protected":false},"author":3,"featured_media":7436,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-9454","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9454","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=9454"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9454\/revisions"}],"predecessor-version":[{"id":10423,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9454\/revisions\/10423"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=9454"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=9454"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=9454"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}