Which Industries Stand to Gain From the $1.2T Infrastructure Bill—and Which Stand to Lose

The Senate on Tuesday approved a $1.2 trillion proposal to improve the nation’s aging infrastructure, offering hope of a historic boost to several industries that stand to benefit from increased funding and regulations. While the bill must still clear the House, where it faces a rocky path over the next few weeks, the Senate outcome marks a major step forward in President Joe Biden’s economic agenda as the nation recovers from labor constraints and financial losses due to the pandemic.

The White House projects the bill will add roughly 2 million jobs per year for American workers, and initiatives are expected to last over the course of a decade.

Here’s a look at which industries benefit—and which don’t—from provisions of the infrastructure bill in its current form.

Winner: Big telecom—but not new innovators

Cable and fiber-optic Internet companies fare well under the bill, which allocates $65 billion to improve internet access for low-income and isolated communities.

Home internet providers like AT&T and Charter Communications would receive some $40 billion in grants to expand their networks to rural areas. An additional $14.2 billion in emergency funding would help cover the cost of broadband service for low-income Americans—around $30-a-month. Both of these initiatives would increase the number of households that could eventually become full-paying customers, benefitting the telecom industry in the long-term.

But in doing so, these grants may also make it harder for new tech to keep up and compete, stifling innovation in high-speed internet technology. With more competitors delivering Internet in rural areas, it could be harder for new companies to enter the market. SpaceX, for instance, has launched hundreds of small Starlink satellites into low earth orbit in an attempt to offer high-speed, space-based Internet to rural areas—and could now have to compete with government-funded providers.

Big telecom companies stand to benefit the most from these provisions, even though a mandate to prevent practices known as “digital redlining” could prove costly by ensuring service providers don’t discriminate in where they expand networks.

Winner: Global supply chain and delivery

With roughly $130 billion in new funding for transit systems and ports of entry, supply chain and parcel industries like Amazon, FedEx and UPS will reap the benefits without having to pay for using those new roads and ports.

That’s because the bill does not include a hike in the corporate tax rate to offset the costs, which Biden proposed. Rather, funding comes from repurposed coronavirus relief money, unspent federal unemployment insurance aid and now-defunct programs, among other sources.

Amazon, Fedex and UPS, which provide on-the-ground shipping, rely on the nation’s highways to deliver goods. Increased spending on waterways and ports could also help grow the global e-commerce sector.

Winner: Electric vehicles

The bill’s $7.5 billion investment to develop electric vehicle charging stations across the country would provide a modest boom to the quickly-growing electric vehicle industry. Tesla CEO Elon Musk said the company plans to open its charging stations to other manufacturers’ vehicles this year, which could make the company eligible to receive part of the funds.

There are over 43,600 EV charging stations in the U.S., around 5,300 of which are fast chargers, according to the Department of Energy. As automakers like General Motors heavily invest in improving performance and quality of its EVs, building and operating their own charging networks could be financially challenging—meaning this federal investment in charging stations would be a crucial step forward for all players in the industry.

Although Biden sought much more funding for electric vehicles, another massive investment could come later this year as the House will vote in two weeks on a second, far-more expensive package that will include clean energy initiatives.

Winner: Metals

Upgrading the nation’s physical infrastructure like roads, bridges, pipes, electric wires and rails requires an enormous amount of steel, aluminum and copper. With approximately $550 billion in new federal spending towards commodity-intensive infrastructure projects, demand for metals is expected to increase—particularly a win for the steel industry, which is already priced at record highs and will be heavily relied on to rebuild infrastructure.

Other building materials, such as cement and lumber, could also be used for construction projects under the bill.

Winner: Nuclear power

Increased investment in nuclear energy would be a big win for operators like Exelon Corporation and uranium miners. The nuclear power industry provides 20% of the nation’s electricity, but cheaper electricity produced using natural gas and renewables have forced some reactors to close.

Despite calls from progressives to invest in renewable energy sources like solar and wind power, the bill aims to boost the struggling nuclear power industry through a four-year, $6 billion program to keep nuclear reactors in operation.

Loser: Chemical plants—and their dependents

In an effort to clean up toxic waste, the bill revives a ‘superfund tax’ on chemical producers that may increase costs for plant operations. Fees would be imposed on 42 chemicals, including many of the materials needed for infrastructure and climate improvements—such as plastics and other synthetics—at double the rates in place when the tax expired in 1995.

The revived taxes would be imposed until December 31, 2031 and apply to the production and imports of several chemicals that harm the environment when released, such as methane, butane, benzene, toluene, xylene, ethylene, propylene, butadiene, butylene and acetylene. Under the bill, chemical producers would be charged $9.74/ton, except for methane production at $6.88/ton. Taxes on many other common chemicals, such as chlorine, ammonia, phosphorus, hydrogen fluoride and sulfuric acid, would also be imposed.

In total, this superfund tax is expected to cost the American chemical industry more than $1.2 billion per year, and the added costs could exceed profit margins for some chemicals and plant operations. During Senate discussions, Texas Senator Ted Cruz warned that some manufacturing plants could be forced to close—or move overseas—because of the higher cost of raw materials that depend on the taxed chemicals. The prices of consumer goods could also be impacted by the regulation.

Loser: Cryptocurrency

Although some lawmakers see cryptocurrency as a source of technological innovation, industry leaders fear the bill presents an obstacle for growth. The bill would impose stricter tax-reporting requirements for cryptocurrency brokers, mandating brokers to report gains and transactions of more than $10,000 to the Internal Revenue Service similar to stockbroking practices.

However, some companies that seemingly fall under the new law, such as cryptocurrency miners, developers and stakers, don’t have access to the technical information they’d be asked to report since they lack customers—presenting a possible challenge to the growing industry.

Leaders also fear the bill could pave the way for tighter regulation of cryptocurrency, as the plan is estimated to bring about $28 billion in tax revenue over 10 years.

Loser: Big pharma

Medicare spent more than $752 million to discard unused drugs in 2019, according to government data. More than a third of that spending came from four drugmakers alone—Takeda, Roche, Amgen and Bristol Myers Squibb. Takeda’s Velcade drug, which treats multiple myeloma, a bone marrow cancer, only sells the drug in 3.5 milligram vials in the U.S. even though most patients need just a fraction of that—less than 2 milligrams. As a result, Medicare spent more than $114 million to safely discard Velcade in 2019, causing insurance premiums to rise.

In an effort to lower these premiums, the bill targets drugmakers to stop overpacking single-use containers starting in 2023. The bill would require drugmakers to refund Medicare for drug waste, which could force some big pharmaceutical companies to repay the government around $100 million annually for medicine that is discarded by doctors due to overpackaging. There are some exemptions to this provision—drugs that have been covered by Medicare for fewer than 18 months will not have to pay. Money the government raises through this bill would help offset part of the $550 billion in new federal spending for physical infrastructure projects.