Lobbyists turn to infrastructure law’s implementation
The $1.2 trillion bipartisan infrastructure bill is enshrined into law, but the lobbying over its implementation is just getting started.
The spending package, which aims to rebuild roads, bridges and rail and expand broadband and clean drinking water, gives federal agencies broad powers to craft key policies. That opens up an opportunity for industry lobbyists to fight provisions they unsuccessfully urged Congress to strip from the final bill — as well as scramble over how and where billions of federal dollars will be spent.
The fast-growing cryptocurrency industry, for example, lost its first lobbying battle when the infrastructure bill included a measure that requires brokers to disclose digital asset transactions to the IRS.
Advocates warned that the law’s broad language could apply to crypto miners or wallet developers who are unable to comply with the tax reporting rules. After failing to secure an amendment to better define what crypto “brokers” are, they’re now shifting their lobbying efforts to the Treasury Department, which is tasked with writing the new rules.
“It’s our job as the crypto industry to have conversations with the IRS and Treasury and explain to them why if they attempt to go too broad, it simply won’t work,” said Kristin Smith, executive director of the Blockchain Association, which lobbies on behalf of crypto exchanges such as Binance.US and Kraken.
The crypto provisions are written in a way that gives regulators leeway to craft rules that don’t hurt the industry, Smith said, adding that she is “fairly encouraged” by how the Biden administration has engaged with the crypto advocates on regulatory issues.
Still, crypto lobbying groups continue to push lawmakers to make legislative changes to the infrastructure bill, backing an amendment from Sens. Ron Wyden (D-Ore.) and Cynthia Lummis (R-Wyo.) that would clarify the bill’s “broker” definition.
“We would certainly prefer to have the underlying language fixed in law, so we don’t have this ambiguity hanging out there with the regulators at the IRS,” Smith said.
Meanwhile, internet service providers (ISPs) are expected to aggressively lobby the National Telecommunications and Information Administration (NTIA) as it crafts new internet rules under the infrastructure bill’s $65 billion broadband expansion plan.
The relatively tiny agency has six months to develop a proposal that will require recipients of federal broadband funding to provide a low-cost broadband option and encourage states to explore alternatives to dominant ISPs such as coops, nonprofits and municipalities.
The NTIA will have the final say as to what kinds of speeds and prices providers must offer. An aggressive broadband plan could hurt the bottom line of ISPs that have long operated in underserved communities without any competition.
“The language in the legislation offers a baseline of requirements that need to be met, and it provides some flexibility to the agencies to interpret just how far they can go,” said Greg Guice, director of government affairs at Public Knowledge, a nonprofit that advocates for increased access to affordable high-speed internet.
“Competition, affordability, speed, reliability, resiliency — with all of those things there is some flexibility, and ISPs would like to keep them at a minimum level,” he added.
States will play a key major role in implementing the broadband rules. That’s another lobbying avenue for ISPs, which successfully pushed more than a dozen states to adopt rules limiting or blocking municipal broadband networks.
The Federal Communications Commission (FCC), meanwhile, is tasked with creating regulations requiring ISPs to disclose their network performance, data collection and other key factors to customers. The FCC must also craft rules that prevent ISPs from discriminating on customers based on the a region’s income or demographic characteristics.
The NTIA has not had a permanent director for more than two years, while the FCC is currently missing a commissioner. Senate Democrats plan to hold a confirmation hearing for President Biden’s picks to fill those positions on Wednesday.
“Having these vacancies linger into next year would be unacceptable,” Guice said. “There’s a lot expected of these agencies, and to not have full leadership just hobbles their ability to get done what Congress asked them to do.”
The infrastructure bill, along with Democrats’ multitrillion-dollar COVID-19 relief plan and their budget reconciliation package, sparked a lobbying boom in the nation’s capital. Federal lobbying spending surpassed $2.7 trillion through the first nine months of the 2021, the highest figure on record, according to money-in-politics watchdog OpenSecrets.
Several agencies will be the battleground for intense lobbying battles. The infrastructure bill directs the Department of Energy to create new standards around hydrogen energy, setting the stage for a dispute between environmental groups and oil and gas companies over whether hydrogen sourced from fossil fuels counts as “clean hydrogen” that is eligible for federal funding.
Construction lobbying groups are eager to ensure that the Department of Transportation (DOT) follows through on the infrastructure bill’s provisions to streamline the environmental review and permitting process, as the Biden administration has frequently sought to expand, not shrink, environmental review of major construction projects.
Michele Stanley, vice president of government and regulatory affairs at the National Stone, Sand and Gravel Association, said that the streamlining measure will boost its members “by enhancing permit streamlining and eliminating duplicative permitting applications, without sacrificing environmental protection and diligent review.”
The DOT has the heaviest lift of any agency, tasked with doling out hundreds of billions of dollars in grants and loans to overhaul roads and bridges, rail, public transit, and ports.
Only states, municipalities and other government entities are eligible to apply for most transportation grants, likely shifting companies’ lobbying efforts from Washington, D.C., to the state and local level as they compete for lucrative contracts.
Construction groups are pushing state legislators and local officials to fully match federal dollars to ensure all of the possible transportation projects get funded.
“It’s going to be very important for DOT to inform states about what is in this legislation and get this right early in terms of implementation,” said Jay Hansen, executive vice president for advocacy at the National Asphalt Pavement Association. “Because if you get it wrong, you lose a construction season and nobody wants that.”
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