The Biden administration's Office of Management and Budget (OMB) has issued final guidance implementing the "Build America, Buy America" (BABA) provisions in the Infrastructure Investment and Jobs Act (IIJA).
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At a current price tag of over $2 trillion, the American Jobs Plan would provide a boost to a wide range of sectors and companies, reinvigorating traditional U.S. infrastructure as well as supporting new nontraditional infrastructure programs. However, this is not a free lunch for the U.S. equity market, as the proposed increases in the corporate and global intangible low-taxed income tax rates to pay for the plan will be a headwind.
We expect that this plan will be enacted as soon as this summer and, for the most part, be of similar size to the version that s currently on the table. While the scope of the plan is large and wide-ranging, we do not expect that it will affect our long-term projections for economic growth in the United States.