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Budget Reconciliation Bill Includes Transportation Priorities

U.S. Senator Joe Manchin (D-WV) and Senate Majority Leader Chuck Schumer (D-NY) have come to an agreement on a $700 billion reconciliation package, titled the Inflation Reduction Act, that includes provisions on tax, healthcare, energy, and climate. The bill also includes billions in transportation funding.

Notably, the Senators reached a compromise on electric vehicle tax credits, which has been a sticking point in the negotiations for months. The legislation includes a $4,000 tax credit for low- and middle-income Americans to buy used electric vehicles and up to $7,500 tax credits to buy new electric vehicles. The income limit to receive a tax credit is $300,000 for a couple, $225,000 for a head of household, and $150,000 for any other filer.

Other key transportation provisions in the proposed legislation include:

  • Tax credits and grants for clean fuels and clean commercial vehicles;
  • Up to $20 billion in loans to build new automobile factories into plants that can manufacture clean vehicles;
  • $3 billion for the U.S. Postal Service to purchase electric vehicles;
  • $1 billion in grants for clean heavy-duty vehicles like school and transit buses along with garbage trucks; and
  • $2 billion in grants to retool existing automobile factories into plants that can manufacture clean vehicles.

The U.S. Senate is in session this week to potentially vote on this legislation. It still remains to be seen whether or not the Senate Parlimentarian approves the legislation for the budget reconciliation process which allows the chamber to circumvent the filibuster, meaning the legislation would require only a simple majority to pass.

Read the full bill text here.