By Victor Reklaitis
Washington’s bipartisan infrastructure bill still faces a long road to becoming law, but analysts see some clear winners and losers at the moment.
The sectors viewed as benefiting from the $1 trillion measure in its current form include pharmacy benefits managers, internet providers and operators of nuclear power plants.
Sectors that are likely to be disappointed by the bipartisan legislation, which the Senate could pass as soon as this week and send over to the House , include the cryptocurrencies industry, the electric-vehicles space and clean energy, according to analysts.
One proposed source of funding for the infrastructure bill is delaying a Medicare rebate rule, with that move expected to provide about $49 billion. Analysts at Capital Alpha Partners said that’s a “win” for pharmacy benefits managers, plus “negative provisions banning spread pricing have dropped out as offsets.” CVS Health /zigman2/quotes/209664499/composite CVS +1.96% , Cigna /zigman2/quotes/208431372/composite CI +3.93% and UnitedHealth /zigman2/quotes/210453738/composite UNH +2.52% are among the big U.S. PBMs.
Internet providers such as AT&T /zigman2/quotes/203165245/composite T +1.25% and Charter /zigman2/quotes/201656355/composite CHTR +2.24% look set for a windfall as the legislation has $65 billion for improving broadband access for poor and isolated communities, including $40 billion in grants that states can dole out to operators that expand their networks. That’s according to a Wall Street Journal report on Tuesday.
There are some provisions that internet providers probably won’t appreciate, such as proposed rules on disclosing service levels and prices, but consumer advocates have complained that the bipartisan legislation steers clear of more aggressive measures, like supporting government-owned networks that would compete with companies, the WSJ report added.
What about nuclear power? The current bill includes tax credits for existing nuclear plants that will be funded at $6 billion, said analysts at Beacon Policy Advisors in a note on Tuesday. “This provision could benefit providers including Southern Co. /zigman2/quotes/208000495/composite SO +1.18% , Exelon /zigman2/quotes/205982254/composite EXC +1.77% , and Energy Harbor (ENGH), as well as uranium miners such as Energy Fuels /zigman2/quotes/201811041/composite UUUU +5.20% ,” the analysts wrote.
On the losing side, the cryptocurrencies /zigman2/quotes/31322028/realtime BTCUSD +2.74% industry has been hit by proposed new tax-reporting requirements on crypto transactions , with that provision expected to provide an estimated $28 billion in funding for the infrastructure bill. But the legislation was amended over the weekend so that it doesn’t specifically require entities that provide non-custodial cryptocurrency services, or decentralized or peer-to-peer exchanges, to report customer transactions.
The bipartisan infrastructure bill calls for $7.5 billion for charging stations for electric vehicles /zigman2/quotes/203558040/composite TSLA +0.18% /zigman2/quotes/205226835/composite GM +1.44% and $2.5 billion for electric buses, but this level of spending is well below the “ $174 billion investment to win the EV market ” that President Joe Biden proposed in March when he rolled out his infrastructure plan. Bigger spending on EVs and other green priorities could come in a separate $3.5 trillion package that Democrats are aiming to enact in tandem with the bipartisan infrastructure bill through a process known as budget reconciliation.
For clean energy /zigman2/quotes/205740995/composite ICLN +0.59% , it’s a notable setback to have one tax credit for energy providers left out of the current bipartisan legislation after it was championed by a key moderate Democrat, Sen. Joe Manchin of West Virginia, according to Beacon’s analysts.
“Despite appearing in a summary of the bipartisan infrastructure bill last week, Manchin’s tax credit, dubbed 48C in a reference to a section of the tax code, was dropped from the final text of the bill,” the analysts wrote. “The $8 billion measure sought to incentivize clean energy manufacturing and recycling, with $4 billion set aside for areas home to closed coal mines or coal power plants.”
Democrats plan to make a new push for the 48C provisions in their reconciliation package, according to a Politico report .
This is an updated version of a report first published on Aug. 3, 2021.