On Monday, I wrote to you about how despite endless posturing and drama from both sides of the aisle, our politicians actually agree on a lot of things.

And right now, there are two issues both parties in Congress have common ground on.

They center around two of our main Distortion profit themes: Infrastructure and New Energy.

So as promised, today, I’ll be diving into two main bills with bipartisan backing that are set to change the face of an important public sector – infrastructure, and how you can get in on the companies set to benefit from these new laws…

We’ve Got Ways to Go for American Infrastructure

Wherever you look, you can see the flashing red signs. America needs to up its infrastructure game. We need to start updating and building – yesterday.

The American Society of Engineers’ report card comes out every four years. In 2021, it ranked America’s infrastructure at a C-.

That was the first time it exceeded the D range in two decades. But still, were you ever happy about a C- in school?

Their report covered areas from drinking water to bridges to aviation to energy. It also said America needs $6 trillion to get a B. So, we’ve got a lot of work to do.

That abysmal score helped motivate two mega-bills:

  • The $1.2 trillion Bipartisan Infrastructure Act.

  • And the Inflation Reduction Act, which includes $386 billion of climate and energy spending and tax breaks.

The goal of both is to invest in American infrastructure, materials, technologies, and jobs.

But we’ve got a ways to go.

2023 Is an Important Year for Policymaking

Building infrastructure comes back to the issue I talked about on Monday.

It takes time for money allocated on the federal level to make it to the local or state level to fund projects.

This is the main complaint I get time and time again from the elected officials and their senior staffers. The money is there – it’s just not being directed as quickly or efficiently as they need it to be.

And in that sense, this year is critical. That’s mostly because it’s a “between” year politically.

See, during election years, everyone is focused on the elections. But in “between” years like this one, there’s always more energy to pass bills.

We already elected a new Congress and Senate for the 2023-2024 session. And there’s no presidential election to distract Washington this year.

Now, the presidential election is coming up in 2024.

That also means politicians will rush to get new laws and spending approved. That way, they can report back to their constituents. And they can make good on any promises they made to their corporate or political action committees (PACs).

In other words, it helps them line up donor contributions in time to campaign – for themselves or for their friends – in the election year.

And that brings us back to this year’s government winners.

Follow Washington’s Money

Despite what the Fed does, Washington will always dole out federal contracts to its favorite companies. It’s one way to ensure more votes.

And based on my intel from contacts in the Beltway, the size of government contracts will only increase.

This will not happen overnight. We are talking about the government. But there will be more movement this year.

Funds from big bills will start to flow to projects around the country. And smaller legislation will get passed where there is common ground.

One key area of common ground is nuclear energy. On that, one of my contacts on the Hill, who works with a senior congressional committee, pointed out the following to me…

Rep. Garamendi (D-CA) is against nuclear proliferation. But he supports building out nuclear energy projects to power Main Street.

My contact also noted that the same holds true for Rep. Thomas Massie (R-KY).

Now, Massie is quite brilliant. He has two engineering degrees from MIT. And I have fond memories of a long conversation I had with him about derivatives and banking.

And on the topic of energy, he also supports building better nuclear energy and other infrastructure. In Massie’s own words:

America, and Kentucky in particular, has abundant natural resources including coal, oil, natural gas, shale, nuclear, solar, wind, and geothermal. I will support all domestic sources of energy as long as they can compete in the free market without subsidies.

I anticipate more conversations with him or his staff on energy independence this year, especially on nuclear (and solar) power.

And regardless of your views on alternative energy, or even on subsidies, there’s a big opportunity here.

So how can you take advantage of Washington’s infrastructure spending?

One way to do that is through the iShares U.S. Infrastructure ETF (IFRA).

This exchange-traded fund (ETF) has 156 holdings in the infrastructure sector. That includes big names – and government favorites – like Cleveland-Cliffs, Constellation Energy, and PG&E.

It can give you exposure to companies that potentially stand to gain from Washington’s infrastructure spending.



Nomi Prins
Editor, Inside Wall Street with Nomi Prins