It’s Infrastructure Week….Again

Author: Tori Gorman
Share this page

Like the boy who cried wolf, the political media has declared this to be “Infrastructure Week” in the halls of Congress…again. The president has been abroad meeting with leaders of NATO, the EU, the G-7 and Russia, but term sheets are flying around Capitol Hill, so this time must be the real deal, right?


On one hand, both parties have several incentives to strike a deal: most lawmakers agree the investment is sorely needed, surface transportation programs expire on September 30, and frankly, Congressional Republicans are eager to head off a larger, partisan package that would unravel much of their 2017 corporate tax cut.

On the other hand, Senate Minority Leader Mitch McConnell has no incentive to help Senate Democrats and President Biden notch a legislative victory, and Democrats can move a partisan bill through the House and Senate without Republican support. Is there hope for a bipartisan, fiscally responsible package?

At present, there are three main areas of contention: size, scope, and payfors.

Size. At first blush, the two parties don’t seem very far apart on top line numbers. President Biden’s most recent offer of $1.2 trillion seems in line with the $1.2 trillion Senate bipartisan proposal from a 10-person rump group led by Senators Rob Portman (R-OH) and Kristen Sinema (D-AZ). But while the Biden proposal is all new spending above the budget baseline, the Senate bipartisan proposal offers up only $580 billion in new spending. That’s a big gap.
Scope. Credit President Biden for thinking outside the box and initiating a national discussion on the definition of “infrastructure.” In his FY 2022 budget, he proposes investments in traditional infrastructure (roads, bridges, mass transit, airways, railways, waterways) but expands its scope to include major investments in broadband and “human” capital – education, child care, job retraining, health care, and social services. Republicans, however, are reluctant to move much beyond the traditional view.
Payfors. Both sides have publicly committed to finding offsets for the new spending. With our nation’s debt-to-GDP ratio now in excess of 100 percent with no signs of slowing, it is essential that lawmakers stay true to their promise. Unfortunately, the Venn diagram of mutually-agreeable payfors is an empty null set.

Democrats propose to finance their spending package with a partial rollback of the 2017 corporate tax cut—an anathema to Republicans. Republicans propose to pay for their proposal by indexing the existing federal gas tax to inflation, repurposing unspent COVID funds, and imposing an annual surcharge on electric vehicles—proposals that run afoul of Democrat campaign promises, including a commitment to reject any tax increase that would affect middle- and low-income households.

Of the three points of contention, finding offsets for the new spending seems the most intractable as both parties have put forward policies that cross the opposing party’s bright red lines.

The Portman-Sinema proposal also includes seed capital for a federal infrastructure “bank” that would provide low-interest or no-interest loans for traditional infrastructure projects, but this approach makes sense only for a limited number of projects—revenue-generating projects like toll roads, toll bridges, and mass transit.

Adding to the murky outlook is the specter of reconciliation. While President Biden has expressed his desire for a bipartisan deal, Congressional Democrats can, if they choose, move their own infrastructure bill via the partisan, fast-track process and completely bypass Republicans.

Indeed, Senate Majority Leader, Chuck Schumer (D-NY) has admitted that infrastructure is proceeding on a dual-track process. Senate Budget Committee Chairman Bernie Sanders (I-VT) is drafting a partisan reconciliation bill at the same time the Biden administration is pursuing a bipartisan package in the Senate.

Republicans are right to wonder how serious Democrats are about achieving bipartisan consensus when Democrats can move their own product unilaterally. At the same time, moderate Democrats in the House and Senate should be concerned that a partisan approach will overreach and have consequences in their 2022 midterm elections.

The combination of these mutually-exclusive tensions make it hard to see how a fiscally responsible, bipartisan package emerges victorious.

Is “Infrastructure Week” truly different this time?


Share this page

Related Blogs