Pay-for Potholes and Budget Clues

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This week on Facing the Future we waded into several fast-breaking budget developments in Washington, including the Senate’s bipartisan infrastructure plan and the upcoming budget resolution. Concord Coalition Policy Director Tori Gorman and Chief Economist Steve Robinson, both Capitol Hill veterans, joined me to  examine whether the infrastructure bill is paid for and what clues the budget resolution will give us about the even bigger “reconciliation” bill expected this fall.

Gorman sorted through the sequencing. “You’re seeing the Biden agenda split into three different pieces of legislation,” she explained. “First is the bipartisan infrastructure proposal that’s being debated right now in the Senate. Next will follow a budget resolution, a planning document between the House and Senate, that Democrats will pass alone with their own majorities in the House and Senate. Then, that budget resolution will kick off a reconciliation bill that we will see much later in the year that includes all the other stuff that wasn’t included in the bipartisan infrastructure bill.”

According to Gorman, the budget resolution will provide important clues as to how the Democrats plan to draft their reconciliation bill to follow. “Clue one for me,” she said, “is what the reconciliation instructions look like.” For example, if Democrats are serious about paying for the expected $3.5 trillion bill, Gorman said that the deficit reconciliation instructions to the committees should be very small because the new spending would be offset with new revenues.

Currently, a major question for lawmakers is how, or whether, new spending in the bipartisan infrastructure plan will be paid for. Robinson said that his initial review of the 2,702 page bill left him “a little dubious that they’ve managed to come up with $550 billion of actual payfors.”

One proposed way of paying for the new spending is to repurpose unspent money previously approved for COVID relief. Robinson noted, however, that the COVID relief money was never intended to be paid for because it was designated for emergency use. “It’s a little ironic that they’re using money that was clearly deficit spending to now say we’re going to use that as a payfor to offset the bipartisan infrastructure bill.”

Robinson also emphasized that some of the repurposed COVID money was never going to be spent at all, such as funds intended for enhanced unemployment benefits in states that have terminated the program. “The question,“ Robinson said, “is if it is really a payfor to spend money that wouldn’t have been spent under the original appropriation.”

Hear more on Facing the Future. I host the program each week on WKXL, (N.H.), and it is also available via podcast. Join me and my guests as we discuss issues relating to national fiscal policy with budget experts, industry leaders, and elected officials. Past broadcasts are available here. You can subscribe to the podcast on SpotifyPandoraiTunesGoogle PodcastsStitcher or with an RSS feed. Follow Facing the Future on Facebook, and watch videos from past episodes on The Concord Coalition YouTube channel.

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