Biden’s infrastructure deal faces political headwinds, math questions | Voice of America


WASHINGTON – When President Joe Biden and a bipartisan group of senators met at the White House on Thursday to announce that they have reached a deal to spend up to $ 1.2 trillion on basic infrastructure over the next eight years, this has been touted as a triumphant moment for those who claim it is still possible to work across partisan lines in Congress.

It was also a golden moment for those who claim that Congress can meet great challenges without increasing the federal deficit.

“We agreed on the price, scope and method of payment. It was not easy to get agreement on all three, but it was essential, ”Maine Senator Susan Collins, a Republican, said of the package. The deal includes $ 579 billion in new spending, with the balance being reallocated federal funds from other programs.

Just days after that press conference, however, the bipartisan nature of the deal is unraveling. Meanwhile, budget experts examining the list of ‘pay-for’ to fund the initiative say the proposal is full of accounting gimmicks that won’t survive the in-depth analysis that the non-partisan Congressional Budget Office (CBO) applies to expense invoices.

Negotiators are relying on a number of questionable assumptions. For example, the plan assumes that the Internal Revenue Service (IRS) can find a better way to crack down on tax-avoiders, that Congress will agree to reimpose unpopular fees on industries and individuals, and that the government may raise significantly more funds from the 5G wave rights auction than experts believe they are worth.

Disgruntled Republicans

The significance of the bipartisan nature of the deal is that with the support of just 10 Republicans, it could clear the filibuster, allowing Republican Party lawmakers to block nearly any law that cannot muster the support of 60 senators.

But Republicans, including some who stood with the president at the announcement on Thursday, said on Friday they were angry with Biden for the comments made at the press conference and were already reconsidering their support. to the agreement.

Biden had presented the bill as a feat of legislative finesse, saying, “Neither side got everything they wanted in this deal, and that’s what it means to compromise.” However, he went on to say that he will not sign the bipartisan agreement unless it is presented at the same time as a separate bill filled with priorities Republicans do not like. This second bill would be structured as a budget “reconciliation” measure that could be passed by the Senate with just 51 votes, which Democrats have.

South Carolina Senator Lindsey Graham, a Republican who had said he would vote for a bill based on the infrastructure deal, said he would withdraw his support if Democrats attempted to pass it in tandem with a partisan reconciliation bill.

Questionable budget experts

Non-partisan groups analyzing the proposal have questioned claims that the sources of funding identified by negotiators would in fact make up the difference between money reallocated to infrastructure spending and the new spending envisioned in the deal.

“It is exciting that the two sides have agreed on a major investment in infrastructure,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center. “But it is frustrating that they are not able to come to a similar agreement on a set of fees that would fully offset the cost of the package.”

He said both sides have ideas on compensations that are worthwhile and are certainly worth considering. “But I expect that when CBO (analyzes) this, it will show that there is only a relatively small part of the overall package that is ultimately paid for,” he added.

“There are a lot of good policies here, and I’m so glad they’re trying to pay for it,” said Marc Goldwein, senior vice president and senior policy director of the Committee for a Responsible Federal Budget. “But I’m worried that when the CBO looks at these numbers, they don’t measure up. They will probably save less than expected. And some policies won’t save anything at all.

Specific proposals

The deal offers paid benefits that everyone believes would increase income, such as an effort to reduce the difference between the taxes Americans owe and the taxes they actually pay.

The administration has already announced plans to strengthen the law enforcement division at the IRS, and the deal announced Thursday assumes a $ 40 billion investment in enforcement would bring in up to $ 100 billion. dollars in returns. While experts unanimously agree that increasing funding for the app will generate positive returns, there is little consensus on what the dollar-for-dollar advantage will actually be from such investments.

Other measures that would generate measurable returns for the Treasury include extending certain user fees for customs inspections and reinstating fees for certain environmental clean-up projects.

The advantages of other paid systems were much less certain. The fact sheet distributed by the White House appears to include individual state investments in broadband infrastructure as part of the $ 1.2 billion total for federal spending. Other assumptions include $ 100 million from unspecified public-private partnerships, sales of the strategic oil reserve, and the generation of $ 180 billion in private sector investment with $ 20 billion in loan guarantees.

Familiar stuff

“Some of them are long-lived,” said Steve Robinson, chief economist of the Concord Coalition, a non-partisan group that advocates balanced budgets and deficit reduction.

“User fees, the strategic oil reserve and spectrum [auctions] are things that have probably been used in every budget deal made in the last decade or more, ”said Robinson, a former staff member of the Senate and House budget committees. “These are all true proposals to some extent, but there is a lot of uncertainty around a number of them, which raises doubts as to the strength of the numbers.”

Ultimately, he said, proposals like these are aimed at ensuring lawmakers can claim the mantle of fiscal responsibility. Some of the measures most likely to generate returns, such as increased enforcement of the IRS, may not even be factored into the costs of the proposal when the Congressional Budget Office produces the official ‘score’ or tally. budget.

“There is the technical and budgetary application, and then there is just the political,” he said. “Can I say I plausibly paid for it?” Yes. I think members are more concerned with the latter than the former.

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