Transportation Secretary Pete Buttigieg has said emphatically that a “clear direction” on infrastructure needs to be in place by the time Congress returns from its Memorial Day recess on June 7th. If that is true, infrastructure week may become a reality. Leading up to June 7th, the White House and congressional Republicans are trying to hammer out an agreement. However, given the lack of progress thus far, it seems clear that despite bi-partisan talks, such a deal isn’t imminent and infrastructure week may yet again just be a figment of the imagination of the President. This is a shame, as many common sense solutions are entirely possible to fix our nation’s infrastructure without busting the budget or raising taxes.
Biden’s infrastructure proposal comes in at a whopping $1.7 trillion and White House officials are attempting to spin this as a massive compromise proposal given that the initial ask was $2.3 trillion. Republicans, led by Sen. Shelley Moore Capito (R-W.Va.), have proposed an alternative package that comes in at just a hair under $1 trillion. The administration and congressional Democrats are viewing this as a non-starter. It’s an indication of the sad state of affairs in our nation that $1 trillion is considered measly.
In the current discussion and debate, there are two major hang-ups between the two sides. The first is the aforementioned scope and price tag. While Republicans have proposed a very narrowly tailored package focused on traditional infrastructure needs, Democrats want to include a variety of provisions unrelated to what one would normally think of as infrastructure – unless you are Sen. Kirsten Gillibrand (D-N.Y.). This “new” infrastructure includes electric vehicle subsidies and child care.
The other discrepancy settles on how the package will be paid for. Democrats have included a number of tax hikes proposed by the Biden administration. On the other hand, Republicans have proposed using the hundreds of billions of dollars of COVID relief funds that were left unspent. Both schisms reveal just how little good faith there is in the negotiations and why they should not inspire any confidence from American taxpayers.
While the Democrats have indeed come down on their initial asking price, this does not tell the whole story. At the same time the administration knocked $600 billion off its asking price, there are conversations about adding the administration’s American Families Plan to the package, which would bump it up to a $4 trillion package. It is very difficult to believe the administration is a trustworthy negotiating partner when this prospect looms over the discussions.
Those wondering what the American Families Plan has to do with infrastructure are not alone. This plan would subsidize higher education, create a universal pre-K program, extend relief checks beyond the end of the pandemic, and provide free community college. This is a $2 trillion welfare bill that the administration wants to shepherd through under the guise of infrastructure, hoping American taxpayers won’t notice.
The American Families Plan is far from the only provision unrelated to infrastructure in this package. There are provisions to implement price controls on prescription medicines based on European pricing models. The electric vehicle industry would get extended subsidies and other benefits totaling roughly $175 billion. There are tens of billions of dollars devoted to climate initiatives. This handful of examples barely scratch the surface of the money wasted in this package that could be spent actually repairing our nation’s infrastructure.
For a political party that (ostensibly) still cares about the debt and deficit, a $1 trillion proposal is no small compromise on the part of Republicans – especially when considering this is $250 billion over current spending levels, even while narrowly targeted. However, the administration claims their desire to use unspent COVID relief funds to help pay for the package is a non-starter. White House Press Secretary Jen Psaki claims that those funds will be dispersed and the ask itself is unreasonable.
However, even the most conservative estimates show that at least $130 billion in COVID relief funds remain unspent. The highest estimates, according to House Minority Whip Steve Scalise (R-La.), range up to $1 trillion in unspent COVID relief funds. It has been quite some time since these funds have been appropriated. Since then, the nation appears ready to put this pandemic to a merciful end. The notion that these funds that have yet to be dispersed will suddenly break free in the near future is fanciful at best. They can be used to minimize the impact to taxpayers and accomplish a bipartisan goal.
The Democrats, on the other hand, want to pay for the package with a series of tax hikes. As our nation exits the pandemic and lifts the lockdowns, economic activity will be key to recovery. Tax hikes that stifle businesses and discourage innovation are the exact opposite of what the country needs. Having been able to demonstrate the success of tax cuts and deregulation in recent years, these tax hikes can – and should – be a non-starter for Republicans. Yet, the administration paints any resistance to their destructive tax regime as stubbornness.
The negotiations on the infrastructure package are not as cut and dry as the political talking heads would have you believe. It is very complex. With arbitrary deadlines set by bureaucrats like Pete Buttigieg and a series of red lines by the administration and congressional leadership, hopes for a bipartisan triumph are growing slimmer by the day.
Unfortunately, the desire to act in a fiscally responsible manner is one that eludes many elected officials. With profligate spending and tax hikes abound, this infrastructure package is set to take these disturbing trends to all new heights…and depths.
Daniel Savickas is government affairs manager for the Taxpayers Protection Alliance.