Congress Inching Toward Infrastructure Deal

President Joe Biden reached a tentative deal in late June with a bipartisan group of 10 Senators to spend $1.2 trillion over eight years on a traditional infrastructure package that would fund improvements to roads, bridges, ports, inland waterways, transit, airports and enhance services for broadband, water and electric vehicles.

The agreement would provide nearly $600 billion in new federal spending, which when added to the existing transportation bill, totals $1.2 trillion. The new funds will include $360 billion for roads, bridges and major projects: $48.5 billion for public transit, $66 billion for rail, $55 billion for water infrastructure, $65 billion for broadband and $73 billion for power infrastructure. In addition, it would spend $47.2 billion on climate resiliency, $25 billion for airports, $10 billion on electric buses and $16 billion for ports and inland waterways. 

An infrastructure package would appear to be an easy lift for lawmakers from both parties. The nation's crumbling infrastructure, after years of neglect, is in desperate need of repair and upgrade. Unfortunately, despite considerable optimism, it remains unclear whether the infrastructure bill can be passed and signed into law. 

Some aspects, including funds for mass transit, remain major stumbling blocks. More importantly, lawmakers continue to battle over the most difficult question of all: How to pay for it? Thus far, Republicans have refused to raise any corporate or individual taxes, and the White House has declined to impose user fees on the improved highways and rails.

Without these reliable sources of funding, the bipartisan group of Senators, which has now grown from 10 to 22, is searching for “offsets” from other programs across the federal government to fund the agreement.  While nothing is yet final, the list is said to include repurposed pandemic relief funds, revenue from new public-private partnerships, proceeds from 5G spectrum auctions and savings from crackdowns on tax evasion and unemployment insurance fraud.

Whatever agreement is finally reached, economists are skeptical that the offsets will amount to more than the usual “fuzzy math” for which Washington is famous. They suspect that the plan will end up being primarily funded with more deficit spending. 

Even if the package does reach President Biden’s desk, few in Washington expect it to signal a return to an era of bipartisan cooperation. As Amy Walter of the Cook Political Report recently noted, an infrastructure package is likely to be the last major initiative enacted with bipartisan support before the 2022 midterm elections.