The unresolved issue that garnered the most DC press last week was the infrastructure bill package which is still in limbo as of this writing. It consists of two legislative bills; one a traditional infrastructure package which appears to have bipartisan support (at least in the Senate) and a larger “fix much of what is deficient in America while preparing it for the future bill”. I am of the school of thought that we should be concentrating on the content of the second bill and not its price tag. For the purposes of today’s discussion I will largely break that rule.
The size of the larger bill – which for the sake of discussion I will give the accurately descriptive name of the Build Back Better bill – started out in the six to seven trillion dollar neighborhood. Until this week the number most often assigned to it was $3.5 trillion. It now appears that a compromise is in the works that will bring the price tag into the $1.5 to $2.3 trillion range (and that is, in addition to being a huge range, a floating target). I’m going to combine the two bills on the very high side and call it $4 trillion knowing the sum will never reach that level but the figure is convenient to my argument while understating my case.
Other than being used as a political football, there is basically no controversy with the original bill which will come in at under $1 trillion. The rest of the cost is all in the Build Back Better bill.
The biggest glitch is in the Senate where the Republicans are simply being obstructionists set on making President Biden look as bad as possible regardless of who, very much including their own constituents, they hurt in the process. The reality is the people who will benefit the most under the Build Back Better bill are the most economically disadvantaged who disproportionately live in red states and vote Republican. The other stumbling block is Democratic Senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona. Manchin, unlike Sinema, loves the camera and press attention and is articulating his concern as financial. Let’s assume Sinema’s is similar.
Now for a recent history lesson (which will also expose Republican hypocrisy and lack of fiscal conservatism). When you combine the 2017 Trump Tower Tax Cut and the three rescue packages the price tag is in the $8 trillion neighborhood. Despite the claim of “economic genius” Texas Republican Senator John Cornyn, that tax cuts pay for themselves they do not. If you are foolish enough to point out that the third relief package was passed under Biden I will simply state that like the two before them they would not have been needed had Trump not bungled the pandemic so badly. The total price tag of the four programs was in the neighborhood of $8 trillion, all borrowed funds.
The Build Back Better plan (if not severely and strategically watered down) will largely be paid for by taxes – some raised, but mostly by enforcing the current tax codes. It is the last part that is actually causing the problems. It appears that most if not all of the Republican Senate caucus is on the “payroll” of the high earners and there are allegations that at least one of the two Democratic Senate holdouts may resemble that remark. Money in politics…need I say more?
Now let’s leave history/current events/civics class and go to arithmetic/economics class. The combined infrastructure bills (working number $4 trillion) are a combination of necessary – and mostly long overdue – maintenance and some much needed improvements/modernizations. One example of investment is in renewable energy. Auto manufacturers appear to see the future and are gearing up for electric vehicle production in the not that distant future. Those vehicles will need charging stations. The added bonus is that if handled prudently the production of that energy will be cleaner which will help the environment.
Generally speaking, we know that when the roof is leaking, the sooner we fix it, the cheaper it will be. If you tread water (i.e. bailout a stalled economy) in the long run you, at best, stay in place. If you swim (i.e. build back better) you have invested in the future and actually make progress. Under Trump and the accommodating/enabling Republicans we spent $8 trillion to basically get nowhere – some would argue fall behind. If we follow Biden’s plan we will spend $4 trillion to progress.
This one is for the arithmatically challenged Republicans like former Speaker Paul Ryan; 4 is less than 8, in fact half as much. It is really that simple!
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