News reports suggest that the Biden administration will soon release a massive infrastructure bill. Or maybe two bills. It might cost as much as $3 trillion, but we do not know over what period of time the money will be spent. There will be “pay fors,” such as granting the federal government the power to negotiate Medicare drug prices that will reduce spending, or perhaps tax increases on the rich, but we do not know how much of it will be “paid for.” (We do know the $1.9 trillion tax cuts in 2017 were not “paid for,” even though Republicans insisted the plan would pay for itself.)
What we also know is that President Biden will have two things going for him: the Federal Reserve chair’s positive outlook, and the discombobulated Republicans in Congress.
As for the Fed, The Post reports, “Testifying before the House Financial Services Committee on Tuesday, Federal Reserve Chair Jerome H. Powell and Treasury Secretary Janet Yellen told lawmakers that the economy is slated for booming growth this year.” However, they reminded the committee members that we are “at least” still missing 9.5 million jobs since the onset of the pandemic.
As for inflation — which Republicans seem to be rooting for as an excuse to nix an investment in infrastructure, which they are supposed to be favor of — Powell seems unconcerned. "Our best view is that . . . the effect on inflation will be neither particularly large nor persistent,” Powell said. “We’ve been living in a world of strong disinflationary pressures — around the world, really — for a quarter of a century, and we don’t that think a one-time surge in spending leading to temporary price increases would disrupt that.” In other words, Republicans will get no help from the disgraced former president’s choice to be Fed chair in opposing whatever bills Biden might put forward.
Speaking of Republicans, it is hard to fathom why they sound like they oppose something that is overwhelmingly popular. (If you think this sounds like a redux of their politically inane decision to fight the American Rescue Plan tooth and nail, you are not wrong.)
At times, their logic is baffling. One option for Biden is to split the bill in two, by seeking GOP support for the physical infrastructure bill to get to 60 votes and then coming back with a bill on the “caring workforce” (e.g., child care, universal pre-k, sick leave, community college).
But Republicans aren’t going to fall for that! Nope, if there are going to be two bills, they might just plan on nixing the popular infrastructure bill. Sens. John Thune (R-S.D.) and John Cornyn (R-Tex.) weighed in:
GOP pans splitting infrastructure package into two.— Igor Bobic (@igorbobic) March 23, 2021
“If the ploy is to lure Republicans to vote for the easy stuff and then do all the controversial stuff through reconciliation — I don’t think our guys take the bait,” Thune says
“It sounds like a boondoggle,” Cornyn adds
So they are going to vote against the overwhelmingly popular part and force Democrats to put everything into a single reconciliation bill? Democrats might shrug and say, “Fine.”
Thune insists splitting the bill in two parts is “a pretty cynical ploy to try and appeal to Republicans to vote for all that stuff, and then do reconciliation to do all the other hard stuff.” Umm, it sounds like they are inviting Republicans to participate where they agree. Isn’t that the essence of “bipartisanship” that Republicans have been whining about?
We have yet to see the details of whatever the Biden administration proposes. However, if Republicans are betting on an infrastructure bill possibly being less popular than the rescue plan, they might want to rethink their strategy.