But toward the end of the news conference announcing the Republican counteroffer, Capito made the comment above. She added, “When you hear the $115 billion [Biden is] dedicating to roads, that’s in addition. So we are going to have to square the figures for you better.”
Long ago, The Fact Checker used to be a federal budget reporter. From experience, we learned that the numbers announced at news conferences often needed to be scrubbed carefully. Capito’s reference to “baseline-plus” made our ears perk up a bit.
That’s because the battle lines are often drawn over the baseline. Usually, the baseline records what would happen if nothing is changed and current policies remain the same. But when you are comparing two proposals, you have to make sure they are operating off the same baseline. Otherwise, ordinary Americans can get the wrong impression.
In an interview Sunday on CNN’s “State of the Union,” Capito said: “We really narrowed the focus on infrastructure to really look at physical infrastructure, roads, bridges, rail, airports, water systems. The president’s bill, the $2.2 trillion, goes far afield from that. So, where I think the first starting point we need to have is, let’s do an apples-to-apples comparison of the physical infrastructure, core infrastructure of his plan with how it matches up with what we have put forward.”
Challenge taken. Here’s what we came up with.
The key to understanding the differences between any spending proposal is measuring it off an agreed baseline.
A “current services” baseline generally is designed to measure the impact of policy changes in government spending and taxes vs. current policies. The baseline records what would happen if nothing is changed and current policies remain the same.
But that’s not the same as simply believing that the dollars spent or raised remain the same. Inflation and population growth over time raises the cost of programs, while a growing economy will result in more taxes being collected. If you earned the same salary year after year, eventually you would feel pinched as costs for groceries and housing rise.
Here’s our favorite example of this phenomenon: Defense spending technically remained constant from 1987 to 1994 — $282 billion a year. But look what happened to the military during those seven years: The number of troops decreased from 2.2 million to 1.6 million, the number of Army divisions was reduced from 28 to 20, Air Force fighter wings dropped from 36 to 22 and Navy fighting ships declined from 568 to 387. That’s because inflation over time ate away at the value of those dollars. By most measures, defense spending was trimmed in that period, although in theory, not a penny was cut.
During the budget wars of the mid-1990s, which resulted in two government shutdowns, Democrats and Republicans frequently operated with different baselines. Bill Clinton at one point claimed credit for proposing to cut $144 billion over five years, which sounded a lot bigger than the GOP’s $100 billion cut. But Clinton’s cuts were off an inflation-adjusted baseline, while the GOP’s plan was not.
Using the same baseline, the GOP-proposed cut was $190 billion, much larger than Clinton’s proposal. (This example comes from an article written almost exactly 26 years ago.)
We seem to have the opposite phenomenon in the case of the dueling infrastructure proposals. The GOP wants its spending to look bigger, so as Capito indicated, it appears to include existing spending plans. Biden’s plan, by contrast, would largely be on top of the existing spending (though, to be frank, it’s possible that the administration is playing some of its own games with the baseline numbers).
There are some hints of this in the two-page document the GOP senators supplied to reporters. It notes that $65 billion proposed for broadband would be “additional spending.” That indicates that the other numbers are mostly including current spending.
One caveat: Biden’s transportation numbers reflect five years of budget authority but the outlays would generally take eight years to spend. So keep that in mind as we go through the numbers.
The category for “roads and bridges” is a good example of the impact of the baseline. The GOP plan shows a line-item of $299 billion, which certainly looks bigger than Biden’s $115 billion. To her credit, Capito indicated that the numbers were not comparable. That’s because the Congressional Budget Office baseline spending on roads and bridges — various Federal Highway Administration accounts — for the next five years appears to be about $260 billion.
That means the GOP is proposing to spend an additional $39 billion, or 15 percent, on highway funds. That’s the right number to compare to Biden’s $115 billion — which is a 44 percent increase over the current spending path.
(Note: Technically, highway and mass transit contract authority from the Highway Trust Fund is not supposed to get an inflation bump in the annual baselines. But the last two highway acts used inflated numbers so it seems make sense to operate on that basis. Without inflation, the baseline spending over five years would be $235.5 billion.)
Public transit, which in the GOP document is listed as a $61 billion spending item, actually appears to be a cut from the current baseline — of more than 10 percent. By contrast, Biden would boost spending 125 percent, to $154 billion. That’s a good example of the divide between blue and red America over the need to increase spending on mass transit. (Note: a case could be made that the baseline spending is $51 billion, if you do not include an inflation bump, so the GOP proposal would represent a slight increase. But it would still be much less than the Biden proposal.)
On the other hand, on airports, the GOP would add $25 billion to an existing five-year baseline of nearly $20 billion — essentially equal to Biden’s proposal and possibly higher.
In all, it looks like the GOP plan would add $189 billion to the baseline of current spending, compared to Biden’s $785 billion for the same line items. (A variety of items in Biden’s overall plan are not addressed in the GOP version, especially in green energy areas.)
Below is a rough breakdown of how the proposals appear to compare, in billions of dollars. The baseline increase in spending is derived from CBO documents on highway trust funding and other programs; we include some spending comparisons that are not part of that baseline spending as well. We were guided in some of our thinking by a client email written by Jeff Davis, senior fellow of the Eno Center for Transportation, obtained from a source, but of course he’s not responsible for the final result. We also sought input from congressional sources.
“Several of us have been told on background by Senate GOP people that all of the money except broadband (where there isn’t really an ongoing federal program to duplicate) is inclusive of baseline,” Davis told The Fact Checker.
Davis added that “I am hesitant to compare the Biden plan to the 5-year baseline, in part because in several areas it is so much money that there is no way that it can come close to be even begun to be spent over 5 years.” He pointed especially to Biden’s proposals to spend $25 billion to replace 50,000 diesel mass transit buses with electric buses as well as proposed spending for intercity rail, new subways and light rail.
As we noted, there is a dispute over whether to include an inflation jump to the baseline for the highway and transit funding. Technically it does not exist so one congressional aide said it should not be included. But Davis argues that inflation should be part of the baseline because recent bills were allowed to use inflated figures. (As we keep saying, it all depends on the baseline.)
(Note: if the embedded list of the numbers does not appear, such as on a mobile device, follow this link to see it.)
The Bottom Line
Reporters need to be careful when citing the numbers offered at news conferences. Capito clearly offered hints during her presentation that care must be taken when comparing the Senate GOP proposal and Biden’s plan.
Under these calculations, it looks as though, for the same line items and a similar baseline, the Senate GOP would propose spending an additional $189 billion, not $568 billion. Biden, by contrast, proposes to spend an additional $785 billion (or almost $1.2 trillion if you want to compare to the $568 billion figure touted by the Senate GOP).
If one does not include inflation in the highway and transit baselines, then you could say the GOP is proposing to spend about $242 billion more on infrastructure.
Either way, that would be much less than would be apparent from the initial news coverage.
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