Infrastructure Talks Headed for a Crack-Up?

Infrastructure Talks Headed for a Crack-Up?

Printer-friendly version
Plus, conservatives say no to Biden’s IRS boost
Monday, May 24, 2021
 

Infrastructure Talks Headed for a Crack-Up?

The nation’s infrastructure is crumbling and so are the Washington talks about fixing it.

CNN’s Phil Mattingly and Lauren Fox report that the talks are “on the brink of falling apart completely” after Republicans balked at a scaled-back proposal that Biden’s negotiators submitted on Friday, with a price tag of $1.7 trillion, down from an original $2.25 trillion. Republicans said that the offer was still too large to pass on a bipartisan basis and they criticized some of the White House changes as accounting gimmicks.

Transportation Secretary Pete Buttigieg told CNN on Monday that the two sides have moved closer, but “there is still a lot of daylight between us.” The two sides are more than a trillion dollars apart, don’t agree on how to pay for whatever they spend — and they still can’t even settle on a definition of infrastructure.

“We, Republicans, tend to define infrastructure in terms of roads, bridges, seaports and airports and broadband. The Democratic definition seems to include social programs that have never been considered part of core infrastructure,” Sen. Susan Collins (R-ME) told ABC’s “This Week” on Sunday. “I was glad that the president put a counteroffer on the table, but if you look closely at it, what he's proposing to do is move a lot of the spending to a bill that's already on the Senate floor, the Endless Frontier's bill.”

So, yeah, a lot of daylight.

The White House proposal reduced the amount requested for roads, bridges and physical infrastructure projects from $159 billion to $120 billion, still well above the $48 billion Republicans had proposed. It also cut funding for broadband to the GOP’s proposed level of $65 billion and proposed shifting investments in research and development, supply chains and manufacturing to other legislation, as Collins mentioned.

The Biden administration also said that the Republican offer was no more than $225 billion “above current levels Congress has traditionally funded” and laid out nine areas Republicans would need to include or spend more on, including $400 billion to support caregivers and home health workers. And it still sought to pay for the new spending via tax increases, which Republicans have called a nonstarter.

What’s next: White House Press Secretary Jen Psaki said Monday that the ball was now in the GOP’s court. “We’re eager to see their proposal and see what they have to offer,” she said, “and I think it doesn’t take anything more than simple math to note that if we came down by $550 billion and they came up by $50 billion, they have a ways more to go.”

The White House reportedly isn’t certain that Republicans will make a counteroffer but hopes to have a meeting as soon as Wednesday if one does come.

Biden’s Memorial Day deadline is likely to pass without any deal, or major progress toward one. The talks could continue, but that may depend on what happens this week. "He wants a deal. He wants it soon, but if there's meaningful negotiations taking place in a bipartisan manner, he's willing to let that play out," Cedric Richmond, a White House senior adviser, told CNN, referring to Biden, on Sunday. "But again, he will not let inaction be the answer. And when he gets to the point where it looks like that is inevitable, you'll see him change course."

Some Democratic lawmakers continue to press the White House to move ahead without Republicans. Doing so would require Biden to have the support of almost every House Democrat and all 50 Senate Democrats.

Conservatives Take Aim at Biden Plan to Bolster IRS

Conservative political groups are launching public relations campaigns to oppose President Biden’s call for a revitalization of the IRS and the tax hikes that would help fund it, Politico’s Anita Kumar reports.

The newly formed Coalition to Protect American Workers, run by Vice President Mike Pence’s former chief of staff, Marc Short, is producing TV ads and social media messaging critical of Biden’s plan to expand the IRS by 87,000 workers over the next decade, with the goal of cracking down on tax cheats.

One TV ad attempts to play on fears of an expanded tax agency. “If Joe Biden gets his way, they are coming: IRS agents,” a voiceover says, according to Politico. “Biden's massive tax increase plan includes a staggering $80 billion to help recruit an army of IRS agents.”

Another anti-tax group, Americans for Tax Reform, is saying that Biden’s plan for the IRS will simply increase union dues paid by IRS workers, while Heritage Action for America is repeating its call for a simpler tax code that requires less enforcement.

The White House, though, continues to push for Biden’s plan, citing poll data that shows broad support among the public for tax increases on the rich and for efforts by the IRS to crack down on cheaters. “A massive, bipartisan, majority of the American people support making the richest Americans and biggest corporations pay the taxes they owe — without increasing the rate of audits on any people or small business owners earning less than $400,000 a year — so we can use that money to invest in the middle class,” White House spokesperson Mike Gwin told Politico. “A few special interest-funded ads won’t change that fact or a single mind.”

Number of the Day: $634 Billion

Maintaining America’s nuclear arsenal will cost $634 billion over 10 years, according to a report published Monday by the Congressional Budget Office. The projected cost is $140 billion, or 28%, higher that CBO’s previous estimate, which covered 2019-2028. About half of the increase is the result of the timeframe shifting to include “two later (and more expensive) years of development in nuclear modernization programs,” CBO said.

The estimate includes $83 billion in projected cost overruns, based on rates that costs for similar programs have grown in the past, CBO said.

The Hill’s Rebecca Kheel notes that the United States is in the midst of plans to modernize all three legs of the nuclear triad — air, sea and land — that the Government Accountability Office has projected could cost $1.7 trillion over 30 years.

Biden Doubles Funding to Prepare for Extreme Weather

President Biden announced Monday that he will increase federal spending for extreme weather preparation by $500 million, doubling the budget of the Building Resilient Infrastructure and Communities program to $1 billion.

The program helps communities prepare for natural disasters, including hurricanes and wildfires.

Biden also said that he had directed NASA to collect more detailed information on weather patterns.

“We’re going to spare no expense, no effort to keep Americans safe and respond to crises when they arise, and they certainly will,” Biden said. “Now is the time to get ready for the busiest time of the year for disasters in America. Hurricane season in the South and East, and the fire season out West.”

A major reversal: Biden’s move signals a significant change in attitude toward climate change at the federal level. Former President Donald Trump expressed doubts about global warming and questioned the validity of climate science.

But the science of global warming has become increasingly clear, as has the cost of extreme weather events associated with it. According to the National Oceanic and Atmospheric Administration, the U.S. saw a record number of billion-dollar disasters last year, with 22 events causing $95 billion worth of damage.

Former Federal Emergency Management Agency chief Brock Long told The Washington Post that Biden’s increase in funding for preparation was a good first step, but the problem is enormous.

“We’re stuck in this unsustainable disaster-recovery cycle. We’re putting out massive amounts of money to help communities recover, instead of preparing for disasters,” Long said. “While I applaud the increase in funding, providing $1 billion to mitigating our nation’s infrastructure is just scratching the surface.”

23 States Cutting Off Enhanced Unemployment Benefits Early

Florida is the 23rd state to announce that it is ending the $300 per week boost to unemployment benefits provided by the federal government. The payments will end on June 26, about 10 weeks before the program is set to expire at the federal level, the state said Monday.

All 23 states withdrawing from the program are led by Republican governors, who say that the extra payments are responsible for slow employment growth in their states by making it easier for unemployed workers to turn down or avoid getting new jobs, resulting in a labor shortage, especially in low-wage sectors.

“Transitioning away from this benefit will help meet the demands of small and large businesses who are ready to hire and expand their workforce,” Dane Eagle, secretary of Florida’s Department of Economic Opportunity, said.

However, many labor experts say the enhanced unemployment benefits play only a limited role in the disappointing job growth in recent weeks, while citing a host of other factors including severe job market dislocation, fears of illness and unresolved child care issues.

Florida’s announcement leaves just four states led by Republican governors – Maryland, Massachusetts, Nebraska and Vermont – to retain the program.

All told, about 4 million people will be affected by the states’ decisions to end the program prematurely in June. According to data from the Century Foundation, the collective loss of benefits in the 23 states will come to roughly $27.3 billion.

Send your feedback to yrosenberg@thefiscaltimes.com. And please tell your friends they can sign up here for their own copy of this newsletter.

News
Views and Analysis