US Finally Hits a Major Covid Milestone

Senate Majority Leader Chuck Schumer (D-NY) speaks to reporters at the U.S. Capitol in Washington
ELIZABETH FRANTZ
By Yuval Rosenberg

Happy Monday! How was your weekend? The
Senate had an unusually busy one, as lawmakers spent it finalizing
the text of the bipartisan infrastructure bill, which was filed
Sunday evening. Here’s what you need to know while still mourning
the U.S. women’s 1-0 loss to Canada in Olympic soccer.

What’s Next for the Bipartisan Infrastructure
Bill

Now that the text of the bipartisan infrastructure bill is out —
all
2,702 pages of it — the Senate will race to finish
consideration of the package this week ahead of a planned August
recess that could still be delayed.

Senate Majority Leader Chuck Schumer (D-NY) said Sunday night
that he expects the Senate to pass both the infrastructure bill and
a budget resolution for fiscal year 2022 before lawmakers leave
town. The budget resolution would set the stage for the next
portion of President Joe Biden’s economic agenda, a $3.5 trillion
package focused on caregiving, health care, education and climate
change.

"Let’s start voting on amendments," Schumer urged his colleagues
on Monday. "The longer it takes to finish the bill, the longer
we’ll be here.

The Senate started considering amendments on Monday afternoon,
but Senate Minority Leader Mitch McConnell (R-KY) said Monday that
Democrats shouldn’t set up an "artificial timeline" for the
amendment process. He called the infrastructure bill "a good and
important jumping-off point for what needs to be a robust and
bipartisan process" on the Senate floor. "Senators on both sides
expect and deserve opportunities to have a say and put their own
state’s imprints on this major bill," he said.

GOP senators are still waiting on the Congressional Budget
Office to score the legislation, which will provide an official
estimate of how much of the bill is paid for. Senate Minority Whip
John Thune (R-SD) reportedly
estimated that the score would find just over half
of the bill’s costs as being offset.

A number of senators are also expected to go to a funeral
service on Friday for former Sen. Mike Enzi (R-WY), who died last
week.

Putting $550 Billion in New Spending in Context

You’ll undoubtedly be hearing about the nearly $1 trillion
infrastructure package all week as the Senate pushes to pass the
bill — and for months to come as the House eventually takes up the
legislation and a related $3.5 trillion budget reconciliation
package.

While the bipartisan infrastructure legislation is historic and
undoubtedly large — like we said, more than 2,700 pages — it’s
worth putting the $550 billion in new spending in some context.

The new spending in the package is spread out over five years,
meaning it averages $110 billion a year. Even without those
additional outlays, the federal government is already projected to
spend $28.1 trillion over the next five years, according to
estimates released last month by the Congressional
Budget Office. (Mandatory spending — most notably on
programs including Social Security, Medicare and Medicaid —
accounts for more than $18 trillion of that total.) In other words,
the $550 billion in new spending represents an increase of less
than 2%.

Meanwhile, revenues over the next five years are projected to
total about $23.4 trillion, leaving cumulative deficits over that
time of more than $4.7 trillion. The Congressional Budget Office
hasn’t yet scored the new infrastructure bill, but we should find
out before long whether it sees the package as being fully paid
for, as negotiators say it is, or whether it will add to those
deficits.

Now let’s look at the reconciliation package, which Democrats
are currently targeting at $3.5 trillion in spending and tax
credits over 10 years, for an average of $350 billion a year.
Democrats have said that their budget package will be fully paid
for with tax increases and other revenue, but moderate Sens. Joe
Manchin (D-WV) and Kyrsten Sinema (D-AZ) have expressed concerns
about the size of the package and whether its cost will be fully
offset. They may still press for cuts or changes.

But just how massive would a $3.5 trillion package be? As of
last month, CBO projected total federal spending over the next
decade at $63.4 trillion, with annual outlays rising from $5.5
trillion to $7.8 trillion. The Democratic budget package thus
represents a 5.5% increase in spending, or a 6% increase if you
exclude the cost of interest. (Net interest payments on the debt
are projected to rise from $306 billion next year to $396 billion
in 2025 and $910 billion by 2031, meaning that they will eventually
dwarf the proposed new spending.)

Revenues over the next decade are projected to total $51.3
trillion, and deficits are expected to add up to a combined $12.1
trillion.

Amtrak Gets $66 Billion in Infrastructure Bill, and a New
Mission

The bipartisan infrastructure bill includes $66 billion in new
funding for Amtrak — and, as Madeleine Ngo of The New York Times

reports, it also proposes some changes to the
legal mission of the railroad service, which has lost money since
it was created in 1971:

"The bill includes new language that would change Amtrak’s
goal to ‘meet the intercity passenger rail needs of the United
States" rather than achieving ‘a performance level sufficient to
justify expending public money.’ It would also add language that
prioritizes service in rural areas in addition to urban
ones."

Jim Mathews, CEO of the Rail Passengers Association, tells
the Times that the change is "really significant" because it
signals "that we’re not trying to make Amtrak into a profit-making
venture" and instead are focused on delivering services needed by
taxpayers.

Treasury Expected to Scale Back New Debt
Sales

The federal response to the Covid-19 pandemic involved trillions
of dollars in unplanned spending, forcing a substantial increase in
debt issuance by the U.S. Treasury. Now that those programs are
winding down, analysts expect the Treasury to cut back on its sales
of notes and bonds, though the timing is still uncertain.

"Their financing needs will fall very sharply from 2021 into
2022," Bank of America’s Meghan Swiber
told Bloomberg News. "We think Treasury needs to
implement cuts sooner rather than later -- or it risks being
over-funded."

Analysts at JPMorgan Chase expect the Treasury to issue about $1
trillion less in notes and bonds in 2022 compared to this year.

That doesn’t mean, however, that debt will be smaller or that
deficits will disappear. "Our equilibrium end state -- say, after
August 2022 -- will still have the debt higher than before the
pandemic, with the recognition that deficits are going to be here
for a long time," John Briggs of Natwest Markets told
Bloomberg.

Numbers of the Day: US Finally Hits a Major Covid
Milestone

70%: The White House said Monday that the U.S. has
now reached President Biden’s goal of having 70% of the adult
population get at least one Covid-19 vaccination shot, though the
announcement comes about a month after the original target date of
July 4.

When Biden announced the goal in early May, the country
appeared to be on its way toward hitting the target, but a major
slowdown in vaccinations, driven in part by resistance among
supporters of former President Donald Trump, threw the effort off
track. With alarm bells now ringing over the more infectious Delta
variant of the virus, vaccination rates have picked up again in
recent days. The U.S. is now averaging about 660,000 vaccinations
per day — a big drop from the peak of over 3 million per day seen
in April, but above the 500,000 per day recorded on July
20.

$100 million: A coalition of Democratic groups
announced plans to spend nearly $100 million over the next six
weeks to build support for Biden’s domestic agenda and pressure
Congress to pass the infrastructure bill currently under debate in
the Senate, as well as the $3.5 trillion proposal focused on what
the White House refers to as human infrastructure.

The Biden administration will also be busy selling its
agenda during the usually quiet August recess, with presidential
surrogates traveling around the country in an effort to build
support. Vice President Kamala Harris and 14 cabinet secretaries
will hold dozens of events in at least 26 cities in the coming
weeks, the White House said. Biden himself plans to hit the road at
the end of the month, following a vacation in Delaware.

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