Biden's Spending Plan Faces a Major Snag

U.S. President Biden signs the Infrastructure Investment and Jobs Act at the White House in Washington
JONATHAN ERNST
By Yuval Rosenberg

Congress is back, and it’s going to be
busy. A bipartisan group of lawmakers joined President
Joe Biden as he signed the $1.2 trillion infrastructure bill Monday
afternoon. Biden and Democrats hope to be able to host another
celebratory signing ceremony before long, but their Build Back
Better package faces a number of hurdles — potentially including
some new ones from the Congressional Budget Office.

Here’s a look at today’s win for Biden and what’s
ahead.

Biden Signs Bipartisan Infrastructure Bill, Celebrates a
Much-Needed Win

Following months of delays and legislative maneuvering,
President Joe Biden signed the $1.2 trillion bipartisan
infrastructure bill into law Monday, notching a significant
political victory amid slumping polls and an uncertain future for
other elements of his agenda.

“For too long, we’ve talked about having the best economy
in the world,” Biden said in his prepared remarks. “We’ve talked
about asserting American leadership in the world with the best and
safest roads, railways, ports, and airports. Here in Washington,
we’ve heard countless speeches, promises, and white papers from the
experts. But today, we are finally getting it done.”

The Infrastructure Investment and Jobs Act, which passed
the Senate in August and the House earlier this month, allocates
roughly $1.2 trillion over 10 years for a wide variety of
infrastructure projects. About $550 billion of that total is new
spending, with the rest representing a renewal of expected
funding.

The new spending is divided into $284 billion for surface
transportation — which includes roads and bridges, rail, airports,
ports, public transit and electric vehicles — and $266 billion for
core infrastructure, which includes the power grid, broadband
services, water systems and environmental resiliency. Some
highlights:

* $73 billion to upgrade the nation’s electrical
grid;

* $66 to improve Amtrak rail service;

* $65 billion for broadband internet service, with an
emphasis on access in rural areas;

* $47 billion to improve resistance to fires, hurricanes
and floods;

* $21 billion for environmental clean-up projects overseen
by the Environmental Protection Agency;

* $15 billion to remove lead pipes;

* $7.5 billion for electric vehicle
infrastructure.

Some of the spending will be offset by revenue sources,
including $200 billion in unused Covid-19 relief spending and about
$50 billion in unemployment benefit funds returned by the states,
but the offsets will not cover the full cost. According to the
Congressional Budget Office, the infrastructure package will add
$256 billion to the federal deficit over the next 10
years.

A bipartisan effort: Lawmakers from both parties
attended the signing ceremony on the White House lawn, including
key negotiators Sens. Kyrsten Sinema (D-AZ) and Rob Portman (R-OH),
and the president said that the passage of the bill is “proof that
despite the cynics, Democrats and Republicans can come together and
deliver results.”

Still, the votes on the bills were lopsided, with all but
a handful of Democrats voting yes and the majority of Republicans
voting no. In the Senate, 19 of 50 Republicans supported the bill,
while just 13 out of 213 Republicans in the House did so — and they
have since faced a backlash for their bipartisan
cooperation.

Most Republican supporters of the legislation did not
attend the signing ceremony, including Senate Minority Leader Mitch
McConnell (R-KY).

Bipartisan support weakening: While the White House
is hoping to win some political points from the long-awaited
signing of the infrastructure bill, support for the effort appears
to be slipping among voters. In August, 58% of respondents in a
Morning Consult poll said they support the bill, but by last week
that number had dropped to 50%. While support among Democrats has
remained steady at about 80%, approval among Republicans fell from
40% to 22%.

Supervisor named: The White House said Sunday the
former New Orleans Mayor Mitch Landrieu will oversee the
implementation of the infrastructure bill. “In this role, Landrieu
will oversee the most significant and comprehensive investments in
American infrastructure in generations,” Biden said in a
statement.

Landrieu, who also served as lieutenant governor of
Louisiana, will be a senior White House adviser, working through
the National Economic Council to coordinate the infrastructure
spending. According to The Wall Street Journal, Landrieu was chosen
in part for his experience in helping to rebuild New Orleans after
Hurricane Katrina devastated the city in 2005.

Dems' $1.85 Trillion Spending Plan Faces New CBO
Stumbling Block

House Democrats are racing toward a vote on their Build
Back Better package of social spending, climate programs and tax
changes this week — though their race has been less like a sprint
and more like a marathon run through a maze. Now, as they near what
they hope is the finish line, their path to the tape still depends
on — and could be complicated by —an official cost estimate of the
legislation from the Congressional Budget Office.

Lawmakers have another recess planned for Thanksgiving
week, so Democrats hope to be able to vote on BBB before then.
They’re still waiting on the full CBO analysis of the legislation,
though. The nonpartisan scorekeeper said Monday that it anticipates
publishing its complete estimate by the end of the day on Friday —
a timeframe that could push any House vote into the weekend or next
week.

A stumbling block from CBO: The nonpartisan
scorekeeper, which has been releasing portions of its BBB analysis,
may have already added another hurdle for Democrats, though. Their
plan to fully pay for proposed new spending relies on spending $80
billion over a decade to beef up Internal Revenue Service
enforcement and crack down on high-earning tax dodgers, an
investment that the administration has projected could raise some
$400 billion in revenue over a decade. The CBO analysis of that
plan was always expected to come up well short of the
administration’s revenue projection, and CBO Director Phillip
Swagel reportedly said Monday that the IRS plan would generate far
less — about $120 billion over 10 years.

That lower estimate could give fiscal conservatives in
both the House and Senate pause about backing BBB, though the White
House is reportedly already trying to make the case that its own
projections are more accurate.

“The White House has begun bracing lawmakers for a
disappointing estimate from the budget office, which is likely to
find that the cost of the overall package will not be fully paid
for with new tax revenue over the coming decade,” Alan Rappeport of
The New York Times
reports. “Senior administration officials are
urging lawmakers to disregard the budget office assessment, saying
it is being overly conservative in its calculations, failing to
properly credit the return on investment of additional I.R.S.
resources and overlooking the deterrent effects that a more
aggressive tax collection agency would have on tax
cheats.”

As Rappeport indicates, the markedly different projections
result from different assumptions in modeling out how the
stepped-up enforcement would play out over time: “On Monday, Mr.
Swagel suggested that the Biden administration was betting too
heavily on the idea that more aggressive auditing would deter rich
people and corporations from finding ways to avoid paying taxes. He
said such groups could take even more aggressive measures to keep
their tax bills low, making it harder for the federal government to
collect as much tax revenue as anticipates through better
enforcement of the tax code.”

Ben Harris, Treasury’s assistant secretary for economic
policy, told the Times that it was “patently absurd” that
strengthening IRS enforcement wouldn’t result in greater
compliance. The Treasury also expects that greater compliance to be
sustained at higher levels over time than CBO does.

The bottom line: House moderates who insisted on
seeing a CBO score before voting on the Build Back Better bill have
pledged to work toward passage even if the official cost estimate
diverges from the White House’s numbers, but the budget office’s
analysis of the IRS plan could send at least some Democrats
searching for other revenue — and CBO’s timeframe for completing
its full estimate likely means lawmakers are in for a long week
ahead. If or when the House does pass the bill, it will almost
certainly have to take up the package again within weeks after the
Senate sends back its own version.

The Rest of Congress’s Year-End To-Do
List

While the Senate waits for BBB to come over from the
House, it will take up the National Defense Authorization Act, the
massive annual defense bill, this week. And the clock is ticking
toward December 3, when government funding is set to expire. Senate
Majority Leader Chuck Schumer (D-NY) said in a letter to colleagues
Sunday that lawmakers will likely need to pass another short-term
extension of funding to avoid a shutdown in less than three
weeks.

Congress will also have to raise or suspend the debt
ceiling again — though it remains unclear how Democrats plan to do
that in the face of Republican’s renewed insistence that they will
not help raise the borrowing limit again. The infrastructure bill
Biden signed on Monday may speed the need for another hike. It
directs the Treasury Department to put $118 billion into the
Highway Trust Fund, which could move up the projected “X date” when
the Treasury is no longer able to pay its bills. That date,
according to the Bipartisan Policy Center, could be as soon as
mid-December or as late and mid-February.

It all will make for something of a mad scramble. “Keep
your schedule flexible for the remainder of the calendar year,"
Schumer wrote in his letter. "I am confident we can get each of
these important items done this year, but it will likely take some
long nights and weekends."

Support for Biden Hits a New Low: Poll

Though the White House is hoping for a big boost as the
infrastructure package becomes law, a new poll shows that public
support for President Biden continues to drop.

The
Washington Post-ABC News poll of 1,001 adults
found only 41% of respondents expressing approval of the Biden
presidency, a decline from a peak of 52% in the spring — and the
poll was conducted after the House passed the infrastructure
bill.

Much of the drop in support seems to be driven by economic
conditions, especially inflation, and Democrats’ months-long
failure to pass two pieces of legislation that make up much of
Biden’s agenda. Seventy percent of respondents rated the economy
negatively, and more than 60% said that Biden hadn’t accomplished
enough in his time in office.

In an ominous sign for Democrats, 51% of voters said they
planned to vote for a Republican in the midterms.

“Overall, the survey offers a set of harsh judgments about
the president’s performance and the state of the economy,” The
Washington Post’s Dan Balz, Scott Clement and Emily Guskin report.
“Together, they send a stark warning to Democrats about their
prospects in the 2022 midterm contests.”

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