Has Mick Jagger become Washington’s newest consultant? He currently has Washington D.C. singing his Rolling Stone magazine designated 100th greatest song of all time—”You can’t always get what you want, but if you try sometimes, you find, you get what you need”—with him.
On Wednesday, the heralded bipartisan group of Senators who have been negotiating the terms of a major infrastructure package since May, announced a deal had been reached…again. News of America’s first substantial infrastructure deal in nearly a century first broke nearly a month ago only to fizzle out in the following weeks.
But now, with the breakthrough Senate vote, the business community is on the cusp of a big win. At our CEO Summit this past month, 200 CEOs across nearly every industry, along with 65 mayors, were universally enthusiastic about such needed infrastructure funding. CEOs have signed petitions and spoken out with uncommon unity in support of just such Congressional action and the Biden Administration’s bipartisan efforts.
Senate Democrats and Republicans had originally agreed to the spending details in June, but disagreements soon arose over how the $1.2 trillion investment would be funded. And shortly thereafter, Republicans rescinded their support for a program that would have strengthened the effectiveness of tax-collection enforcement by the IRS, a critical piece of the puzzle to offsetting the costs of the infrastructure package. The agreement was already fraught with challenges through Republican demands for no new taxes and Democrat stipulations barring increased fees of any kind on low- and middle-income Americans.
However, once Republicans reneged on a more modern, powerful IRS, rumors of both parties attempting to re-trade the deal began to surface. Democrats sought more spending dedicated to mass transit, whereas Republicans preferred to funnel more money into highways. Other challenges were presented with a desire to meet federal wage requirements for all new spending on roads, bridges, broadband and other projects.
The prospects of a deal seemed to narrow further when Senate Majority Leader Chuck Schumer called for a cloture vote on Monday, a highly unpopular move among his Republican peers. Senator Schumer’s attempt to force the deal through a with an artificial deadline failed. Or did it?
Another $1.2 trillion infrastructure package was announced two days later by the bipartisan assembly. After reviewing the new deal terms, though, one might be left wondering what changed. Well, not much on the spending front. $10 billion less is going to public transit, and the furtive $20 billion infrastructure financing line item has disappeared from documents published so far.
The real differences surface under the spending pay-fors. $49 billion has been earmarked from delaying the Trump-era Medicare Part D rebate rule. An estimated $28 billion will come from applying information reporting requirements on cryptocurrencies for tax purposes. And $21 billion in fees will now be extended on government sponsored entities.
While a deal is nowhere near guaranteed, the recent progress is a positive sign. So with all of these changes and after beginning negotiations with President Biden’s $2.9 trillion proposal, who appears to have won the infrastructure negotiations battle?
By pulling the President’s ambitious $3 trillion down to a mere $1.2 trillion investment, it might be natural to say the GOP came out ahead. Furthermore, these infrastructure investments will not be funded by new taxes – just as the GOP insisted. Of the $1.7 trillion President Biden conceded, most of it was what we now term as “human” infrastructure—think affordable housing and community-based care for the elderly and disabled—but another $250 billion was lost towards climate-focused projects, a critical policy area to the Biden Administration and to his progressive colleagues in Congress.
Focusing on total spend does not tell the whole story, though. With the surviving climate-oriented elements, the United States is making a revolutionary +$155 billion investment into climate change and resiliency and green energy and technology. Securing investments into public safety, in the form of $55 billion for clean drinking water and waste water infrastructure, surprisingly ranked highest in importance on national public opinion, according to recent Morning Consult survey results.
In addition to the funds supplied from the American Rescue Plan Act, a further dedication of $65 billion for broadband expansion and access will not only continue to support our most underrepresented populations but also augment recent efforts to secure our global technological dominance. Even Biden’s determined investment in mass transit and railroads was revived in the compromise, despite lack of any GOP support and modest nationwide public support.
Moreover, if the new infrastructure deal passes, President Biden will be credited with accomplishing what has been an elusive aspiration of his recent predecessors—securing a once-in-a-generation, bipartisan infrastructure deal. The Democratic Party, too, with majorities in the House and Senate, will be sure to capture much of the recognition. In fact the support of 18 Republican senators is a direct rebuke to former President Trump who threatened any GOP leaders who support the infrastructure deal he himself failed to create.
Presuming the fine-tuning on physical infrastructure over the weekend does not go off the road—and a simultaneous budget resolution social infrastructure package is not a prerequisite—passage is assured. Such an achievement would bode well for Democrats in the upcoming mid-term elections and surely bolster their chances of maintaining a majority in both houses of Congress.
But that’s the politics. No matter who declares themselves the victor in this latest round of horse-trading, the real winner here—if an infrastructure bill ultimately makes its way through the House and into reality—would be business. And America. Finally.