Thirteen ways of looking at a bipartisan infrastructure deal

Thirteen ways of looking at a bipartisan infrastructure deal

By Matthew Yglesias, June 25, 2021.

A clear path to a successful 117th Congress is emerging

A bipartisan group of senators, working with the Biden White House, agreed yesterday on a broad framework for an infrastructure bill including hundreds of billions of dollars in new spending allocated across various budgets and a mix of fiscal offsets that everyone could agree on.

There honestly aren’t enough details here for me to do the kind of deep dive into what it actually means for transportation policy that I would like to. It’s a framework, it’s not a legislative text or even really an outline of a bill.

But I do think this is the kind of thing where the takes can kind of skip ahead too closely to the details and miss the forest for the trees. Here’s thirteen slightly scattered observations — but what I think it leads up to is that we’re now seeing a clear path toward a very successful 117th Congress that could get a lot done for the American people. But even though we can now see what that path looks like, it’s still a fairly treacherous trail.

Context for the infrastructure deal: As of November 1, 2020 progressives were looking at polls that told them to expect 55-56 senate seats and an expanded House majority. Their legislative goals were adding states, ending gerrymandering, possibly packing the Supreme Court, and enacting the most sweeping progressive legislative agenda in American history. Once the actual numbers come in and it’s a 50-50 senate and a six-seat House majority everything is bound to disappoint.

Context for the infrastructure deal: This package is almost as big as Obama’s American Recovery and Reinvestment Act, and in terms of fresh spending on infrastructure it’s bigger than ARRA and that’s coming after the much larger American Rescue Plan already took place.

Context for the infrastructure deal: Biden said he would make old-school legislating work again. USICA (née endless frontier) passed the senate through regular order. We’ve done feel-good bills on Juneteenth and hate crimes. Tim Scott and Karen bass say they have a deal on police reform. They did this water bill nobody cares about. These are singles or doubles, not home runs, but the impact exists in the aggregate.

Context for the infrastructure deal: Stuff in a reconciliation package basically has to be paid for with tax increases, but since Democrats need unanimity to pass partisan bills it’s inherently challenging to get all of Biden’s tax ideas enacted. In the bipartisan bill, congress is agreeing to roughly $1 trillion in new spending without using up any of Biden’s tax hike proposals so those revenue-raisers are now avaiable for the reconciliation package.

Reconciliation linkage: A lot is being made of progressive sour grapes about how they don’t want to agree to this deal unless they are guaranteed a later reconciliation package with more partisan ideas. I think the real linkage goes the other way — Joe Manchin and Kyrsten Sinema (and quietly the dozen other senate Dems who kinda agree with them) now get to say that bipartisan legislating is happening, and it’s happening thanks to them. They are now open to a reconciliation bill on its own terms.

Personally, I am not that jazzed up about the idea of spending a bunch of money on infrastructure so I am not per se throwing a party over this bill.

But if you accept the premise that we should be doing an infrastructure bill and not just redefining various things as “infrastrcucture” then this is a good bill. Notably the highway/transit split at 2/1 is very favorable to transit in historical terms. A lot of the money, appropriately, goes to electrical grid, water, resilience, and broadband rather than transportation. Doing this as a non-reconciliation bill also lets it include policy measures (around emissions standards, road safety requirements, etc.) that might not fly with the parliamentarian.

There’s $15 billion for EV charging and bus electrification and I think it’s good to see that stuff in the bipartisan bill since turning electrification into a culture war food fight could be very harmful.

House Democrats’ bad ideas about freight rail are not in the package, but instead there is $66 billion in fresh money for freight and passenger rail upgrades.

If you know me, you know there are a lot of policy questions about how transportation money gets spent. The deal that was announced does not address any reforms in that regard. But the negotiators do have ideas on these fronts, and there is desire on both sides to incorporate some as the deal gets fleshed out. This is a broad framework and not a legislative text, so the answer to a lot of specific questions is TBD.

The very best and most important ideas that Biden has put forward in his administration — housing reform, clean energy R&D and deployment money, and the expanded Child Tax Credit — have all been deferred to a reconciliation bill. As I said in (5), I think that’s a win not a loss. This deal coming together makes it easier not harder to do a reconciliation bill.

In the reconciliation process, prioritization is going to matter. Moderate Democrats are unreasonably leery of taxing the rich. There will be money to work with, but not the full amount called for in Biden’s Jobs Plan and Families Plan. But that means some of Biden’s ideas will make the cut and some won’t. That’s why I’m laying down the market here — expanded CTC, clean energy, and housing are the most important bits. Whatever you can get of the other stuff is good, but those three are the most important.

This whole thing could still fall apart! The painstaking negotiations were driven by the perceived political needs of moderate Senate Democrats, who wanted to make a deal with Senate Republicans. But Democrats’ House majority is very thin and it’s not clear that bipartisanship in the Senate will carry over into votes from House Republicans. I don’t think anyone on either side of the aisle in the House is thrilled about having been cut out of these talks. Watch what happens there!