GOP is being fooled by this infrastructure ‘deal’
24th June 2021

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Republicans negotiating a bipartisan infrastructure deal are walking into a trap set by Democrats.

President Biden has proposed $4 trillion in (loosely defined) infrastructure spending, and reached out to Senate Republicans to determine what they will accept as part of a bipartisan deal. Senate Republicans have reportedly agreed to $580 billion over the decade in more traditional infrastructure spending such as roads, bridges, transit, airports, electric power, and water infrastructure.

As part of the agreement, Republicans stripped out the non-infrastructure requests, such as nearly $1 trillion in corporate subsidies and $400 billion for long-term care. These Republicans can ensure the 60 votes necessary to pass the Senate without a filibuster.

However, there is a catch. Democrats are still allowed to pass at least one more reconciliation bill this year — a bill that cannot be filibustered and can therefore pass the Senate with only the 50 Democratic votes. Reconciliation bills are usually limited to one per year, but Democrats were allowed a second bill this year because last year’s Senate Republican majority did not pass one (and it is possible that a budget law technicality could allow additional reconciliation bills).

So what is to stop Senate Democrats from passing the rest of the $4 trillion infrastructure package themselves through reconciliation? Republicans provide bipartisan cover for the first $580 billion, even agreeing to new tax revenues, and then all the other taxes and extraneous spending that Republicans worked to strip from this package would simply be passed by Democrats in a party-line vote shortly thereafter.

In fact, Biden and Democrats are openly bragging about this bait-and-switch. House Speaker Nancy Pelosi announced that the House will not take up the Senate’s bipartisan infrastructure agreement until Senate Democrats also force through a partisan reconciliation bill with the trillions in additional spending that Republicans stripped out.

Shortly thereafter, Biden also demanded a reconciliation bill, declaring, “If this (bipartisan deal) is the only thing that comes to me, I’m not signing it.” Senate Budget Committee Chairman Bernie Sanders (I-Vt.) is reportedly drafting a staggering $6 trillion reconciliation bill — the most expensive bill in American history — filled with progressive wish lists in infrastructure, climate, and health care.

So then what is the point of Senate Republicans spending months negotiating this slimmed-down bill? With the promise of a follow-up reconciliation bill, they are merely giving bipartisan credibility to a process in which Democrats will ultimately retain a blank check for whatever they want.

The whole initiative is flawed. America’s infrastructure can certainly use some upgrades, but Washington is throwing money at infrastructure without reforming its status among the world’s most expensive, bureaucratic, and slowly built.

The Congressional Budget Office found that federal investments deliver returns averaging just 5 percent — compared to 10 percent for the private sector. The inflation-adjusted cost of interstate construction spending per mile quadrupled from 1960 through 1990, and has continued to grow since then.

Labor costs are higher in part because the Davis-Bacon Act raises wage costs by as much as 22 percent, and America requires many more workers to do the same building work as Europe. US subway systems are by far the most expensive to build in the world, and in New York City cost quadruple the world average.

The environmental impact statements required for large projects commonly exceed 1,000 pages and require on average seven years to complete (compared to no more than one to two years in Canada and 3.5 years in the European Union), and sometimes as long as 17 years. How about addressing these costs and delays and ensuring our tax dollars are spent effectively?

As for paying for infrastructure, Congress could repurpose the $350 billion it recently sent to state and local governments for budget deficits that no longer exist. Reducing discretionary spending by 1.5 percent this year would also free up $500 billion over the decade.

Conservatives should not return to the “Democrat-lite” days when they stood for growing the government and bureaucracy at a slightly slower rate than the Democrats. Nor should they accept a budget deal without an ironclad assurance that it will not be shredded before the ink is dry.

Brian Riedl is a senior fellow at the Manhattan Institute. Follow him on twitter @Brian_Riedl

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