With its razor thin Democratic majority, the Biden administration managed to get its crucial $1.9 trillion pandemic rescue package through the congress. Even some Republicans who voted against the bill are reminding their constituents of money that is flowing to them as a result of the bill. That lawmakers are able to gain favor from a bill that they voted against shows that many people pay more attention to what their representatives say than to what they actually do.
In contrast to the Pandemic Rescue Bill designed for short run economic recovery, Biden’s $2 trillion infrastructure bill is intended for longer run economic advancement, both through increasing employment and to promote greater efficiency for the entire economy.
In what was once considered “normal times,” infrastructure could be depended upon to garner bipartisan support. Republican and Democratic congressmen alike could remind their constituents that they “brought home the bacon,” with improved roads, new bridges, stuff of concrete and steel.
Most observers had predicted that Trump would early on propose a major infrastructure bill. He had campaigned on it, and dangled that possibility throughout his administration. But clearly, he considered the massive tax cut bill that rewarded big corporations, Republican donors, and the nation’s wealthiest citizens to be his singular priority.
There was nothing to prevent Trump from following that divisive and counterproductive tax bill with an infrastructure bill, but nothing was forthcoming. That forgone opportunity to claim victory with a bill that surely would have garnered bipartisan support proves that Trump was not the astute politician he claimed to be. So, in addition, he bumbles reaction to the coronavirus and, with that, blows a better than even chance for his reelection.
After Biden’s victory with the Pandemic Rescue Bill, he follows up with this gigantic infrastructure bill. But unlike past bipartisan support for infrastructure, Biden’s infrastructure bill faces a rocky road. Not only has Senate Minority Leader McConnell promised to fight it “tooth and nail,” with no Republican support, but unanimous Democratic support is unlikely in the bill’s present form.
Sometimes the simplest explanation for partisan opposition to a bill is the best. In this case, Republican lawmakers would refuse in any case to support it simply because its passage would mean a “Biden victory,” which they cannot tolerate.
However, in this case, there are other complicating factors. As the economy evolves and changes, so do publicly funded needs for an economy to operate at full capacity. Accordingly, this bill includes many items beyond the traditional “roads and bridges.” This pandemic has demonstrated the importance for employment and education to “bridge” the internet divide by providing broadband throughout the nation. School buildings need to be upgraded. For the nation to fully utilize the female portion of our nation’s talent and energy, women need to be assured of affordable child care, even as crucial child care workers need to be financially compensated. Our aging population will increasingly depend on elder care workers. Municipal water systems need to replace toxic lead pipes with safer plumbing.
The bill includes money for research. It is worth reminding that nearly every technical innovation of the 20th century was subsidized by the federal government.
These items necessary for the well-being of the nation and national economic efficiency go beyond traditional infrastructure. But they also give Republicans reason to oppose the bill. Instead of recognizing the real need for these items, Republicans characterize this bill as a “Democratic wish list,” insisting that this is not “real infrastructure.”
Surely, there is a strong case for these expenditures, whether they are characterized as “infrastructure,” or not.
A further reason Republicans give for opposition to the Infrastructure bill is its cost, and how it is to be financed. The Trump tax bill reduced the corporate tax rate from 25% to 21%. Biden proposes raising the corporate tax rate back up to 28%, still 7% lower than the pre-Trump rate. Republicans scream that this penalizes job-creators, all while they neglect the millions of jobs that the infrastructure bill would create.
There is absolutely no evidence that a 28% tax rate would damage corporations or the economy. As corporations will benefit greatly from the bill there is every reason why they should bear at least a portion of its costs.
Resistance to Biden’s proposed 28% corporate tax rate is endorsed by most Democrats, a major exception being West Virginia’s Senator Manchin. He has indicated preference for 25%. Biden has indicated willingness to negotiate. If the 25% rate would assure Manchin’s support, this would seem to be a reasonable compromise.
It is here that the politics become especially tricky. It would seem that the present form of the bill would be great for West Virginia, especially considering its low-income and aging population. But Manchin could as easily — perhaps more easily — be elected as a Republican. If he walks to the other side of the isle, Senator McConnell becomes the Majority Leader and it is game over for the Democrats. Like it or not, Manchin has an outsized influence on what happens next.
The same situation exists for the filibuster that requires sixty votes to pass a bill in the Senate, unless the filibuster is eliminated. So why not eliminate it, or use the reconciliation process as Democrats did with the Pandemic Rescue bill? Because Manchin, along with Arizona’s Senator Sinema at this point won’t go along with it.
Manchin insists that effort should be made to gain Republican support. There are two problems with that. First, the Republicans have thus far shown no sign that they are willing to seriously negotiate. Their usual strategy is to stall for time and run out the clock. Second, any Republican offer will be a low-ball offer of a few bridges and roads, omitting the many additional items urgently needed to bring America into the 21st century.
In such a bitterly divided congress, that may be the best we can get.
— John Waelti of Monroe, a retired professor of economics, can be reached at jjwaelti1@tds.net. His column appears Saturdays in the Monroe Times.
