Mon | May 29, 2023

Biden announces infrastructure agreement

Published:Friday | June 25, 2021 | 12:13 AM
President Joe Biden (in front) walks out of the White House with senators to speak on Thursday, June 24, in Washington.
President Joe Biden (in front) walks out of the White House with senators to speak on Thursday, June 24, in Washington.

United States President Joe Biden announced on Thursday a hard-earned bipartisan agreement on a pared-down infrastructure plan that would make a start on his top legislative priority and validate his efforts to reach across the political aisle. He openly acknowledged that Democrats will likely have to tackle much of the rest on their own.

The bill’s price tag at US$973 billion over five years, or US$1.2 trillion over eight years, is a scaled-back but still significant piece of Biden’s broader proposals.

It includes more than a half-trillion dollars in new spending and could open the door to the president’s more sweeping US$4-trillion proposals later on.

“When we can find common ground, working across party lines, that is what I will seek to do,” said Biden, who deemed the deal “a true bipartisan effort, breaking the ice that too often has kept us frozen in place”.

The president stressed that “neither side got everything they wanted in this deal; that’s what it means to compromise,” and said that other White House priorities would be tackled separately in a congressional budget process known as reconciliation.

He made clear that the two items would be done “in tandem” and that he would not sign the bipartisan deal without the other, bigger piece. Progressive members of Congress declared they would hold to the same approach.

“This reminds me of the days when we used to get an awful lot done up in the United States Congress,” said Biden, a former Delaware senator, putting his hand on the shoulder of a stoic-looking Republican Senator Rob Portman as the president made a surprise appearance with a bipartisan group of senators to announce the deal outside the White House.

The deal was struck after months of partisan rancour that has consumed Washington, while Biden has insisted that something could be done despite scepticism from many in his own party. Led by Republican Portman of Ohio and Democrat Kyrsten Sinema of Arizona, the group included some of the more independent lawmakers in the Senate, some known for bucking their parties.

“You know there are many who say bipartisanship is dead in Washington,” said Sinema, “We can use bipartisanship to solve these challenges.”

And Senator Susan Collins, R-Maine, said, “It sends an important message to the world as well that America can function, can get things done.”

The proposal includes both new and existing spending and highlights the struggle lawmakers faced in coming up with ways to pay for it

The investments include US$109 billion on roads and highways, US$15 billion on electric vehicle infrastructure and transit systems, and US$65 billion towards broadband, among other expenditures on airports, drinking-water systems, and resiliency efforts to tackle climate change.

Rather than Biden’s proposed corporate tax hike that Republicans oppose or the gas tax increase that the president rejected, funds will be tapped from a range of sources – without a full tally yet, according to the White House document.

Money will come from COVID-19 relief funds approved in 2020 but not yet spent, as well as untapped unemployment insurance funds that Democrats have been hesitant to poach. Other revenue is expected by going harder after tax cheats by beefing up Internal Revenue Service enforcement.

The rest is a hodgepodge of asset sales and accounting tools, including funds coming from 5G telecommunication spectrum lease sales, strategic petroleum reserve and an expectation that the sweeping investment will generate economic growth – what the White House calls the “macroeconomic impact of infrastructure investment”.

The senators from both parties stressed that the deal will create jobs for the economy, a belief that clearly transcended the partisan interests and created a framework for the deal.

For Biden, the deal was a welcome result.

Though for far less than the approximately US$2 trillion he originally sought, which is raising some ire on the left, Biden had bet his political capital that he could work with Republicans and showcase “that American democracy can deliver” and be a counterexample to rising autocracies across the globe.

Moreover, Biden and his aides believed that they needed a bipartisan deal on infrastructure to create a permission structure for more moderate Democrats – including Sinema and Joe Manchin of West Virginia – to then be willing to go for a party-line vote for the rest of the president’s agenda.

Senator Richard Blumenthal of Connecticut criticised the bipartisan agreement as “way too small – paltry, pathetic”. House Speaker Nancy Pelosi, like Biden, warned that it must be paired with the president’s bigger goals now being prepared by Congress under a process that could push them through the Senate with only Democratic votes.

“There ain’t going to be a bipartisan bill without a reconciliation bill,” Pelosi said