Big questions loom ahead of Biden's next spending push, like 'what is
infrastructure?'
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[March 15, 2021] By
Jarrett Renshaw and Trevor Hunnicutt
(Reuters) - With a $1.9 trillion COVID
relief package finally passed, U.S. President Joe Biden's next big
spending push is already on the horizon - repairing the nation’s ailing
bridges, roads and airports and investing billions in new projects like
broadband internet.
Biden may sketch the outline of the plan, promised on the campaign
trail, in a joint address to Congress this month and provide details in
April, giving lawmakers several months to work on the bill before an
August recess, people familiar with the White House plans said.
The White House has added infrastructure experts to the administration
in recent weeks, and called in lawmakers and companies to discuss the
topic.
With a narrow majority in Congress, Biden and Democrats need to either
move all or parts of the package through a budget process that would
only require party-line votes known as reconciliation, or attract
Republican votes and make it a bipartisan effort.
Either way, Reuters' interviews with lobbyists, lawmakers,
administration officials and company executives show broad questions
still need to be answered before any bill can be written.
HOW DO YOU DEFINE INFRASTRUCTURE?
Biden and his fellow Democrats hope to expand the definition of
infrastructure beyond existing transportation architecture to include
items aimed at tackling climate change and its effects, echoing the $2
trillion, 10-year "Build Back Better" proposal floated during his
campaign.
That includes investments in electric vehicle charging stations,
zero-emission buses and zero-carbon electricity generation by 2035, and
directing dollars to minority neighborhoods and contractors, part of a
pledge to increase racial equity.
Democrats have signaled they want to invest billions in creating and
refurbishing affordable housing in any package and expand broadband
internet access to all Americans, particularly in rural communities.
U.S. House of Representatives Speaker Nancy Pelosi said on Friday that
she had directed senior Democrats to begin working with Republicans on a
“big, bold and transformational infrastructure package."
Republicans and influential trade groups like the U.S. Chamber of
Commerce support large-scale infrastructure spending, but not Democratic
efforts to inject climate change or equality policy into a spending
bill.
Representative Peter DeFazio, who chairs the House Transportation and
Infrastructure Committee, said in an interview his “tentative timeline”
is for the committee to complete action on its portion of an
infrastructure bill before the end of May.
He said a proposal could be divided between reconciliation to raise
revenue and direct funds and traditional legislative procedures to set
policy.
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A crack across the roadway is seen as Nevada Department of
Transportation worker Jarrid Summerfelt repairs damage to U.S.
Highway 95 after a strong earthquake struck near Tonopah, Nevada,
U.S., May 15, 2020. REUTERS/David Becker
HOW TO PAY FOR IT?
House Democrats passed a $1.5 trillion infrastructure package last year that
died in the Senate, but could be a blueprint here. It was one-third funded from
existing fuel taxes and budget transfers.
Leading Democrats suggest doing away with Trump’s 2017 tax cuts or imposing new
taxes on the super wealthy - ideas that are a non-starter for most Republicans
and some Democrats.
Some economists and business groups have suggested lawmakers should forget about
finding new funding for the whole package and instead borrow some of the money
given the historically low cost of debt and economic growth projections.
Others, including the U.S. Chamber of Commerce, suggest creating a federal
infrastructure bank that can lend money at cheap rates to private companies.
CAN THE HIGHWAY TRUST FUND BE FIXED?
The Highway Trust Fund, established in 1956, finances most federal government
spending for highways and mass transit - but it has been in the red since 2008,
according to the Tax Policy Center.
Federal taxes on gasoline and diesel fuel, a key source of revenue, have not
increased from 18.3-cents-per-gallon for gasoline or 24.3 cents for diesel since
1993, requiring some $140 billion in transfers from general revenues.
The latest fund spending plan expires in September, and there's little political
appetite to raise fuel taxes.
Some Democrats want to rethink how drivers are taxed, switching to a
vehicle-miles traveled tax that would sweep in electric cars, but collecting the
tax is difficult and raises many issues, including privacy concerns.
CAN EARMARKS HELP?
The American public doesn’t particularly like "earmarks," federal funding
stuffed into bills for a specific project in one lawmaker's district or state,
but they may be a way to bring bipartisan policy back.
The practice, banned since 2011 because of abuses, has some support among both
parties.
Democratic lawmakers hope earmarks can help keep their narrow majorities
together on big votes, boost vulnerable members’ reelection chances in 2022 and
attract Republicans to support bills. Republicans are also weighing whether to
embrace earmarks again.
(Reporting by Jarrett Renshaw and Trevor Hunnicutt; Additional reporting by
David Shepardson; Edited by Heather Timmons and Andrea Ricci)
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