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Pros and cons of the Biden infrastructure bill

Occasional Observer

“A billion here, a billion there, and pretty soon you’re talking real money. . .”

                — Attributed to the late Senator Everett Dirksen

  

The current infrastructure bill being formulated by the Biden administration has everyone asking:  Just what is infrastructure? One simple definition is the basic physical and organizational structures, facilities and systems needed for the operation of a society or enterprise. As commonly understood in the U.S., this includes transportation systems, electrical and other power distribution, drinking water, wastewater and stormwater collection and distribution, and telephone and internet facilities.

The core of this new bill being formulated  is clearly infrastructure but there is so much more — it is really a grab bag of varied spending proposals that the administration supports and wants to write into law. But as presently conceived less than half of the $2 trillion budgeted for the bill is really for infrastructure, as most of us understand it, the rest earmarked for a wide assortment of worthy programs, mostly for social welfare. Despite the administration’s efforts to make all these different programs sound well integrated, they really are not and do not belong in the same package. But politically maybe it makes some sense.

Most Americans, especially Republican politicians, tend to think of infrastructure as being primarily about “roads and bridges.” Even so, less than a quarter of the  transportation portion of the budget  is allocated for roads and bridges ( $135 billion). The largest segment ($174 billion), while for cars and trucks, is planned for providing electric vehicles for the federal government and a national network of half a million charging stations. In addition, there is $85 billion for upgrading mass transit, $80 billion for Amtrak, and lesser amounts for airports, inland waterways and building in resilience to cope with climate-related disasters.

A little over $300 billion is more or less equally divided between expanding high-speed broadband, improving the national electrical grid, and  modernizing America’s drinking water, wastewater and stormwater systems.

The call for high-speed broadband access throughout the country ($100 billion) has become a non-partisan matter, most everyone seems to want it. 

The recent storms in Texas that knocked down the state’s electric grid and caused enormous damage that is sure to be repeated unless a much better system is put in place has reminded us that, throughout the country, our electrical grid needs considerable upgrading: ($100 billion). 

The bill calls for $111 billion for “water infrastructure”, including $45 billion to eliminate all lead pipes and $56 billion to modernize America’s drinking water, wastewater, and stormwater systems. It’s a huge amount of money but hardly seems like enough for the tasks.

The total budgeted for infrastructure is $877 billion, a staggering amount but nowhere near enough to complete the job. 

The remaining 54% of the bill is budgeted for 26 other specified areas. The largest item, caregivers for elderly and people with disabilities, is budgeted at $400 billion, the largest category in the bill. Some other areas to be funded include: public schools, public housing, the VA, retrofit of existing homes and commercial properties and nearly half a trillion dollars for programs in research, development, and manufacturing. And much more.

Perhaps because President Biden has vowed that no one earning less that $400,000 a year would have to pay more federal taxes because of this bill, there has been no mention of raising the federal gas tax to help pay for at least the “roads and bridges“  portion of the bill. The Federal Excise Taxes on Gasoline (18.4 cents/gal.) and Diesel Fuel (24.4 cents/gal.) have not increased since 1994; inflation over the past 27 years has reduced the value of the fuel taxes collected by nearly half.

Legislators, particularly those from rural states, worry that increasing fuel taxes will anger their voters. Getting members of Congress to support a significant fuel tax increase will not be easy. But such a tax increase is long overdue. Increasing the fuel taxes by only 50 cents/gal. would yield nearly $100 billion additional annually, enough to fund all of the $621 billion transportation priorities currently laid out in the bill within seven years. And it might induce people to drive less and manufacturers to produce more fuel-efficient vehicles.

The current bill proposes to pay for its $2 trillion dollars of expenses by several alterations to the federal tax code including raising the corporate income tax from 21% to 28% and closing tax loopholes as never before. However, since last year more than 55 of our largest corporations paid zero federal income tax, this plan may need to be bolstered by more revenue producing methods. Significantly increasing the budget for, and capability of, the Internal Revenue Service  would be a good place to start.

 

Architect and landscape designer Mac Gordon lives in Lakeville.

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