New $1.2 trillion infrastructure deal pleases truckers; human infrastructure ahead

Not only did Congressional negotiators and the White House produce one infrastructure deal. They may produce two.

As expected, a bipartisan framework for a $1.2 trillion infrastructure deal was reached by a group of 20 or so senators—enough to entice at least 10 Republicans when it comes for a vote in the full Senate.

At the same time, Democrats are working on a larger $3.5 trillion “human infrastructure” that includes things like universal pre-K education and two years free community college. If all goes well, that could pass under a “reconciliation” agreement that requires just 50 votes in the Senate – with Vice President Kamala Harris the tiebreaker.

“It’s going to help with regards to our roads and our bridges and our ports and waterways, and also helps expand digital infrastructure, broadband,” Sen. Rob Portman, R-Ohio, said at a news conference. “It’s very popular.”

The deal calls for roughly $1 trillion in infrastructure spending. More than half is “new” money, including some $40 billion in spending to fix bridges, $39 billion to mass transit, $55 billion for water infrastructure.

The other $500 billion or so is for renewal of the Fixing America's Surface Transportation Act (FAST Act) that expires Sept. 30.

Trucking interests and other business groups hailed the compromise as an example of Washington finally able to “get things done.”

“It’s refreshing to see Congress do its job and address national problems facing businesses and families. Americans, and the hardworking men and women who carry this economy on trucks, have waited long enough for Washington to act on our decaying infrastructure,” American Trucking Associations President and CEO Chris Spear said in a statement.

“We cheer this bipartisan breakthrough and hope it helps elected officials find more areas where they can work together to actually get things done,” Spear added.

Austen Jensen, senior vice president of government affairs at the Retail Industry Leaders Association (RILA), said the pandemic demonstrated to Americans how critically important retail supply chains are to ensuring families have access to the products they need when they need them.

“Our supply chains rely heavily on our nation’s infrastructure, which is why the bipartisan deal announced today is critically important,” Jensen said in a statement.

“Retailers urge policy makers to seize this opportunity to invest in the long-term viability and modernization of our ports, railways, and highways to reduce congestion and the likelihood of future supply chain disruptions,” he added. “Today’s announcement demonstrates that bipartisanship on significant issues is achievable, and retailers applaud the leaders who were instrumental in negotiating a path forward.”

“We urge Congress to send a bipartisan infrastructure bill to President Biden’s desk,” said Brendan Bechtel, chairman and CEO of Bechtel Group and chair of the Business Roundtable Infrastructure Committee

“It cannot be overstated how important it is for Congress to seize this once-in-a-generation opportunity to invest in the backbone of America, our infrastructure,” Bechtel added. “Taken together, the investments detailed in the bipartisan package would improve the lives of all Americans and elevate the United States to a new level of global competitiveness. Our economy will not only benefit in the near term from a significant infrastructure upgrade but also long term from sustained growth.”

How Washington plans to pay for this is unclear.

There is talk of recouping some money given to states for COVID relief. But it appears there is no increase in the federal fuels tax, no money to beef up Internal Revenue Service enforcement, or no significant increase in taxes on any group of America.

Instead, Congress appears to be saying, this act essentially pays for itself in the form of national economic gains. Or, simply, adding to the national debt.

According to a recent Business Roundtable study, each dollar of a $1 trillion infrastructure investment would yield nearly $4 in U.S. economic growth over 20 years. The study also found that an investment of this size and scope would increase the average American household’s disposable income by $1,800 every year for 20 years, create 1.2 million new jobs and boost wage growth.

The tying of the two infrastructure bills is the idea of Senate Majority Leader Chuck Schumer, D-N.Y., who had threatened to postpone Congress’s annual August recess until this $1 trillion bill came for a vote. Next is the $3.5 billion baby that is largely the brainchild of Sen. Bernie Sanders, I-Vt., chairman of the Senate Finance Committee.

That prospect is rustling some Republican feathers.

“One I love, this bill — the other, I can’t stand,” said Sen. Mitt Romney, R-Utah, one of architects of the bipartisan infrastructure deal said of the $3.5 trillion proposal Democrats plan to push.