Biden's $2 trillion infrastructure plan.
The debate has begun.
I’m Isaac Saul, and you’re reading Tangle: an independent, ad-free, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum — then “my take.” You can reach me anytime by replying to this email. If someone forwarded you this email, they’re asking you to sign up. You can do that by clicking here.
Today’s read: 11 minutes.
Today we’re covering Joe Biden’s infrastructure plan, which got the nod with 46.4% of the vote in yesterday’s poll where I allowed readers to pick the topic. Because of how big this bill is, we’re skipping today’s reader question to give it adequate space.
Tomorrow.
As much as I like to avoid political prognostication, it’s impossible to write 3,500 words in a politics newsletter every day and not make some predictions — or at least stake out some ground on issues. So for the last few days, my team and I have been looking through some of my writing in Tangle and trying to see how well it has aged. We’ve found some embarrassing moments, some keen insights and a few funny things to review. In tomorrow’s subscriber-only edition, we’ll be sharing the results.
Quick hits
Iowa Democrat Rita Hart has dropped her challenge to U.S. Rep. Marianette Miller Meeks’ victory in the Iowa 2nd Congressional district (Des Moines Register). Tangle covered the contested election in Iowa on March 23rd. (Tangle)
In a new memoir, the president’s son Hunter Biden chronicles his battle with addiction and defends his time on the board of a Ukrainian energy company. (The Washington Post)
Former U.S. Transportation Secretary Ray LaHood, who served under President Barack Obama, took $50,000 from an associate of a billionaire who ran an illegal scheme providing foreign contributions to U.S. campaigns, federal prosecutors said Wednesday. (NPR)
The fourth wave of coronavirus could be here. Roughly 63,000 Americans per day were diagnosed with COVID in the last week, a 17% increase from the week before, with caseloads increasing in 25 states. (Axios)
Pfizer says its vaccine is still 91% effective after six months, a positive sign for long-term immunity (The Wall Street Journal). The CDC director said yesterday that data suggests vaccinated people do not carry the coronavirus. (Insider)
What D.C. is talking about.
Joe Biden’s infrastructure plan. Yesterday, the Biden administration unveiled the plan, which is 25 pages long and can be read here. The $2.5 trillion plan would be a massive overhaul of our infrastructure, one of the largest and most wide-reaching proposals in American history, touching everything from bridges and roads to broadband internet access and essential at-home caregivers.
There is no legislation for this bill yet, so much of this is still speculative (whenever Congress gets its hands on a plan like this, it can change quickly). But here is a brief round-up of how the Biden administration wants to spend the $2.5 trillion:
$650 billion will go to “at-home” infrastructure. That’s $213 billion toward retrofitting and building over two million homes, and rehabilitating 500,000 homes for low and middle-income home buyers. $111 billion invested into clean drinking water, including $45 billion to replace all of the country’s lead pipes. $100 billion invested into high-speed broadband and another $100 billion invested into the electrical grid. There’s also $137 billion to be invested into public schools and community colleges, and another $28 billion for things like the Department of Veterans Affairs hospitals and federal buildings.
$621 billion will go directly to public infrastructure. That’s $115 billion to revamp highways and roads, including the 10 major bridges and 10,000 smaller bridges that need reconstruction. $20 billion will be invested in safety for cyclists and pedestrians. $85 billion will go to public transit and modernizing transit systems. $80 billion will go to clearing Amtrak’s repair backlog. $174 billion will go to building 500,000 electric vehicle charging stations by 2030 and converting 50,000 diesel transit vehicles and 20% of the yellow school bus fleet to electric trucks. $25 billion would go to airports and car-free access to airports. $17 billion would go to inland waterways, ferries and the freight system.
$400 billion would go into the “care economy,” expanding access to home or community-based care for the elderly and those with disabilities. It would vastly expand Money Follows the Person, a Medicaid program that helps move residents out of nursing homes and back into their own homes. Biden’s also pushing for wage increases and better benefits for caretakers.
$180 billion would go into “research and development,” with a focus on climate change and reducing emissions. $50 billion would go to manufacturing domestic semiconductors, a boost to the U.S. chip industry.
Biden plans to pay for the bill over 15 years by raising corporate taxes from 21% to 28%, while also increasing taxes on companies’ foreign earnings. These changes would largely replace the tax structure former President Donald Trump turned into law four years ago in his tax bill.
He has said he is open to proposals from Republicans and Democrats on how to pay for the bill, but has vowed repeatedly not to increase taxes on households earning less than $400,000 a year. So far, the outlines of the plan have faced strong opposition from Republicans. But Democrats are once again exploring budget reconciliation — the same process they used to pass the $1.9 trillion coronavirus relief package — as a path toward making the bill law.
What the right is saying.
The right opposes the plan, arguing that it costs far too much and has too little emphasis on actual infrastructure proposals.
The Wall Street Journal editorial board said that “Most Americans think of infrastructure as roads, highways, bridges and other traditional public works,” which is why it polls so well.
“Yet this accounts for a mere $115 billion of Mr. Biden’s proposal,” the board wrote. “There’s another $25 billion for airports and $17 billion for ports and waterways that also fill a public purpose. The rest of the $620 billion earmarked for ‘transportation’ are subsidies for green energy and payouts to unions for the jobs his climate regulation will kill. This is really a plan to build government back bigger than it has ever been.
“Mr. Biden also proposes to build ‘broadband infrastructure in unserved and underserved areas’ by subsidizing government-owned and nonprofit networks,” the board added. “But the Trump Federal Communications Commission unleashed private broadband investment by liberating providers from Obama net neutrality rules, streamlining regulations and limiting how much cities could extort them to install 5G sites. In 2019 providers built over 46,000 cell sites, up from a mere 708 in 2016.”
In Bloomberg, Michael R. Strain said that Biden’s plan to improve the nation’s infrastructure should go hand in hand with deregulatory action to accelerate the building projects, and dinged Biden for not pursuing a carbon tax that could garner Republican support.
“The plan is almost comically broad,” he added. “I’m all for spending $180 billion to upgrade research laboratories. Whether to spend more on in-home care for older Americans is a good debate to have. But let’s not call those proposals infrastructure programs. And the balance of spending in this infrastructure proposal should be more heavily weighted toward … infrastructure. Biden wants to spend $400 billion — nearly 20% of the total cost of the bill — on improved in-home care for the elderly and people with disabilities, while only allocating $115 billion for roads and bridges.”
Henry Olsen argued that Republicans are right to oppose Biden’s “so-called” infrastructure plan, but they need to propose something in response:
“This thrust should be opposed, full stop. Republicans disagree about many things, but opposition to the federal government planning our economy and lives according to a central, political premise is a core principle. Conservatives believe that America’s initiative and free markets are sources of national strength. One can adapt a free society to meet genuine social needs; that’s why we have an extensive social safety net, environmental protection and subsidized access to education. But one cannot adapt a free society to do away with the principles that make it free.
“Still, it’s never enough to just say no… Republicans should be against an infrastructure bill that cares more to expand public transit most people don’t use than on fixing roads they do. They should be for a bill that fixes roads, upgrades ports and airports, and improves crumbling schools to make them temples of learning. They should be open to paying for these through innovative methods, such as levying an annual fee on electric or hybrid vehicles that otherwise pay little for the roads they use. And they should also be willing to borrow at today’s near-zero interest rates, because investment in long-term projects is exactly what all economists say borrowing should finance.”
What the left is saying.
The left supports the plan, arguing that Biden has an opportunity for a major infrastructure overhaul that is broadly supported by Americans.
“This is not like the joked-about ambitions of the previous administration’s many ‘infrastructure weeks,’” Bernard L. Schwartz and David Rothkopf argued in USA Today. “In fact, although it provides for major new improvements to highways, mass transit, electric vehicle charging systems, water systems, the electric grid, research and development and key parts of our health system, it’s not just an infrastructure plan.
“As Biden made clear through the name he gave this initiative, it is at its core a jobs plan,” they added. “In his Pittsburgh speech unveiling it, he said Wall Street economists have estimated the program could generate up to 18 million new jobs… It is also a growth plan. Investing in infrastructure increases productivity and attracts additional investment. Economists with S&P estimated that Biden's plans (including a $1 trillion American Families Plan he said he'd announce in a few weeks) could inject $5.7 trillion into the U.S. economy and raise per capita income by $2,400.”
The Washington Post editorial board said the plan is a “big bet on big government.”
“In announcing this strategic shift, Mr. Biden has three advantages. The first two are political: He is in tune with public opinion, at least in the sense that 52 percent of Americans — roughly the percentage of votes he won in 2020 — now say they prefer a bigger government providing more services, vs. 45 percent who want a smaller government providing fewer services, according to Pew Research Center,” the board wrote. “Meanwhile, his Republican opponents, despite their predictable opposition to his proposed tax increases, have themselves shifted in favor of more active government during the Trump era. Infrastructure was a priority for President Donald Trump, too, albeit unfulfilled during his term, as were tariffs, border controls and a bigger defense budget. The political constituency for laissez-faire economics has all but collapsed in the United States.
“Third, and most important, Mr. Biden’s plan addresses real needs, both on the spending and the revenue sides. There are many details we do not know, and the bill will inevitably change as Congress works on it prior to passage — if indeed it ultimately passes,” they added. “However, to the extent it addresses long-standing backlogs in transportation maintenance and water-supply safety, and in preventing climate change (and increasing the United States’s resilience in the face of unavoidable climate impacts), the priorities are sound. And insofar as it pays for itself, at least in part, by correcting unduly light business taxation, the plan strikes blows for both equality and fiscal responsibility.”
Meanwhile, some progressives have argued that the bill doesn’t go far enough to address climate change. While the bill could be “the closest thing” the left will get to a Green New Deal, Tom Philpott asked “what about agriculture?” in Mother Jones.
“There’s no slowing climate change or protecting us from its worst insults without reforming the way we farm,” he wrote. “Agriculture generates 10 percent of US greenhouse gas emissions; and our most important growing regions, from the fruit and vegetable fields of California to the Midwestern corn belt to the citrus groves of South Texas and Florida, are increasingly vulnerable to climate-related shocks like polar vortex-driven freezes, droughts, storms, and wildfires… Yet the 27-page fact sheet on Biden’s American Jobs Plan says very little about agriculture, mentioning it just twice in passing… In a bill that proposes to spend $2.3 trillion over eight years, $5 billion amounts to just 0.25 percent of the total. To put the proposed expenditure into context, consider that in 2020, farmers received $46 billion in total federal aid, an outlay that went almost exclusively to massive operations that perpetuate the status quo.”
My take.
The National Review editors made one of the only cases I saw that the bill was not necessary. They pointed to one study that argues, essentially, that our infrastructure is “basically fine.” This seems to fly in the face of all the other studies I’ve seen and the opinions of civil engineers I’ve interviewed over the years, nevermind my own personal experience of traversing the country. But their best argument in opposition is that this should be handled at the local level, not by the feds.
In my mind, though, this is what the federal government is for. That we have more than 10,000 bridges in need of repair, that we have so many delays in our airports, so many potholes on our roads, so many lead pipes still transporting water to our kids, and so many Americans still lacking access to high-speed internet is an absolute travesty. If you’re a frequent flier or have driven across the country a few times as I have or — say — tried to use public transportation in your area, you have probably experienced the woes of our infrastructure. And Biden is right to pursue a massive plan to address it. Of all the things he set out to do, a major infrastructure overhaul is probably the thing I am most excited about and in favor of, and during the Trump administration conservatives and liberals alike were behind it.
I’m also in favor of a forward-looking American infrastructure that addresses the climate crisis — and it is a crisis. I’ve entertained plenty of skepticism about the threat of climate change over the last decade but my mind is mostly made up: it’s no longer hypothetical. Go ask the farmers in the midwest about the floods destroying their crops, or Californians about the wildfires upending their lives, or coastal property owners about rising sea levels destroying their property value. It’s not just climate change (Trump was right, for instance, to insist on better forest management to prevent wildfires), but thinking about a future with roads, drainage systems and power grids more adept for more frequent extreme weather is an absolute necessity. If that makes me a liberal shill on this issue, so be it.
All that’s to say: dumping federal money into roads, bridges, airports, internet access, power grids and even schools is okay by me. If I’m picking the places my tax dollars are going to go, those things are near the top of the list.
But there are still lots of questions. For every element of this plan, there are a dozen issues related to how to get it done. Take one example: the plan calls for transporting solar power from California to Texas. That requires building lines, which requires getting permits, which requires construction on people’s land or building the kinds of long-distance high-voltage power lines that environmental activists have opposed in the past. That will amount to one sentence in what could be a thousand-page bill. The how of this is twice as important as the plan itself, and we won’t know more until there is a piece of legislation explaining how to make it happen.
And yes: Just like some of the coronavirus relief bills, this one is packed with stuff that can hardly qualify as infrastructure. I want at-home caregivers to be paid more than they are. I’ve seen them in action — most recently the ones who cared for my late grandmother — and they are a godsend. Angels on earth. And they should make more than they do. But an infrastructure bill is not the place for it — and that $400 billion goes to at-home care while $115 billion is going to roads and bridges is just backward, to put it mildly. With any luck, moderate Democrats and Republicans involved in the actual legislation can put that imbalance right.
Then there’s the plan to pay for it. It seems Biden’s math is in the ballpark of what is realistic, though he’s not going to balance the budget simply by raising taxes on corporations and companies’ foreign earnings. Biden has expressed an openness to alternatives, though he pledged he would not raise taxes on families earning less than $400,000 a year. The corporate tax rate was 35 percent before Trump took office, and he cut it to 21 percent. Moving it to 28 percent is not over the top — it’s a middle ground. Again: it’s hard to debate without the actual legislative details, and we’re going to have to keep digging in as things get closer. But the sheer amount of money involved is hard to comprehend. Dan McLaughlin proclaimed the COVID relief bill plus this infrastructure package comes out to about $31,758 of new spending per household. That’s no joke, and there will need to be a clear path forward to cover the cost for such a plan to become reality.
A story that matters.
President Biden is unsure of how he’s going to proceed on student debt cancellation, but America could find out soon. Biden has asked Education Secretary Miguel Cardona to compile a memo on his legal authority to forgive student loan debt, including cancellation of up to $50,000. Biden has previously said he wouldn’t go that far, instead saying he would aim to cancel $10,000 of loan debt. Chief of Staff Ronald Klain now says Biden’s mind isn’t made up, and he plans to make a decision once he sees the memos his education secretary lays out. (Axios)
Numbers.
57%. The percentage of Democrats who trust the news media “a lot” or “some” according to a new Morning Consult poll.
19%. The percentage of Republicans who trust the news media “a lot” or “some” according to a new Morning Consult poll.
58%. The percentage of Democrats who trust the police “a lot” or “some” according to a new Morning Consult poll.
84%. The percentage of Republicans who trust the police “a lot” or “some” according to a new Morning Consult poll.
15 million. The number of doses of the Johnson & Johnson vaccine that were ruined after an accident at a Baltimore plant.
719,000. The number of jobless claims that were filed last week.
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Have a nice day.
When’s the last time you heard some good news about criminal justice reform? How about this: A new research paper by a University of Wisconsin sociologist says that the disparity in how Black drug offenders are treated versus White drug offenders has disappeared in the last decade. Through fiscal year 2018, there is no difference in the number of months a Black drug offender spends in prison vs. a White offender. In 2009, the disparity was 47 months. There is still a Black-White discrepancy for sentencing in federal crimes of all types, but it has shrunk from 34 months to six months. “This remarkable but unheralded progress reflects 15 years of reforms by the courts, Congress and, most important, the Justice Department,” Charles Lane writes. (The Washington Post)
So, let's just raise the tax on corporations? The current 21% rate, thanks to Trump, is about average in the developed world. The proposed 28% rate is not a middle ground (as you said, Isaac); it is at the high end. It would make the US less competitive, cost private sector jobs, and motivate businesses to move partly or wholly overseas. It would hand China our lunch, competitively. But that's not the point.
What is a corporation? It is, basically, shares of stock. If you own a share of stock, you own a piece of it. If you own all the shares, you own the whole corporation. And who owns those stocks? Everyone does, in savings accounts and retirement plans. A tax on corporations is a tax on all who save. It is, in fact, a double tax: First the net earnings are taxed to the corporation and then what's left is taxed to shareholders who get the remaining profits as dividends (or indirectly as capital gains).
A corporation is not some amorphous, greedy entity with antisocial tendencies and no soul. A corporation is basically a group of shareholders, and those shareholders, in general, are all of us. Even those who earn less than $400,000 a year.