$1.2 trillion of infrastructure.
The Senate passed a bipartisan bill.
️I’m Isaac Saul, and this is Tangle: an independent, ad-free, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum — then “my take.” You can read Tangle for free or subscribe for Friday editions, and you can reach me anytime by replying to this email. If someone sent you this email, they’re asking you to sign up. You can do that by clicking here.
Today’s read: 13 minutes.
It’s a longer Tangle than usual, but it’s important: we’re covering one of the biggest legislative stories of the decade. Also, a question about unemployment and unfilled jobs.
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Quick hits.
The CDC is now urging pregnant women to get vaccinated (Link to the story). Separately, California became the first state to require all teachers and staff to agree to vaccination or regular testing. (Link to the story)
The Texas state senate outlasted a 15-hour Democratic filibuster in order to pass its election reform bill that will add new voter restrictions. The Texas House still needs to establish a quorum to pass it, but Texas Democrats have left the state. (Read about the filibuster)
Senator Rand Paul is under fire after disclosing that his wife bought stock in a company behind the Covid-19 treatment remdesivir in February of 2020. (Read why it matters)
The U.S. Census Bureau will release its 2020 data today that will be used to draw Congressional districts for the next ten years. (Story incoming)
The FDA is planning to authorize a third Moderna and Pfizer vaccine shot for people with weak immune systems. (Here’s why)
What D.C. is talking about.
Infrastructure. On Tuesday, the Senate passed a $1.2 trillion infrastructure bill aimed at rebuilding the nation’s roads and bridges, developing new climate-resilient infrastructure, and investing heavily in repairing airports and waterways. The bill passed by a 69-30 vote, with all 50 Democrats in favor and 19 Senate Republicans joining them. It now heads to the House of Representatives, where it is expected to be passed in the coming months, and then signed into law by President Joe Biden.
About half of the $1.2 trillion, which will be spent over eight years, is a reinvestment and continuation of current spending. But some $550 billion of it is new federal spending. Here is what’s in the bill, via Axios:
$110 billion in new funds for roads, bridges, and major projects.
$40 billion is new funding for bridge repair, replacement, and rehabilitation and $17.5 billion is for major projects.
$73 billion for the country's electric grid and power structures.
$66 billion for rail services.
$65 billion for broadband.
$55 billion for water infrastructure.
$21 billion in environmental remediation.
$47 billion for flooding and coastal resiliency.
$39 billion to modernize transit.
$25 billion for airports.
$17 billion in port infrastructure.
$11 billion in transportation safety programs.
$7.5 billion for electric vehicles and EV charging stations.
$2.5 billion in zero-emission buses, $2.5 billion in low-emission buses, and $2.5 billion for ferries.
The bill will include language regarding enforcement of unemployment insurance fraud. The measure will add $256 billion in projected deficits over eight years, according to the Congressional Budget Office.
While the deal was celebrated by Senate Republicans, Democrats and the White House, there are still some twists and turns ahead. House Speaker Nancy Pelosi (D-CA) and nearly 100 members of the Progressive Caucus have vowed to sink the compromise unless the Senate also passes a separate, more ambitious $3.5 trillion bill this year.
That bill, which all 50 Senate Democrats would need to support, could be passed via a process called budget reconciliation that requires no Republican support. Shortly after the infrastructure bill was passed, Democrats passed a $3.5 trillion budget resolution — a blueprint that will allow the reconciliation bill to move forward under Senate rules this fall. That blueprint includes an expansion of Medicare, potentially lowering the age of eligibility from 65, free prekindergarten and community college, a paid family and medical leave program, higher taxes on businesses and corporations and a slate of climate change proposals. It also includes immigration reform that would provide permanent residency to certain qualified undocumented immigrants.
In late August, Democrats in the House will begin debating the $1.2 trillion infrastructure package as well as the larger, $3.5 trillion budget reconciliation bill. The Biden administration will attempt to pass both bills simultaneously — a bipartisan infrastructure bill and the larger measure which could get through without any Republican support in the Senate. But they’ll need to keep progressive Democrats happy, who could sink any bill in the House, and keep moderate Senate Democrats happy, who could stop a budget resolution bill from getting through the Senate.
Below, we’ll take a look at reactions from the right and left. Then my take.
What the right is saying.
While many conservatives support infrastructure investment, they’ve been critical of the process of this bill and how it will be paid for (or whether it will be paid for).
In the Washington Times, Kay C. James said the bill is “neither reasonable nor centrist.”
“Improving America’s infrastructure is certainly a worthwhile goal,” James wrote. “But this infrastructure bill won’t deliver on its promises because of its failure to properly prioritize projects. For example, things like mass transit and Amtrak would get about the same amount that’s allocated for highways, even though buses and rail account for only a tiny fraction of Americans’ travel. The bill also includes exorbitant amounts of taxpayer-funded corporate welfare for the energy sector, including grants and loan guarantees for politically favored companies and technologies.
“Lawmakers want to pay for the bill’s spending in ways that are inappropriate or will never raise the amount of money needed to cover its costs,” James added. “One of the worst pay-for gimmicks is known as ‘pension smoothing,’ and it puts the costs on the backs of millions of the nation’s employees. The bill will allow corporations to reduce the amount they are required to contribute to their employees’ pension funds and instead use that money to increase their profit margins. Why would politicians promote such behavior? Because while it shortchanges pension funds by about $9 billion, the federal government gets to tax the resulting corporate revenue.”
In The Wall Street Journal, Stephen Miran said the bill is going to make inflation worse.
“While infrastructure, in the long term, will enhance the supply side of the economy and help keep inflation low, its effects in the short term will likely be the exact opposite,” Miran wrote. “A recent working paper published by the National Bureau of Economic Research reviewed the evidence of infrastructure investment’s short-term negative effects on the economy and found little sign of stimulus effects. Drag occurs in part because building new infrastructure disrupts the use of existing infrastructure, braking the economy’s supply side, not stimulating it.
“During road construction, for instance, traffic increases substantially, falling only after the project is completed,” Miran said. “More traffic increases the amount of time it takes for the economy to produce the same amount of goods and services, which pushes prices higher. With such a large infrastructure package, we can expect this phenomenon to be widespread. It is a common refrain in macroeconomics that policy makers ought to ‘lean against the wind’ through contractionary policy like interest-rate hikes when the economy is growing above potential, and stimulate the economy through rate cuts when it is in a hole. Extraordinary circumstances like a financial or public-health crisis may warrant more government spending. With this reasoning, the infrastructure spending is slated to arrive at precisely the wrong moment. Policy makers are leaning forward as[the] wind blows from behind.”
In PJ Media, Rick Moran said Senate Republicans just “handed Joe Biden a signature achievement that may have assured his re-election.”
“One way or another, there was going to be an infrastructure bill,” Moran said. “It would either take the form of a $2.5 trillion partisan Democratic wish list paid for by ending Trump’s tax cuts or a bipartisan plan that kept the tax cuts in place and eliminated — at least temporarily — much of the social justice agenda that was tied to the original bill. Biden had solemnly promised that the bill would be paid for. But once Republicans and a few centrist Democrats successfully took the end of the corporate tax cuts off the table, there was no chance the books would ever balance. The Congressional Budget Office issued a report on the bill last Thursday that says it would raise the budget deficit by $284 billion.
“The bill now moves on to the House of Representatives where Speaker Nancy Pelosi will wait until the Senate passes another bill — a $3.5 trillion monstrosity that would expand Medicare, offer free community college, massively increase social spending, and grant green cards to DREAMers,” Moran said. “There is little doubt that some infrastructure spending is good and necessary. Roads and bridges built by the federal government need to be maintained. The $1 trillion price tag spread out over eight years is certainly up for debate. Trump envisioned a bill half that size while he was in office… The reality for lawmakers is that voting for a bill that has many things they can support and a few poison pills is better for their constituents than not approving it at all.”
What the left is saying.
The left celebrated the passage, but progressives are holding their breath to see that the $3.5 trillion reconciliation package also makes it to Biden’s desk.
In The Washington Post, Mike DeBonis the bill’s passage seemed like “nothing short of a miracle.”
“The vote was the result of a carefully calibrated alignment of interests, one shepherded and ultimately supported by a group of senators isolated from the immediate pressures of the GOP voter base, which remains loyal to former President Donald Trump, who repeatedly urged the bill’s defeat. Among those interests is a strategic one, McConnell and other Republicans said. By joining with Democrats in an area of mutual accord, they are seeking to demonstrate that the Senate can function in a polarized political environment,” Debonis wrote. “That, they believe, can deflate a Democratic push to undo the filibuster — the 60-vote supermajority rule than can allow a minority to block most legislation — while setting up a stark contrast as Democrats move alone on a $3.5 trillion economic package.
“McConnell had less to say about Trump, who issued statements over the course of weeks decrying the Republicans who supported the infrastructure deal as ‘RINOs’ (Republicans in name only) who were handing a key victory to Biden,” DeBonis wrote. “Several other Republican senators said that the former president’s opposition simply was not compelling to lawmakers who have in some cases spent a career advocating for more federal investment in roads, bridges and broadband Internet access. Trump, for instance, proposed more than $1 trillion in infrastructure spending but failed to mobilize Congress to act even as Republicans held the House and Senate majorities during the first half of his term.”
In WHYY, Philadelphia City Councilmember Kenyatta Johnson made the argument from a local level.
“Citizens contact my office daily to report potholes; water pipes bursting underground and causing damage to streets, homes, and businesses; and the crumbling CSX bridge along 25th Street in Grays Ferry, just to name a few things,” Johnson wrote. “As Chairman of Philadelphia City Council’s Transportation Committee, I often hear from officials at SEPTA and the Philadelphia International Airport about how they can use all the money they can get to fix up critical infrastructure needs.
“As we are slowly coming out of the COVID-19 pandemic, passage of the Biden infrastructure plan would mean jobs for tens of thousands of Americans,” Johnson added. Philadelphia is the poorest big city in America, with nearly 30% of our residents living at or below the poverty line. Philadelphians with good-paying jobs fixing our city’s infrastructure — right in their own neighborhoods — would go a long way towards solving what ails Philadelphia and helping to reduce the murder rate in our city. A person with a 9-5 full-time job generally doesn’t pick up a gun and kill their neighbor. A job with living wages and benefits transforms a family for the better. That worker is also paying City, Commonwealth of Pennsylvania, and federal taxes, and increased tax revenues are always good for the bottom line of the City’s operating budget.”
In Slate, Jim Newell said moderates had their moment, and asked if progressives now get to have theirs.
“The smoke from the bipartisan fireworks had barely dissipated before Sen. Bernie Sanders, the chairman of the Budget Committee, was on the floor getting revved up about the next item of business, which he’s argued ‘will go further to improve the lives of working people than any legislation since the 1930s.’ This $3.5 trillion bill of progressives’ dreams, which will cover climate change, universal pre-k, child care, expanding Medicare, the child tax credit, Obamacare, giving undocumented immigrants a path to citizenship, taxing the rich, taking on prescription drug companies, and much more—this is the stuff progressives have been waiting to sink their teeth into, and getting the chance to do so is why they agreed to pass the moderates’ little infrastructure deal,” Newell said.
“But now the question stands: After reluctantly holding hands with the moderates all summer, will progressives actually get to own the fall?” Newell wrote. “Nineteen Republicans, including Mitch McConnell, didn’t go along with the bipartisan budget deal just because they love fixing bridges. They cooperated with Democratic moderates on a bipartisan infrastructure deal, as they acknowledged, because they thought it would limit Manchin and Sinema’s appetite for a reconciliation package. If that theory is wrong, Senate Republicans will feel all of the scorn they’ve gotten from conservative critics for enabling Democrats’ spending spree. But if it’s right, the progressives will lose again, and the summer of moderates will prove to be multi-seasonal.”
My take.
Earlier this year, Senator Mitch McConnell said that “100 percent of my focus is on stopping this new administration.” That seems a far cry from where he is now, defending a $1.2 trillion spending package and celebrating the Biden administration’s role in helping usher it through.
Quite a few readers objected to me describing this bill as “Biden’s infrastructure package” earlier this week, given that 19 Republican senators signed onto it. But let me reiterate: it’s Biden’s. This process — this fraught, fragile, complex balancing act of keeping progressives in the House happy while winning over nearly twenty Republican senators and keeping Joe Manchin and Kyrsten Sinema in line, all with a massive reconciliation bill in the background, and former President Trump lambasting his own party for supporting the measure — it could have only been accomplished by a couple of politicians in the country. And one of them happens to be in the White House.
A lot of people doubted that Biden could ever navigate Republican obstructionism, given how successful they were at stymying so much of Obama’s agenda. But even with the slimmest of margins in the Senate, he appears to be pulling it off, and exceeding even my own confident predictions that he’d accomplish more of his agenda than most people expected him to. I really don’t know how else to put it. This bill is bipartisan, and it has some Republican support, and it will benefit plenty of Republican voters, but it’s Joe Biden’s bill. No other Democrat in recent memory would have had a shot at getting this done — but Biden’s faith in the Senate, and the friends he’s kept, have clearly paid off.
And yet… There are plenty of traps ahead. The reality is going to set in soon for Republicans about what this means, and what they’ve just done, and what their constituents are going to say, and they’re going to need to act. Meanwhile, progressive Democrats seem dead serious about sinking any compromise bill if they don’t get their $3.5 trillion wish list, and I’d be careful about calling their bluff. That means Republican voters will soon find out what’s in that concurrent, larger package — a wave of citizenship for undocumented immigrants, billions invested in climate change remediation, a huge expansion of Medicare, and a major bump in taxes on corporations and the wealthy. These are policies that are going to be vehemently opposed by half of voting America — and the heat is really going to turn up. I’m still not sure how that plays out.
Worse for Biden and Democrats is they still don’t have the math. The bipartisan bill alone is a $256 billion hit on the deficit over eight years, and that’s probably a lower-end estimate. That may not be enough to run up (already worsening) inflation and certainly wouldn’t be the central cause of our current debt crisis — but it’s going to be a lot harder to stand for if another $3.5 trillion is rammed through the Senate on a 50-50 split with Vice President Kamala Harris casting the decisive tie breaking vote. Not many Americans are going to view that as a legitimate way to pass one of the most expansive bills in American history.
All that being said: I’ve expressed my support for the $1.2 trillion infrastructure spending when Trump proposed it, I supported it when Biden proposed it, and I support it now. So the Biden administration gets to celebrate the fact it has gotten further than previous administrations have and we may finally see the end of the years-long infrastructure week. Along the way, Biden’s favorite political body — the Senate — sent a message to Trump that he may control the fundraising but he doesn’t get to direct the upper chamber. All of that is good for Biden. But the hardest part is still to come.
Your questions, answered.
Q: How can jobless claims be at any sort of high compared to pre-pandemic averages when there are so many companies and businesses that are understaffed and being forced to go out of business because of the lack of help? I feel like everywhere I look, whether it be online postings or just driving by places of business, all I see are job postings and 'we're hiring' signs. Even where I work, at a correctional facility, almost every department (officer and civilian) is short-staffed. So I guess it just doesn't make sense to me that there are so many jobless claims when there seems to be so many jobs available.
— Devon, West Boylston, Massachusetts
Tangle: It’s a question a lot of people are trying to solve right now. First, one part of this is that pandemic unemployment assistance still hasn’t expired. That happens September 5th. So for another three weeks, being unemployed might remain a smart financial decision for millions of people, on top of being a smart health decision given the Delta variant and surge of positive Covid-19 cases.
Another thing undoubtedly at play is that so many people just had a year to think about their lives and what they truly want. Studies, surveys and polls have all shown that a growing number of Americans want career changes. The Daily podcast just did a fascinating interview series with service industry owners and staff that shed light on this. One waitress told the story of being able to read, pick up hobbies and get better sleep during the pandemic because she wasn’t working late nights and doubt shifts at a bar. Now she’s dead set on keeping her new lifestyle. She’s not alone: a lot of people just don’t want to go back to their old jobs, so they’re holding out for better pay, better benefits, or looking for new work entirely. That’s why wages have gone up.
Finally, I’d say that the speed with which this is all happening is also a factor. These industries returned with a force — like a tidal wave — leaving airlines understaffed, rental cars unavailable, and restaurants overwhelmed. That means they’ve had to move equally fast to rehire, and it’s proving difficult to find workers eager to jump back into these jobs right now.
Throughout the pandemic, people speculated about how it’d change our world, post-coronavirus. I think this labor shortage, and the general trend of the labor force looking for something better, is one of those ways.
A story that matters.
The Biden administration is becoming increasingly worried that rising gas prices are politically perilous. White House officials have called on OPEC+ members to increase its oil supply in order to lower prices, which have now hit $3.18 a gallon on average across the country. In July, OPEC+ agreed to increase production, which boosts supply and lowers the cost of crude oil and then gas prices. But White House National Security adviser Jake Sullivan said it’s not enough. “While OPEC+ recently agreed to production increases, these increases will not fully offset previous production cuts that OPEC+ imposed during the pandemic until well into 2022,” Sullivan said. “At a critical moment in the global recovery, this is simply not enough.” (You can read the story here)
Numbers.
84%. The percentage of customers who shopped for groceries mostly in person before the pandemic.
70%. The percentage of customers who shop for groceries mostly in person now.
7%. The percentage of customers who shopped for groceries mostly online before the pandemic.
12%. The percentage of customers who shop for groceries mostly online now.
50%. President Joe Biden’s average approval rating, according to RealClearPolitics, the lowest of his presidency.
155,576. The number of new Covid-19 cases recorded in America yesterday.
338. The number of new Covid-19 deaths recorded in America yesterday.
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Have a nice day.
Dragons are real. That’s basically my only takeaway from the latest news out of Australia, which is that researchers discovered the fossils of a “flying reptile” with a “23-foot wingspan.” Which, in my book, is a dragon. “The new pterosaur, which we named Thapunngaka shawi, would have been a fearsome beast, with a spear-like mouth and a wingspan around seven meters,” University of Queensland PhD candidate Tim Richards, who led the research team, said. The mouth alone was just a little over one meter long. “Even though pterosaurs could fly, they were nothing like birds, or even bats,” he said. “Pterosaurs were the very first back-boned animals to take a stab at powered flight.”
Because their bones were so light and hollow (for flying, because they were dragons), their fossilized remains are extremely rare. The extraordinary find was made by a local man named Len Shaw, who discovered the bones in a quarry. (Good News Network)
As to the unemployment question... how are rational people supposed to believe the "Biden economy" created 850,00 jobs in June while the Bureau of Labor Statistics simultaneously reported job openings increased from 9.2 million to 10.1 million as of the end of June. As Devon pointed out there isn't a business anywhere that isn't looking for help and hasn't curtailed service, shortened hours, etc. because people don't want to work. The economic recovery is being choked by the labor shortage despite the skyrocketing pay increases being offered. It's a stunning rebuke of the Biden "plan" and Congress' woeful performance... and a shining example of supply and demand economics. If only Congress would get out of the way and let capitalism work the way it always has.
Very curious to see if progressives really would sink this infrastructure bill if they don't get the addition $3.5T bill - it seems like they'd take major heat for that, from all sides. Plus, it'd probably drive them nuts to be effectively "joining" the Republicans in opposing it. :)