Politics Reason Foundation finds plenty to dislike about Biden's infrastructure plan

06:50  11 june  2021
06:50  11 june  2021 Source:   washingtonexaminer.com

Where do infrastructure talks go from here now that Biden's negotiations with Republicans collapsed?

  Where do infrastructure talks go from here now that Biden's negotiations with Republicans collapsed? As new infrastructure talks begin, old differences with Republicans have already emerged.Weeks of negotiations resulted in little headway, with major differences on costs and taxes going unreconciled. Republicans accused the president of changing his demands and being unwilling to compromise on his insistence on "social infrastructure" while the White House said the Republicans' offers didn't meet America's needs.

Instead, Biden and congressional Democrats are attempting to redefine them as infrastructure and pass them on the argument that what America needs right now is more infrastructure spending…including, it seems, on programs that have nothing to do with infrastructure . To the extent that American infrastructure has problems, it's partly because of comparatively high construction costs that make projects more difficult to build. Instead of attempting to solve that problem, Biden ' s infrastructure plan would make it worse. That's because, at its heart, it's not really an

But Biden is determined to find Republican support. The President plans to pursue bipartisan support, according to his advisers. He' s already held multiple bipartisan Oval Office meetings on the issue. During a meeting with labor leaders in February, Biden repeatedly stressed that he thought there was a path for bipartisanship on the issue The domestic economy piece of the plan would include key Biden campaign priorities such as universal pre-K, significant spending on childcare, care-giving and proposals designed to try and address portions of the workforce hit hardest by the pandemic economy.

Baruch Feigenbaum is assistant director of transportation policy at the Reason Foundation, a significant player in the world of transportation policy. The foundation is sharply critical of President Joe Biden’s $2.3 trillion infrastructure grab bag of plans. Feigenbaum, in an email interview with the Washington Examiner, discussed the proposal, the vehicle miles traveled tax, and the future of transportation funding in early June. This is a lightly edited transcript of that conversation.

a man wearing a suit and tie: LA.Transpo.jpg © Provided by Washington Examiner LA.Transpo.jpg

Washington Examiner: Granting that this is all analysis and not advocacy, the Reason Foundation recently came out swinging against President Biden's infrastructure plan. The Reason Reader, which is sent out to supporters, had five articles picking it apart. Just how bad is this grab bag of proposals?

Go green or go bipartisan? Biden's big infrastructure choice

  Go green or go bipartisan? Biden's big infrastructure choice WASHINGTON (AP) — President Joe Biden’s hopes of channeling billions of dollars into green infrastructure investments to fight climate change are running into the political obstacle of winning over Republican lawmakers who oppose that approach as unnecessary, excessive spending. As negotiations unfold in Congress in search of a bipartisan deal, the White House's ability to ensure a climate focus in Biden's sweeping infrastructure package is becoming daunting — so much so that key Democrats are warning the administration to quit negotiating with Republicans, calling it a waste of time that will produce no viable compromise.

President Joe Biden unveiled his sweeping infrastructure proposal to expected opposition from Republicans. But before he can worry about finding sympathetic GOP lawmakers, he'll have to contend with members of his own party who are skeptical of the trillion proposal. It' s unclear if any Democrats will actually vote against the package on the floor, but if the administration is looking to shore up its chances and avoid being derailed by Democratic defectors, it may be hard pressed to find sympathetic Republicans.

Now that his massive coronavirus relief package is law, President Joe Biden is laying out his next big proposal: A roughly trillion plan for improving the nation' s infrastructure and shifting to greener energy over the next 8 years.

Baruch Feigenbaum: It's bad for many reasons. First, it does away with the users pay/users benefit principle that has been the hallmark of transportation funding for 100 years. Second, it's effectively stimulus spending at a time when the economy is growing. Eliminating the supplemental unemployment benefits would be more effective at helping the economy than this proposal. Third, it spends federal money on transportation modes such as mass transit, cycling, and walking that is clearly local and should be funded at the local level. Fourth, it ignores the real needs like rebuilding the interstate highway system, which was recommended by the National Academy of Sciences. Fifth, it ignores the fact that we have a surface transportation bill reauthorization (although the House Democratic proposal for that is awful as well).

Biden's high-wire act on infrastructure is at a critical moment

  Biden's high-wire act on infrastructure is at a critical moment President Joe Biden has entered a critical moment where the decisions he makes will dictate the success of his sweeping $4 trillion legislative agenda -- and potentially his first term in office. © Evan Vucci/AP President Joe Biden speaks as he commemorates the 100th anniversary of the Tulsa race massacre, at the Greenwood Cultural Center, Tuesday, June 1, 2021, in Tulsa, Okla. (AP Photo/Evan Vucci) On its face, that may appear hyperbolic, just four months into Biden's presidency.

Infrastructure -as-stimulus plans seldom work because it takes too long for the spending to happen to help the economy over the short term. Biden is wise to focus on the former and abandon the latter. It’ s refreshing that Biden wants to pay for the programs with tax revenue rather than by borrowing that would increase the deficit. But higher taxes will blunt the growth effects of the program. That’ s reason to think more carefully about where the revenue will come from. Do we want less business income, or less pollution?

The president’s plans to invest in infrastructure , education, health care and more would push federal spending to its highest sustained levels since World War II. President Biden displayed a list of Republican members of Congress who voted against the stimulus package but are now promoting it in their home states during a visit to Cleveland on Thursday.Credit Doug The levels of taxation and spending in Mr. Biden ’ s plans would expand the federal fiscal footprint to levels rarely seen in the postwar era to fund investments that his administration says are crucial to keeping America competitive.

Washington Examiner: What would it do for unions?

Feigenbaum: By strengthening project labor agreements, it effectively gives a leg up to union operators over nonunion operators.

Washington Examiner: There was a recent article by Real Clear Investigations saying that a majority of the jobs this funds would NOT go to unions. Do you have any thoughts about that?

Feigenbaum: The article has a point on where unions are strongest, but unions will still get one-third of the new jobs, which is a significant increase for them after years of losses under both Democratic and Republican presidents.

Washington Examiner: Reason’s latest "Surface Transportation Newsletter" opened by stating, "Some transportation groups remain optimistic about the $115 billion devoted to 'roads and bridges' in President Joe Biden’s $2.3 trillion American Jobs Plan (AJP), but I am reluctantly concluding that, given the proposal’s overall price tag and priorities, this is more of an anti-highways proposal than an increase in needed investment in America’s aging highways." How is it that such a small percentage of an infrastructure package is devoted to the main thing that most people think about when they hear the term "infrastructure"?

Biden proposes minimum corporate tax rate to fund $1 trillion infrastructure spending

  Biden proposes minimum corporate tax rate to fund $1 trillion infrastructure spending President Joe Biden on Wednesday proposed an infrastructure package worth $1 trillion in new spending that would be funded without raising the corporate tax rate. The new pitch aims to avoid Republican scorn by sidestepping the president's previously proposed corporate tax rate hike. It would instead implement a minimum corporate tax rate of 15%, aimed at some of the most profitable corporations in the country.

Biden ' s progressive plan could find itself in the same graveyard as years of failed efforts to give infrastructure a massive cash injection. Americans and their elected officials overwhelmingly support the idea of repairing bridges, reducing traffic congestion and fixing But Democrats’ plans go much farther than that, including items like weatherizing homes, shuttering old mines and boosting clean energy innovations like battery storage and electric vehicles, along with all the good-paying green jobs that those programs could create. House Democrats have sketched out a similarly ambitious plan to

The Biden administration is expecting a new infrastructure proposal this week from a bipartisan group of lawmakers, but those legislators are moving forward without any of the tax hikes the president has demanded to pay for his plan . The group of senators -- which includes at least five Democrats and a handful more Republicans -- has decided against using corporate or individual income tax increases to pay for spending on infrastructure projects, according to a senator involved in the talks. “There are no tax increases.

Feigenbaum: It's a good question. Democrats seem to be far more interested in social justice and the negative effects that highways have created than their far greater positive benefits. Expanding the use of the term "infrastructure" to mean almost anything is a good way for Democrats to fund other priorities like child care that are clearly not infrastructure and the general public has no appetite to fund with taxpayer dollars.

Washington Examiner: Is there anything good about what Biden is proposing?

Feigenbaum: By being so bad, it is unlikely to get adopted. A smaller, more targeted but still problematic package would have stood a better chance at getting enacted.

Washington Examiner: Reason are probably more responsible than any other institution for developing the idea of a vehicle miles traveled tax, which would use technology to charge people based on road usage. Is there anything in Biden's proposal that would bring a VMT any closer to reality?

Feigenbaum: I don't believe there is anything in his proposal, but there is a national mileage-based user fee (what industry calls a VMT tax) pilot that will test the concept in all 50 states in all surface transportation reauthorization proposals, so it is likely to happen regardless of the Biden proposal.

After crafting $1.2 trillion infrastructure deal, bipartisan group of senators start lobbying White House, colleagues

  After crafting $1.2 trillion infrastructure deal, bipartisan group of senators start lobbying White House, colleagues The deal would not raise the corporate tax rate, which Biden had proposed. And it wouldn't hike the 18.4-cent federal per-gallon gas tax.The deal, reported by several media outlets and confirmed by a Senate source familiar with the deal, would focus on traditional transportation programs such as rail, bridges and waterways. It would not include "soft" infrastructure such as climate change and housing, which Biden had called for in his original $2.25 trillion American Jobs Act.

Washington Examiner: Given the 50-50 split in the Senate and the narrow Democratic majority in the House, is there an infrastructure bill that could be carved out of Biden's proposals that could get bipartisan buy-in? What would definitely have to be pitched over the boards to get us there?

Feigenbaum: It would have to be more narrowly targeted to traditional infrastructure such as roads and dams. It would have to rely on a much smaller increase in the corporate tax cut and, ideally, user fees. But the longer this drags out, the less likely there is to be an infrastructure bill separate from the surface transportation reauthorization, and I would argue a reauthorization is the preferred approach.

Washington Examiner: How much would it realistically cost to rebuild America's aging interstate system, and over what period?

Feigenbaum: More than a trillion dollars over 20 years. We have proposed toll financing and P3s [aka public-private partnerships] so that the folks using the interstates are the ones paying for it.

Washington Examiner: How much money could be raised for that if we opened the American road industry up to private investment?

Feigenbaum: Totally private is unlikely, but public-private partnerships could generate billions of dollars. One of the challenges is there is a prohibition on tolling interstate highways. Tolls are the main revenue source in P3s. So, there is less private sector interest. We should allow tolling on the interstates, refund the gas taxes paid to travel on the interstates, increase the private activity bond cap to $45 million or higher to provide equivalent tax treatment for the private sector, and we would see major interest.

Washington Examiner: What is one thing you wish Republicans better understood about infrastructure? Democrats? Voters in general?

Feigenbaum: Republicans: Mileage-based user fees and tolls are the future. We can have those without a gas tax and avoid double taxation, and we can solve the privacy concerns.

Democrats: User fees are important because transportation will never "win" funding if it has to compete against education and defense, so eliminating user pays is counterproductive. Voters value physical infrastructure, not whatever is defined as "infrastructure" at the moment

Voters in general: We primarily fund infrastructure through users' pay and gas taxes. We're studying new alternatives, and it is important to be open to all options.


Original Author: Jeremy Lott

Original Location: Reason Foundation finds plenty to dislike about Biden's infrastructure plan

Opinion: Why the GOP infrastructure offer is a sham .
Jeffrey Sachs writes that rather than engaging in endless bipartisan negotiations on a sham Republican counteroffer, President Joe Biden and the Democrats should push through the Americans Jobs Plan on a party-line vote.The alarm bells are sounding for President Joe Biden's ambitious American Jobs Plan, which aims to rebuild the nation's aging infrastructure while preparing it for the demands of the 21st century. After weeks of seemingly endless bipartisan negotiations, it's time for Biden to give up and push through his plan on a party-line vote.

usr: 2
This is interesting!