On Wednesday night, senators voted to move forward on a piece of legislation that does not exist yet, driven by an artificial timeline. Democrats hope that they can quickly agree on trillions of dollars in new spending for a sweeping economic and social-welfare agenda as soon as possible so they can get on with their August vacations. In some sense, this is consistent with the way Congress has operated in recent times. But what’s unique is that it was not just Democrats who were dispensing with good governance to jam through their agenda. Instead, Democrats were joined by 17 Republicans (including Senate Minority Leader Mitch McConnell), who aided and abetted this reckless act.
The decision of Republicans to collaborate with Democrats is both bad policy and makes little sense politically. As we have been saying for months, despite what the media (and evidently, some Republicans) will tell you, America’s infrastructure is not crumbling and is not deeply in need of repair. There is not an economic justification to spend money to stimulate an economy that will recover on its own as the nation emerges from the pandemic (growth accelerated at an annual rate of 6.5 percent in the second quarter, the Bureau of Economic Analysis announced on Thursday). Also, it is not as if the government is in the black. The Biden administration’s own estimates foresee debt as a share of the economy surpassing the World War II record this year. And Fed chairman Jerome Powell, who had been insisting that inflation is going to be transitory, has conceded that it will take longer to abate than he previously expected.
The myth that the group of Republican negotiators has been helping to perpetuate is that there are two completely separate pieces of legislation under consideration: One, a $550 billion bipartisan plan that focuses on traditional infrastructure; and two, a $3.5 trillion social-welfare bill that includes a host of liberal priorities — subsidized college and child care, expansion of Medicare and Medicaid, elements of the Green New Deal, and perhaps even immigration amnesty.
In reality, the two bills are clearly linked. Biden has said so. Senate Majority Leader Chuck Schumer has communicated this by moving both bills on parallel tracks. And Speaker Nancy Pelosi has said she would not even bring the bipartisan bill to the House floor for a vote unless the Senate passes both bills.
Some Republicans have been arguing that if they vote for a bipartisan bill, then it will encourage centrist Democrats, Senators Joe Manchin and Kyrsten Sinema, to walk away from the bigger bill. But it is far from clear that swallowing an additional $550 billion in spending will decrease the overall price tag of the combined bills. Manchin this week said, “If the bipartisan infrastructure bill falls apart, everything falls apart.” To Manchin, it’s important that the process has bipartisan cover. It also may make things easier for him to vote for spending in chunks rather than in one big bill. His comments indicate that by working to get the smaller bill across the finish line, Republicans are making Schumer’s job easier.
It is true that Sinema came out in opposition to the Democrats-only $3.5 trillion reconciliation bill after the announcement of the bipartisan deal. However, reading her statement, it’s clear that she isn’t opposed to the idea of passing a bigger bill, just the price tag. That still leaves her open to voting for a less expensive, but still extravagant, reconciliation bill. And because Republicans are helping to pass $550 billion of spending, it means Democrats might be able to get more overall spending than if they were to try to hold a purely partisan vote on one massive bill.
Republican defenders of the bipartisan deal also argue that it’s fiscally responsible because it will be fully “paid for.” Yet some of the supposed pay-fors are dubious. For instance, according to a summary of the compromise, they are counting on $56 billion from economic growth being generated from the infrastructure spending and an unspecified amount of money from recouping enhanced unemployment benefits that were fraudulently paid out during the pandemic. There is also some hocus-pocus that takes advantage of baseline budgeting.
One example is the decision to delay the implementation of a Trump-era rule meant to reform Medicare’s prescription-drug program. If implemented, the Congressional Budget Office determined that it would increase the cost to the government for a number of reasons, including that it would reduce the price of drugs paid by Medicare recipients at the counter, thus making them more likely to take advantage of their drug benefits. But Biden had already delayed the rule until 2023, so it is not currently increasing Medicare spending. The $49 billion in “savings” from delaying it further is entirely vaporous.
Beyond this, it’s important to keep in mind that in a time of unprecedented debt, new spending adds to our fiscal obligations whether or not it’s “paid for.” Any money saved to pay for new infrastructure projects is money that could have otherwise been used to finance our existing obligations. For instance, the bill claims $260 billion in savings from repurposing unused COVID-relief money and unemployment benefits. If there’s that much extra COVID money floating around, it would be more responsible to return that amount to the Treasury.
Some Republicans don’t want to be seen as obstructionists. But politically, obstructing the majority party’s agenda has never hurt the minority party. Quite the contrary. Democrats benefited from obstruction in the 2006 and 2018 midterms, and it was crucial to Republican waves in 2010 and 2014. Giving Biden a big bipartisan victory is throwing him a life raft at a time when his presidency is being hurt by rising crime, increasing inflation, and the reemergence of COVID-19 restrictions.
As we write, there is still a glimmer of hope. To pass the Senate, the bipartisan plan will still have to overcome at least one more 60-vote threshold. Republicans still have time to come to their senses and reject this costly and unnecessary piece of legislation that will backfire politically. We urge them to do so.