Congress has a bad habit of spending money we don’t have. The latest example comes in the form of the proposed $1.2 trillion infrastructure bill, less than one-tenth of which actually covers traditional “infrastructure.”
According to the Biden administration, the plan will be paid for “through a combination of redirecting unspent emergency relief funds, targeted corporate user fees, strengthening tax enforcement when it comes to crypto currencies, and other bipartisan measures, in addition to the revenue generated from higher economic growth as a result of the investments.”
But is the proposal enough to actually to finance its massive cost?
-The White House, July 28, 2021
Mostly false or misleading. Significant errors or omissions. Mostly make believe.
According to two separate analyses, one from the nonpartisan Committee for a Responsible Federal Budget and one from the National Taxpayers Union, the infrastructure proposal falls significantly short of being properly funded.
This infrastructure bill is paid for through a combination of measures that are murky and may not actually cover the full costs. Some offsets make perfect sense such as repurposing $200 billion of unused COVID relief funds. Others are admirable but hard to accomplish like trying to recoup tens of billions of dollars of fraudulent unemployment insurance payments. However, to make up for $500 billion in new spending, there are not enough leftover funds or fraudulent checks to recover.
In one example, lawmakers claim that offsets from repurposed COVID relief funds and other various sources will not only save $491 billion, but also boost economic growth enough to generate an additional $56 billion of savings.
However, the Committee for a Responsible Federal Budget went line-by-line to show why this only covers about half of the new spending:
The Committee for a Responsible Federal Budget ultimately concluded, “Additional offsets should be added to prevent the Bipartisan Infrastructure Investment and Jobs Act from increasing the debt.”
The National Taxpayers Union wrote, “unfortunately most of the “pay-fors” rely on questionable math or gimmicky behavior.” In one example, the infrastructure bill claims to collect $49 billion by delaying an already delayed Trump-era Medicare Part D regulation. Because the nonpartisan Congressional Budget Office projected this rule would increase federal spending in Medicare and Medicaid, lawmakers say by delayed its implementation until 2023, they magically found billions of dollars to fund for infrastructure.
Moreover, the National Taxpayers Union warned, “taxpayers should be concerned by comments from President Biden and Congressional Democrats that suggest the bipartisan deal will only be enacted into law if Congress simultaneously passes trillions of dollars in additional ‘infrastructure’ spending, which may be paired with trillions of dollars in tax hikes that will harm economic growth.”
While it’s encouraging that lawmakers were pressed to answer the basic question of how the infrastructure spending proposal would be paid for, it doesn’t appear that their plan would successfully work. Perhaps if they stuck to traditional forms of infrastructure—roads, bridges and the likes—answering this question wouldn’t be so hard.