From Buckets to Budgets – Waiting on Infrastructure Plan Details

The bipartisan infrastructure agreement announced with much fanfare by the White House and a handful of Democratic and Republican senators on June 24 remains a feel-good topic in the nation’s Capitol – after all, who doesn’t like the old-fashioned notion of agreement amidst partisan divides – but the longer the wait for nitty gritty details on the deal, the more questions that come to mind.

Here are just a few:

Will the coalition of Democratic and Republican senators who crafted the plan hold together to ensure its passage?

How will it be paired up and managed with the other stand-alone Biden infrastructure plan – the American Families Plan – that the Democrats hope to get through the Senate using the reconciliation process on a straight party vote?

And how will either of the plans be paid for, especially the bipartisan one?

Note: As a former Federal departmental budget officer, I would NEVER be able to get away with anything like what the Office of Management and Budget (OMB) and the Congress are proposing as offsets to the bipartisan plan to insure it doesn’t add to the deficit.

With that caution aside, let’s start with two overarching questions that don’t really have official answers yet. First, what the heck is in the bipartisan plan? Second, if enacted, can our government actually deliver and, if so, when?

Speaking in Buckets

The only summaries of the bipartisan plan I have seen are “big buckets” and spending totals for each. By “big buckets” I mean things like highways, bridges, mass transit, broadband to rural areas, and so on. Moreover, there are whole categories of the bill – like $47 billion for “resiliency” steps to protect infrastructure – that have hardly been detailed at all.

While the details will be developed when the Senate’s bill is drafted in committee, I think for now that the ambiguity is deliberate and small “p” political.

The White House has described the deal as worth $1.2 trillion, and that sounds like a lot. But the original Biden infrastructure request was for $2.25 trillion, and that request was all for “new money.” By contrast, the bipartisan agreement of $1.2 trillion includes hundreds of billions that were already expected to be appropriated for infrastructure. When that is backed out, the bipartisan agreement totals only $579 billion in “new money” – about one quarter of what President Biden first proposed.

On the issue of how the new infrastructure investment will be paid for, the deal relies on several tried-and-true budget gimmicks – 5G spectrum auction proceeds, eliminating unspecified waste, fraud and abuse in unemployment insurance programs, and so on. It will be very interesting to see what the Congressional Budget Office reports when they score the bill, and don’t be surprised if CBO is using harder math than the White House and Senate. Until then, and maybe even afterwards, the fully paid-for bipartisan infrastructure agreement will be like the man behind the curtains in The Wizard of Oz. Pay no attention to him!

The Payoff

If the infrastructure investment agreement becomes law, when will the nation see the benefits?

In a recent Washington Post column, George Will asked “Is America Still Capable of Building Great Things?” In his opening paragraph, Will notes that construction of the San Francisco-Oakland Bay Bridge took four years in the 1930s. But after a 1989 earthquake, when one-third of the Bay Bridge had to be replaced, the project took over two decades. He went on to quote economists’ research that the inflation-adjusted costs of building a mile of the interstate highway system tripled between the 1960s and 1980s. Costs go up, and so does regulatory complexity.

On the plus side, then-Vice President Biden led the Obama-era stimulus effort and did so impressively, with few cases of fraud and abuse. But he also surely found that the promised “shovel-ready projects” were few and far between.

Today, major infrastructure projects take close to a decade just to clear the various bureaucratic hurdles before actual work can begin. Will attributes that to “activist government’s dysfunction” – government’s inability to do one thing at a time.

That phrase is from the Claremont Institute’s William Voegeli, and it means that the government can’t simply repair or replace a bridge, expand a highway, upgrade a rail line or a transit system, and the like. It must do so while also complying with a web of environmental, labor, safety and other mandates – all of which the Biden administration has indicated it will comply with –while also furthering small business and social equity advancements.

If there ever was a task for OMB’s Office of Information and Regulatory Affairs, the Innovation Fellows, and the Department of Transportation and its cabinet partners to take on, it should be this ever-thickening and sometimes immobilizing web of regulations and oversight. They were all put in place, individually and separately, for good reasons. But their accretion, like barnacles on the hull of the ship of state, will only slow a rebuilding of our crumbling national infrastructure.

What to Watch For

The next chapter of the infrastructure story may not take too long to play out, as the White House and congressional Democrats have a rather limited practical window to win approval for both the bipartisan infrastructure agreement, and the American Families Plan bill, before taking up Fiscal Year 2022 regular appropriations. We will know much more about all the details in those big infrastructure buckets once committees have to create legislative language to carry them forward.