It's Infrastructure Week. Really.
Plus: Pharmacies are doing a better job of vaccinating than the government, New York will legalize weed, and more...
President Joe Biden will outline plans for $2.25 trillion in new spending on infrastructure, financed by massive tax hikes on businesses and individuals, during a speech scheduled to be delivered in Pittsburgh, Pennsylvania, later today.
Yes, "Infrastructure Week" has finally arrived.
Citing congressional sources briefed on the plan Tuesday, The New York Times reports that Biden will propose $625 billion in federal spending on traditional infrastructure items like roads, bridges, mass transit, railroads, and ports. Additional spending will be earmarked for upgrading utilities, improving power grids, and expanding rural broadband internet service. There will also be funding for some items that seem to have little to do with infrastructure, including $400 billion for "home care for the elderly and disabled," $300 billion to "revive U.S. manufacturing," and another $300 billion to provide for more affordable housing, according to The Washington Post.
The infrastructure package will also be tied to the White House's plans for tackling climate change, including the goal of putting America on course for net-zero carbon emissions by 2050. To that end, Biden will reportedly propose electrifying the entire federal government vehicle fleet.
To pay for all this, the White House will propose raising the corporate income tax from 21 percent to 28 percent. That would generate an estimated $2.1 trillion over 10 years, but it would also reduce America's future economic growth and likely cost hundreds of thousands of jobs. When you include state-level corporate income taxes, a federal rate of 28 percent would mean American businesses would incur the highest tax rates in the developed world.
"As the details come out, you'll hear advocates claim these new investments will actually pay for themselves through new growth or that deficits don't matter," predicts Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a nonprofit that advocates for smaller deficits. She notes that a recent analysis from the Congressional Budget Office and Penn Wharton Budget Model suggests that debt-financed infrastructure spending produces a net negative return on the initial investment.
Already, the usual suspects are pushing for Biden to propose even more spending.
This is not nearly enough. The important context here is that it's $2.25T spread out over 10 years.
For context, the COVID package was $1.9T for this year *alone,* with some provisions lasting 2 years.
Needs to be way bigger. https://t.co/eTQ7cxuTzF
— Alexandria Ocasio-Cortez (@AOC) March 30, 2021
More spending is indeed likely to be coming down the pike behind the infrastructure bill—as are more tax increases. The Times reports that what Biden will announce Wednesday afternoon is merely the first half of a two-part "Build Back Better" agenda that will ultimately cost about $4 trillion.
Splitting the package in half makes quite a bit of political sense. Infrastructure spending enjoys bipartisan support in Congress because it allows lawmakers to shower money on contractors in their districts—and because it provides an excuse for putting up big signs everywhere reminding constituents that their tax dollars are being used effectively for once.
Hiking the corporate income tax will be far less popular, but that's been Democrats' biggest tax policy priority since Republicans lowered the rate from 35 percent to 21 percent in 2017. Attaching that to the infrastructure bill gives it the best chance of passing.
Still, there is plenty to critique about what Biden is rolling out on Wednesday. For one, American manufacturing doesn't need $300 billion in government spending to be "revived" when outputs are already at or near record highs. Removing the Trump administration's tariffs on imported steel and aluminum would be a far less expensive boost for manufacturers. Likewise, making housing more affordable doesn't require pumping Americans' tax dollars into subsidies for developers and builders, but sweeping away government mandates that drive up the cost of construction.
FREE MINDS
Most Americans are more likely to seek out COVID vaccines at local pharmacies than at government-run mass vaccination sites.
Who would have guessed? Not the Biden administration, which has spent more than $4 billion to set up 21 "vaccination hubs" in California, Florida, New York, Illinois, Massachusetts, and Texas and more than 1,000 government-run sites in community centers all over the country—but is now reconsidering that plan, Politico reports:
Despite the money the federal government has spent on the mass-vaccination pilot sites, they are administering just a fraction of the shots given across the country each day. Federal data show the retail pharmacy program — which has signed up 21 chains and 17,000 stores — can reach far more Americans in a shorter time, according to four senior officials with direct knowledge of the matter. The bottom line, those sources said, is that more Americans seem to be willing to walk to their local pharmacist to get the vaccine than to travel to a federal vaccination site for the shot…
The vaccination hubs, which are run by FEMA and staffed in part by National Guard troops and other Pentagon personnel, have administered just 1.7 million doses since the beginning of February. Over the last two weeks, the sites gave about 67,000 shots a day, according to a series of internal FEMA briefing documents and data sets obtained by POLITICO. That's roughly 2.5 percent of all doses administered nationwide during the same period, according to data published by the Centers for Disease Control and Prevention.
FREE MARKETS
New York will be the 14th state to legalize recreational marijuana as soon as Gov. Andrew Cuomo signs a bill now sitting on his desk. Perhaps he's hoping that New Yorkers will forget that he's been a terrible governor if they can finally buy some legal weed?
My statement on the legislation passed tonight by the NYS Legislature to legalize adult-use cannabis: pic.twitter.com/CqYs6oLWTn
— Archive: Governor Andrew Cuomo (@NYGovCuomo) March 31, 2021
Unfortunately, President Joe Biden is still living in the 1990s and opposes federal legalization, Reason's C.J. Ciaramella reports.
QUICK HITS
• Rep. Matt Gaetz (R–Fla.) is being investigated by the FBI for allegedly violating federal sex trafficking laws by paying for a 17-year-old girl with whom he was romantically involved to travel with him. Gaetz claims the investigation is part of an extortion plot led by a former Department of Justice employee.
• The Minneapolis trial of former cop Derek Chauvin, who killed George Floyd after kneeling on his neck for more than nine minutes, included damning testimony from eyewitnesses on Tuesday.
• Former Nixon henchman G. Gordon Liddy, mastermind of the Watergate burglary, is dead.
•Andrea O'Sullivan has some answers if you're wondering whether non-fungible tokens are a scam (or secretly useful).
• Want to feel really old?
https://twitter.com/ryanvooris/status/1377091055045242883
