Infrastructure

The Bipartisan Infrastructure Bill Will Add More Than $250 Billion to the Deficit. Does Anyone Care?

A CBO report that might have sunk legislation in an earlier era was greeted with a bipartisan shrug.

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President Joe Biden calls his infrastructure spending plan, which could pass the Senate later today or early Tuesday, the "most significant long-term investment in our infrastructure and competitiveness in nearly a century."

If it's that important, you might expect Congress to find a way to pay for the thing.

After all, this isn't emergency spending approved in the midst of a pandemic. This is a carefully plotted bill that the country's top policymakers clearly see as a major priority, one that members of both parties have spent months shaping at a time when the country's annual budget deficit and long-term debt projections are near record highs. Surely, surely, this is the type of bill that we can reasonably expect a fully baked plan to pay for.

Ha.

The Congressional Budget Office (CBO), the legislature's nonpartisan number-crunching agency, says the bipartisan infrastructure bill would add about $256 billion to the deficit over 10 years. The real figure is likely to be higher, because the package contains a few gimmicky elements that are designed to trick the CBO's forecasting metrics.

The biggest of those gimmicks is the promise that Congress will reallocate more than $200 billion of COVID relief funds to cover infrastructure costs. It remains unclear exactly what unused COVID funds will be redirected, and the bill only rescinds $50 billion in actual budget authority from previously passed COVID relief bills, according to an analysis by the Committee for a Responsible Federal Budget (CRFB).

Other proposals to save and redirect federal dollars to pay for the infrastructure bill are also unlikely to materialize. Take the $49 billion lawmakers plan to "save" by further delaying an already-delayed Trump administration regulation altering how prescription drug discounts are applied by health insurers. "Because the Congressional Budget Office projected that the so-called rebate rule would increase federal spending in Medicare and Medicaid by about $177 billion over a decade, due to a rise in Medicare premiums (and therefore, taxpayer-funded subsidies for Medicare premiums), lawmakers get to count a further delay in the rule (beyond the Biden administration's one-year delay) as 'savings' for the federal government," explains the National Taxpayers Union.

What's more, there's nothing to stop the Biden administration from implementing that new rule next year or the year after. So Congress can count the delay as "savings" for now and then incur the costs anyway. It's the equivalent of planning an expensive vacation, then postponing it, using the "savings" from not taking the trip to buy a car, and then taking the vacation next year.

When you filter out the gimmicks designed to game the CBO score of the infrastructure bill, the CRFB says the package will probably add $340 billion to the deficit over 10 years.

Deficit spending and budgetary gimmicks are nothing new. What is noticeably different this time is just how little all this seems to matter. Unlike in the recent past, when CBO projections, as The New York Times put it, "loomed like the sword of Damocles over delicate legislative compromises," the news that the infrastructure bill would require more borrowing has mostly elicited a collective shrug.

Shortly after the CBO analysis was released, Sen. Rob Portman (R–Ohio), the lead Republican negotiator on the package, put out a statement dismissing deficit concerns. Instead, he argued that infrastructure spending will "will improve economic efficiency and productivity, increase GDP, generate additional revenue, and will not increase inflation."

This is a pretty common argument—one that sometimes is even true—for deficit spending on infrastructure projects. If you build more roads, it allows for more economic activity, and thus more jobs and more future tax revenue to be collected.

But as the CBO's report makes clear, actually paying for the infrastructure makes those benefits bigger than they otherwise would be. A fully offset infrastructure package would boost GDP by an estimated 0.11 percent over the next 30 years while a deficit-financed package would barely break even. That's because, as the CRFB notes, running higher deficits to pay for infrastructure spending will reduce private investment over the long term and, thus, lower future economic growth as well.

That's why it would make sense to pay for the infrastructure bill—really, truly pay for it—even if the country weren't facing the prospect of trillion-dollar deficits for most of the foreseeable future. Unfortunately, as the debate over the infrastructure bill has once again revealed, there is simply no political will for breaking Congress's addiction to debt.

Lawmakers deserve some credit for piecing together a package that does not include any broad-based tax increases—unlike Biden's original plan, which called for hiking the corporate income tax. But adding to the deficit is nothing more than a promise that taxes will have to rise in the future. That's a promise Congress loves to make, and it's also a bill that will one day come due.

NEXT: A Federal Judge Lets a Cruise Line Require Proof of Vaccination, Saying a Florida Law Banning the Practice Is Probably Unconstitutional

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  1. The world is going to end in 9 years, and we’re worrying about how much it will cost?

    1. The Gulf Stream is at the tipping point, leading to certain climate doom. It hasn’t been this weak in 1,000 years. I guess something else caused it to weaken back then, and look what happened. Oh wait, nothing happened.

      1. I always laugh at that sort of comparison and say “So you’re saying it was worse a thousand years ago.”

        1. And also corrected itself.

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    3. No, nobody cares. Why? Deficits have not tended to cause inflation, in fact, for the last 250 years, the USA has tended to increase the size of government by about 7% per year, on average. So, if the US government spent 1.5 trillion in 200, it would be at 6 trillion by 2020, and 12 trillion/year by 2030. Additionally, the debt (which is what money is — debt) has tended to every decade as well. So, if it is 25 Trillion now, by 2031, it will be 50 Trillion, by 2040, it will be 100 Trillion. Money is debt.

      Additionally, look at a company like Apple Inc. They bring in 2 billion dollars a week in extra money (profit, you might say). Yet they have 100 Billion dollars in debt. ATT&T has close to a quarter of a trillion dollars in debt. Total global corporate debt = 50 Trillion dollars. This is not considered a massive crisis, because most of this debt helps fund people’s retirements when, as we age, we tend to move from stocks to bonds.

      Does anyone ANYONE care about Apple Inc’s 12 figure liability? NO!!! But why? As long as they pay their principal and interest (3 weeks’ worth of annual profit, or 2% of annual revenue = 1 year of annual principal and interest). That’s like if you make 100,000 a year and only pay a total of 2,000 a year in annual debt-service– including your mortgage. The US Government is at least 1,000 times more important than Apple Inc. and can moreover pay any debt that comes its way by borrowing from its Central bank, which only nation-states have.

      1. Sorry for the typos. 200 should be 2000. And Federal spending and debt double every 10 years — pretty consistently for a quarter of a millennium.

  2. BTC up 15% since the weekend so I care! Thanks for continuing to ruin the dollar!

  3. But adding to the deficit is nothing more than a promise that taxes will have to rise in the future.

    Nah, I’m pretty sure they’ll just keep printing money.

    1. Nah, I’m pretty sure they’ll just keep printing money and raise taxes.

      1. Of which both are forms of *theft*. How about you all come work for me for my ‘rare’ printed paper money and since paper has just about nothing for value every-time I need more work done I’ll just print more until *all* your work really amounts to nothing put the price of a slice of toilet paper.

    2. This has been happening for 250 years. The federal government spent 639,000 in 1790. By 1900 it was 500 million dollars and by 1920 it was 5 billion (down significantly from war-time spending, but still 4x what it had been a generation earlier). Noticing a pattern? By 1970, we were closing in on 200 BILLION! In other words, it’s doubled, typically (from 1790 to 2021) every 10 years or so! In 10 years, it will be 12 Trillion. Etc.

  4. It will probably add more like 250 billion a year for each of the 10 years, or 2.5 trillion total to the national debt.

    And the Dems are trying to pass it without raising the debt limit (which they would have to do with zero Repub support), which would force them to jack up taxes, again.

    None of which will be particularly popular with voters. 2022 will be a wipeout.

    1. If the voters still matter.

    2. Too low stakes to raise the debt limit now. They need to be backed up against a shutdown so they can get some mileage out of blaming republicans and then they’ll vote to increase the debt

    3. And the Dems are trying to pass it without raising the debt limit (which they would have to do with zero Repub support), which would force them to jack up taxes, again.

      The only reason Republicans wouldn’t support it is to make the Democrats look bad, not out of any sort of fealty to a concept of fiscal restraint. A few of them will defect for a plate at the pork buffet and it’ll pass without much issue. You have to understand, the average american WANTS more government spending. We’re in the middle of a cRiSiS and the only one that can save us is Uncle Sam and his magical printing press.

  5. No we don’t. We have ignored infrastructure in US for too long. The longer we wait the more costly it will be.

    1. Not enough holes in the ground in which to dump totalitarian cunts like you.

      1. Using tax money for public infrastructure is not totalitarian by any definition.

        1. Labor camps are not totalitarian either, I hear.

          1. I’m betting you’re one those #DATS who drank the bleach to stave off covid. Attacking a woman as being a cunt for posting an intelligent response clearly illustrates your a failure w/women. Probably have an inflatable doll as your companion in order to prevent yourself from being out smarted by your mate. Then you follow it up w/a labor camp defense, you must have the Priests’ favorite alter boy.

            1. You’re either new around here, or a troll. Maybe both. Molly is generally pretty cunty, and a leftist troll herself. Hence the response.

            2. I’m betting you molest prepubescent children, jb

    2. Who’s “we”? I have voted against every local initiative which has bled the tax coffers dry with “Social Justice” programs that have caused our infrastructure to atrophy.

      Infrastructure used to be the major function of government (certainly in the US), but it’s taken a distant back seat in favor of a bizarre nebulae of social programs which at best do nothing, and at worst cause major decay.

      1. “in favor of a bizarre nebulae of social programs which at best do nothing, and at worst cause major decay.”

        In other words, embezzlement

    3. How have we ignored it? The states and feds all collect gasoline taxes and other motoring-related levies and fees. What are they doing with that money and why should we reward their failure with even more money?

      1. Haha. Shhhh. We must always start with the premise that “we” are not doing enough.

        A little guilt goes a long way!

    4. WHAT US infrastructure??? The only thing the USA government is responsible for is ‘Postal Routes’ (debatable if maintenance is even part of that), A National Defense, Standards System and a few other things.

      You know what they call a GOVERNMENT controlled economy???? Socialism.
      What do they call a ‘National’ level of Socialism???
      National Socialism
      A government practice sprouted in Germany commonly known as Nazism.

      1. I agree, we must do something about those 39 mooching states who rely on socialism for their existence. FL, TX, KY, TN, SC are just a few of the socialist moochers who provide nothing towards our nation’s operating costs.
        What happened to the Romney mantra that you repukelicons do everything all by yourselves?

        1. Look faggot, that’s long been since debunked. Take your leftist faggotry back to Salon, or whatever rock you crawled out from under. You’re way out of your depth here.

        2. Try it, soon to be dead soy

        3. Thought I was done adding to my mute list. Well, #3 on the list has been added.

        4. “we must do something about those 39 mooching states who rely on socialism”

          SO DO IT ALREADY GD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
          THEY DON’T WANT YOUR F-EN SOCIALISM!

          1. John paraphrased, “We wouldn’t have had to pull out our Gov-Gun-Forces if State-X would’ve just taken their lethal blue pill like we told them too.”

            Criminal mentality 101.

      2. That’s absolutely not what national in national socialism means.

        1. Lefty politicians play that same game with the U.S. Constitution.

    5. I know you don’t get out much, but aside from California, infrastructure is fairly on track.
      States tend to annually cruise around fixing things. Y’know, those repulsive Trump voting workers with their racist utility marks who mar your utopian dreams and generally keep society running while you’re crying and wailing.

    6. We need the infrastructure and we need to pay for it. That means biting the bullet and pay more taxes.

      1. Sell your souls to the [WE] foundation; because you don’t own you, [WE] own you!

  6. >>there is simply no political will for breaking Congress’s addiction to debt.

    none for resorting to violins either. the addict will always win.

  7. No one cares anymore.

    The National Debt Has Risen By $6.6 Trillion Under Trump
    BY TRAVIS EARLE July 30, 2020

    As Republicans and Democrats try to figure out how best to handle the financial crisis during the pandemic the national debt has risen by $6.6 trillion under President Trump. The debt was at $19.9 trillion when Trump took over as president, but as of July 27, the figure is now $26.5 trillion according to information from the Treasury Direct which is a part of the Treasury Department. This information clashes with Trump’s assertion that he would eliminate the soaring debt when he first became President.

    https://hillreporter.com/the-national-debt-has-risen-by-6-6-trillion-under-trump-74793

    That was July 2020. The Con Man wasn’t finished either.

    1. SleepyJoe said he would stop the virus. How’s that working out?

      1. We know that the Repukelicons and the #DATS game plan is avoid the vaccines in order to keep Covid alive & well. I think it’s a great plan, killing off your own Kith in order to ensure Biden’s failure is truly brilliant.

        1. They’ve written a particularly embarrassing script for this one

        2. Can you expand in that, faggot? Or is that the extent of your Media Matters talking points for the day?

        3. Trump delivered the vaccine. How’s that fit into your paradigm?

        4. Sinking Biden required no effort beyond listening to the man try to articulate ‘good morning’ to a camera.
          He hides in his basement for good reason.

  8. “The Bipartisan Infrastructure Bill Will Add More Than $250 Billion to the Deficit. Does Anyone Care?”

    As long as billionaires like Reason.com’s benefactor Charles Koch are getting richer — and they certainly are — then no. I don’t care.

    #InDefenseOfBillionaires

  9. Congress cares. It is 2.5 trillion less debt than they wanted. They are very sad.

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  11. There are at least a dozen other issues I have with the bill ahead of the cost.

  12. Neither party cares about fiscal balance any more. They are both like drunken sailors on a whoring binge, knowingly spreading the STIs they know they’ve already got. Other people don’t matter. Future generations don’t matter … as long as they get momentary pleasure from their orgasm.

    1. Sailors spend their own money.

  13. Remember that day the Constitution was Amended to include “infrastructure”??

    Yeah; Me neither.

    1. Still upset about the elimination of the 3/5ths compromise I see.

      1. You don’t like that blacks count as whole people, jb.
        What a racist

      2. You appear confused, faggot.

  14. I hear Home Depot is running low on wheelbarrows.

  15. Fact- Obama left the budget deficit at 450 billion. Trump and his R cronies, with no pandemic or anything else, put that up over a trillion.

    If those “oh so fiscal conservatives” didn’t give a shit about the budget deficit when passing tax breaks for their wealthy chums, why in the hell should the average American give a shit when they actually stand to *somewhat* benefit from this?

    1. Obama actually cared about fiscal responsibility.

      The modern GOP wants to spend trillions in order to bankrupt the country and go back to 1910 and the gold standard.

      1. Ahahahhahahahhahahahahhahahahhahahahahahaaaaaaaa… Good one.

  16. We can borrow our way out of reckless spending and the unsustainable welfare state!

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  20. Nobody has cared about the deficit or the budget in four decades. Cried wolf too many times, and now it isn’t even a campaign issue. Its what will happen to the climate change farce in a couple of decades.

  21. If the infrastructure bill adds at least $250 billion to the deficit – then what’s the best guess for the $3.5 trillion Schumer wants to jam through on “reconciliation”? Another $750 billion or so?

  22. “Shovel ready was not as shovel ready as we expected” – Obama. But it’ll be different this time. Just like communism will be different this time when the Democrat party tries it in the US.

  23. As Reason’s Eric Boehm reported, the Congressional Budget Office, Congress’ nonpartisan scorekeeper, estimates that the bill would add at least $256 billion to the deficit, and probably more like $400 billion. Nineteen Republicans voted for it anyway.

    Two and a half years ago, the CBO projected that Trump’s tax cuts would add five to eight times $256 to $400 billion to the federal deficit – and ALL fifty-one Republican senators voted for it.

    CBO Confirms GOP Tax Law Contributes to Darkening Fiscal Future
    Feb 5, 2019
    CBO projected that the tax cut will add $1.9 trillion to deficits over 10 years, even after accounting for any growth effects. We are already seeing this play out. The deficit grew 17 percent last year and is projected to grow another 15 percent this year even as the economy grew faster. The idea that tax cuts for the wealthy and corporations would allow us to grow our way out of debt – one of Republicans’ favorite myths – has proven incorrect once again.
    https://budget.house.gov/publications/report/cbo-confirms-gop-tax-law-contributes-darkening-fiscal-future

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    https://www.bestfavy.com/chemistry/is-co2-heavier-than-air-explained/

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  26. If left undisturbed, CO2 does sink lower to the ground than oxygen, although they both form separate exponential profiles (it’s not like the bottom half of a volume is 100% CO2 while the top half is 100% oxygen.
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