Budget office: Infrastructure bill adds $256B to deficits

Nearing decision time, senators are wrapping up work on the bipartisan infrastructure plan, and talks were under way late Thursday to expedite consideration and voting on the nearly $1 trillion proposal.

The package appeared on track for eventual Senate passage, a rare accord between Republicans and Democrats joining on a shared priority that also is essential to President Joe Biden’s agenda. But the schedule was not set as senators were working into the evening, and voting could still push into the weekend.

A much anticipated analysis of the bill from the Congressional Budget Office concluded that the legislation would increase deficits by about $256 billion over the next decade. Senators wanted that information before voting.

As senators proposed more changes to the package, Senate Republican leader Mitch McConnell said those amendments would need to be considered, and then “we’ll be able to begin to wind things down.”

It’s unclear if the budget office’s assessment could peel away support, particularly from Republican senators who have been wary of using what some view as gimmicks to pay for the package.

“It is clear the pay-fors in this package are either phony or insufficient, and this bill is full of K street carve-outs, kickbacks, and pork,” U.S. Sen. Mike Braun, R-Indiana, said in a written statement. “Republicans must not support the Swamp’s bloated debt bomb parading as an infrastructure deal.”

But the bill’s backers sprang to defend the overall package, and said it included additional savings and would boost economic growth in ways the CBO does not measure.

The top negotiators, Sens. Kyrsten Sinema, D-Ariz., and Rob Portman, R-Ohio, said the package is “a historic investment in our nation’s core infrastructure needs.”

In a statement, they said the package is a long-term investment that will “improve economic efficiency and productivity, increase GDP, generate additional revenue, and will not increase inflation.”

The 2,700-page bill, the Infrastructure Investment and Jobs Act, has been debated for days and negotiated for weeks and is a first part of Biden’s infrastructure agenda. If approved by the Senate, it would next go to the House.

Senate Majority Leader Chuck Schumer, D-N.Y., said earlier Thursday, “We can bring this bill to a close very shortly.”

If senators wrap up work on the bipartisan bill, they will turn to the much more partisan undertaking on the next phase of Biden’s agenda: a $3.5 trillion proposal for what the White House calls human infrastructure—child care support, home health care, education and other expenditures that are Democratic priorities that Republicans have pledged to reject. Debate will extend into the fall.

Schumer wants the Senate to pass both the bipartisan package and a budget blueprint for the bigger proposal before senators depart for an August recess.

Dividing lines set, senators are eager to wrap up.

“I don’t think anybody’s looking to extend this out any longer than necessary,” Sen. John Cornyn, R-Texas, told reporters.

The budget office analysis Thursday comes as critics of the bill have voiced concerns about the impact the infrastructure spending would have on the national debt, and criticized the ways it is being paid for as “squishy.” ”

That’s because the bill’s backers in some cases counted savings that would have occurred regardless of whether the infrastructure bill passes.

For example, the CBO did not count the $53 billion that is expected to be saved because more than two dozen states cut off expanded unemployment compensation before the benefit was set to expire. The bipartisan negotiators had also claimed $56 billion in savings through economic growth, while the CBO did not take that into account.

Key to watch will be how many Republicans join what’s expected to be all Democrats in supporting the bipartisan package as it heads toward votes.

McConnell of Kentucky had promised to be “100% focused” on stopping Biden’s agenda, but when it comes to the bipartisan infrastructure plan, he has said “there’s an excellent chance it will be a success story for the country.”

Senators have processed nearly two dozen amendments to the 2,700-page bill, an unusual legislative undertaking. None has substantially changed the framework of the public works package, which would send money for roads, bridges, water works, broadband and other projects to virtually every corner of the nation.

One of the amendments generating the most attention Thursday involved cryptocurrency.

The bill would raise an estimated $28 billion over 10 years by updating IRS reporting requirements for cryptocurrency brokers, just as stockbrokers report their customers’ sales to the IRS.

Sen. Pat Toomey, R-Pa., and others are concerned that crypto miners, software developers and others would be subject to the new IRS reporting requirement. Toomey led efforts to narrow the definition of who must file the reporting forms to the IRS.

“If we were not to adopt this amendment, then we could be doing a lot of damage,” Toomey said. “We could have a very chilling effect on the development of this technology, and that’s what I am most concerned about.”

Portman, who had written the provision, tweeted that he agreed with the amendment sponsors that more can be done to clarify the intent of the provision and the Senate should vote on their amendment. But that vote has yet to occur.

Another amendment garnering attention came from Sens. John Cornyn, R-Texas, and Alex Padilla, D-Calif. It would allow state and local governments to make infrastructure spending an eligible expense for up to 30% of the COVID-relief money that they have received.

Cornyn argued that many communities, particularly rural ones, don’t have a “mountain of COVID-related expenses” and the money would help them get projects back on track that have been delayed because of the pandemic. The Senate had not yet taken a vote on that amendment Thursday.

“All we are doing them is simply giving them the freedom to use these federal dollars on these projects if that makes sense for these communities,” Cornyn said.

The Senate was expected to be quiet Friday as many lawmakers attend funeral services for former Sen. Mike Enzi in Wyoming. But senators are bracing for another weekend session as they push ahead on both pieces of legislation.

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3 thoughts on “Budget office: Infrastructure bill adds $256B to deficits

  1. Just keep printing that money; the Chinese are licking their chops as to when they can overtake us when we finish committing financial suicide.