Lone Candle
Champion of Truth
“The money for the program was included in the American Rescue Plan—passed back in March—a massive $1.9 trillion spending bill that was sold as a COVID-19 response but contained very little that had to do with the epidemic. The bill set aside $4 billion for use for drug addiction programs and mental health treatment.”
“The Florida governor..unveiled a $99.7 billion proposed spending plan that comes as DeSantis gears up for his 2022 reelection and continues to generate buzz as a top-tier potential 2024 White House hopeful. The governor’s budget is packed with federal stimulus funds from the Biden administration that DeSantis wants to use for his most politically popular programs, including a gas tax break and $1,000 bonuses for police and teachers.
The governor made it clear..that he wants to use $3.5 billion from Biden’s American Rescue Plan to help fund nearly every high-profile piece of his budget, setting up a scenario where the Biden administration could pay for policies DeSantis will use to campaign on during his reelection bid.
“I think the most ironic piece about his budget is that the governor wants to take $1.2 billion in American Rescue Plan money and use that for the gas tax break,” state Rep. Anna Eskamani (D-Orlando) told reporters after the budget announcement. “As the governor continually attacks President Biden, the reality is we could not balance this budget, or give out tax breaks without President Joe Biden.””
“the U.S. Department of Labor has denied California $12 billion in transit funding, including grants from the recently signed infrastructure bill. The reason? A 1964 federal law requires the labor department to certify that the state agencies seeking any mass-transit grants are “protecting the interests of any affected employees,” The Fresno Bee reported.
So, the Biden administration is claiming that California—the state that provides its public employees with unparalleled pay and pension benefits, and provides collective-bargaining rights unheard of anywhere else—is being mean to its “affected” public employees because the state passed a 2013 law, authored by Democrats, that infinitesimally reined in pension benefits.
As SFist summarized, “Biden is withholding giant amounts of federal money from California public transit because the state’s public-employee pension system is apparently not paying people enough.””
“”The Build Back Better Act relies on a number of arbitrary sunsets and expirations to lower the official cost of the bill,” explains the Committee for a Responsible Federal Budget (CRFB), a nonprofit that advocates for balanced budgets. The group’s newly updated analysis of the Build Back Better plan finds that the package will cost an estimated $4.8 trillion over 10 years if all provisions are made permanent—double the price tag applied by the CBO last month.”
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“several key parts of the bill are designed to game the CBO’s method for scoring the cost of legislation by setting arbitrary expiration dates even though lawmakers obviously intend for those policies to be permanent fixtures. Probably the best example is the expanded child tax credit, which would expire after just a single year. Other parts of the bill, including the universal pre-K funding and new subsidies for child care, would expire after six years. Expanded subsidies through the Affordable Care Act would last until 2025.
With all those gimmicks in place, the CBO assessment of the bill projects that it will cost about $1.8 trillion and add about $367 billion to the deficit over the next decade.
If all the Build Back Better plan’s proposals were made permanent, however, the final price tag would be $4.8 trillion, and the bill would add about $2.8 trillion to the deficit, according to the CRFB.
“To be sure, lawmakers may choose not to extend some or all of these provisions,” the CRFB analysis states. “However, if they do, they would need to more than double current offsets in order for the bill and the extensions to be paid for. The alternative would be a substantial increase in the debt.””
“The $1 trillion infrastructure bill that President Joe Biden signed into law..dumps a lot of new money into existing highway programs to be spent by state departments of transportation (DOTs).
The price tag of the bill—which includes $550 billion in new spending, $110 billion of which is earmarked for highways and bridges”
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“by mostly topping off existing programs, it will largely maintain a status quo where some states deploy their highway dollars effectively, while others continue to set them on fire in the hopes that that will produce better roads.”
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“That would include places like New Jersey, which ranked last in a report on state highway performance released by the Reason Foundation today.
The Garden State, per the report, spent $1,136,255 per mile of state-controlled road in 2019 while also having some of the worst urban congestion and pavement conditions in the country.
That’s well above more cost-effective states like Virginia. It managed to spend only $34,969 per mile of state-controlled roads while also having above average pavement quality and slightly worse-than-average congestion. (Virginia ranked second overall in the Reason highway report, right behind North Dakota.)”
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“Feigenbaum says part of New Jersey’s high expenditures can be chalked up to the high design quality of its highways, which have generally wider lanes and straighter curves in order to improve safety. (It ranks fourth in the Reason report in terms of overall fatality rate). But he also says a lot can also be explained by a cronyist state DOT that’s dominated by political appointees.
A state like Virginia has been able to keep up road quality while keeping overall road spending in line by having a more professionally run DOT, he says. It also makes heavy use of public-private partnerships, whereby private companies put in their own capital to rebuild or expand highways in return for being able to charge tolls on the lanes that they build, says Feigenbaum.
In keeping with its “spend more on the same old programs” nature, Biden’s new infrastructure bill does remarkably little to advance public-private partnerships or expand the interstate tolling that supports them.
The infrastructure bill does increase the amount of private activity bonds (tax-exempt bonds issued by a private company to fund an infrastructure project) that can be issued from $15 billion to $30 billion. It also reauthorizes a handful of limited programs that allow states to use tolls to reduce congestion or rebuild bridges. But it leaves in place a general prohibition on tolling interstate highways.
The overall trend in highway spending over the past decade has been higher spending and marginally improved roadway quality, says Feigenbaum, with some states standing out for either their innovations or their wastefulness.
The new infrastructure bill will likely produce more of the same.”
“About $550 billion of the $1.2 trillion law is new spending, which will be spread out over five years. The remaining $650 billion in the bill would have been allocated for existing transportation and highway programs under previously planned funding.
The new money in the bill will go toward a wide range of projects, including road repairs, high-speed internet services, and investments in electric buses. Notably, the infrastructure bill was backed by both Democratic lawmakers and some Republicans, and was the culmination of years long attempts to advance infrastructure legislation that’s spanned presidential administrations.
While it’s a landmark investment, the legislation only authorizes a fraction of the funding required to tackle the entirety of the US’s infrastructural challenges. Across specific categories of the bill, including lead water pipe replacement and broadband, it’s likely to take much more than what’s already been allocated to fully solve issues of access, safety, and equity. The bill includes $15 billion specifically for addressing lead pipes, for instance, while experts believe it will take $60 billion to actually replace every lead pipe in America.
Still, the passage of this bill — which contains critical funding that the country has needed for decades — is significant, and an important down payment for future investments.”
“The bill, H.R. 3684 (117), is historic in its scope with $550 billion in new money funneled into hard infrastructure, from overhauling bridges to supercharging Amtrak’s most popular rail corridor in the Northeast. But it falls far short of Biden’s original vision, which promised to dramatically reduce the climate impacts of transportation, the single largest source of pollution. In the end, the final product was the victim of the bipartisan focus it took to get the bill done and is an example of the razor thin governing majority Democrats must navigate.”
“inflation is real. The all-item consumer price index (CPI) was up more than 5 percent on a year-over-year basis for July, August, and September, and now shows a 6.2 percent increase for October—the largest jump since 1990. The Fed considers 2 percent inflation to be its bright-line monetary policy goal. Obviously, there is a large gap between that and what we are seeing on the ground.”
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“Individuals whose salaries, wages, Social Security payments, and even mortgage interest or rental rates are automatically adjusted for inflation have much less to worry about than their neighbors on fixed salaries, who must cope with ballooning grocery bills or pay twice as much at the pump. On these grounds, inflation may be devastating for some and almost meaningless for others. These gaps widen as inflation gets worse.”
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“The rate of inflation gets captured in interest rates that borrowers must pay, especially for longer-term debt. Lenders hope to be paid back with at least as much purchasing power. If they believe inflation will tick away at 4 percent, interest rates tend to rise with this baked-in expectation.
In any case, higher interest rates mean higher interest costs on all forms of public and private debt. As a result, mortgage rates will rise, all forms of construction will suffer, and businesses will postpone making large investments in plants and equipment.
Now consider the public debt—especially the federal debt that ballooned from large deficits in recent years. (In 2020, federal revenues were $3.4 trillion and spending was $6.6 trillion.) The interest cost of the national debt in 2008 was $253 billion and remained at about that level through 2015. Even though the debt doubled in those years, sharply falling interest rates and low inflation worked to contain costs.
But that was yesterday. With today’s higher inflation and rising interest rates (perhaps with more to come), the Congressional Budget Office (CBO) estimates the interest cost of public debt to be $413 billion in 2021. Obviously, any dollar spent on interest cannot be spent on government benefits and services to taxpayers.”
“Outside experts have estimated that as much as $75 billion should be spent over 10 years on public health infrastructure, preparedness, and prevention.
The revised Build Back Better legislation totals roughly $10 billion in public health infrastructure and pandemic preparedness funding over the next few years — a down payment on better readiness, in Democrats’ view, but one without assurance of future installations.
“All too often, when there’s a crisis, the reaction is to put money into public health. Once the crisis subsides, the funding tends to dry up,” Ron Bialek, president of the Public Health Foundation, told me. “This is not a recipe for success.””
“The larger spending package would increase government debt at a faster rate, which would increase the amount the government has to pay in interest. In the $3.5 trillion scenario, higher levels of spending and higher amounts of government debt “crowds out investment in productive private capital. Less private capital leads to lower wages as workers become less well-equipped to do their jobs effectively,” the report states.
Now, the PWBM has completed an analysis of the $1.5 trillion framework that Manchin reportedly offered as an alternative. In order to do the estimate, PWBM analysts assumed that Manchin’s proposal would increase spending by about $540 billion for means-tested childcare programs, like universal pre-K; $439 billion for a five-year extension of the expanded Child Tax Credit; $260 billion for public infrastructure; and $260 billion for other assorted government spending.
That’s still a lot of money, and there are still some negative long-term consequences—but the most important part of Manchin’s proposal is that it does not require additional borrowing, and relies on smaller tax increases than what President Joe Biden has proposed. As a result, government debt would actually fall slightly over the next 30 years. The tax increases would reduce private capital by less than 1 percent by 2050—as opposed to the 6.1 percent drop that would come with the passage of the larger reconciliation package. Wages and national GDP would remain flat under the $1.5 trillion plan, instead of the projected decline under the $3.5 trillion plan.
What the report essentially says is that Manchin’s proposal would be less bad than the $3.5 trillion proposal.”
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“It is a little bit crazy that everyone in Washington is talking about $1.5 trillion as a small sum of money. What Manchin is willing to support would cost about $500 billion more than the Obama stimulus, even after adjusting for inflation. And this isn’t an emergency spending plan meant to float the country through a recession—it’s a massive increase in government spending at a time when the economy is growing significantly (despite the weirdness in labor markets and supply chains).”