Michael Bloomquist, legislative and government affairs partner with the law firm of Venable LLP, discusses the politics of, and prospects for, passage of the $1 trillion-plus infrastructure proposal put forth by the Biden Administration.
As it considers the Biden infrastructure plan, Congress is currently on “two tracks,” says Bloomquist: a $1-trillion bill to develop “hard” infrastructure such as bridges, roads, airports, ports and railroads, and a proposal for funding “soft” infrastructure in the form of social initiatives such as paid family leave, extension of the childhood tax credit, increase in personal income tax for households earning more than $400,000 a year, and inclusion of vision and dental coverage in Medicare.
The first proposal had won bipartisan support, with multiple funding mechanisms subject to Congressional Budget Office approval. But it reached a roadblock when Republicans balked at a plan to boost funding for the Internal Revenue Service in order to prevent tax cheats. Legislators are “still trying to figure out how to fill that hole,” Bloomquist says.
The “soft” proposal is solidly opposed by Republicans and would have to be passed entirely with Democratic support, which is unlikely in an evenly divided Senate under threat of filibuster, and a mere four-vote majority in the House of Representatives.
What’s unlikely to be approved as a continuing source of funds for infrastructure development is a higher federal gas tax, which traditionally has been the basis for the Highway Trust Fund. The gas tax hasn’t been raised since 1993. Nor does Congress seem amenable to creating a tax based instead on vehicle miles traveled
Where that leaves the entire issue is uncertain, although Bloomquist predicts that the “hard” infrastructure measure will progress by “baby steps” through the remainder of the summer, then be passed at year’s end.
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