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60 Or Bust

Eakinomics: 60 or Bust

Votes, that is. If the Senate proceeds as advertised today, it will vote on a “motion to proceed” – a Senate procedure to take up a bill – that would allow consideration of the bipartisan infrastructure bill. As it turns out, there is not yet a deal. But the discussion surrounding negotiations has painted a pretty clear picture.

The bill would contain about $600 billion in new spending. Most of the attention has focused on the fact that it concentrates on “hard” infrastructure: roads, bridges, ports, waterways, multimodal connections, water infrastructure, and public transit. There is also money for “resiliency,” cybersecurity for critical infrastructure, flood mitigation, wildfire, drought, and coastal resiliency.

The bill includes some things that seem to an unnamed Eakinomics author like they might best be the responsibility of the private sector – money for low-carbon buses and ferries, electric vehicle infrastructure, power and grid dollars, and passenger and freight rail funds. But evidently the case has been made

Finally, the definition of infrastructure has been modernized to include broadband. This inclusion represents one lesson genuinely learned during the pandemic. Bridging the digital divide is a social imperative, but it is also an opportunity to improve labor productivity beyond the pandemic. The administration’s version of broadband funding has been restricted to the failed municipal broadband model; one hopes this package includes incentives for the private sector, which delivered enormous resiliency during the worst of 2020. Regardless, one would hope no infrastructure bill would go forward without broadband as one of its features.

Of course, the sticking point has been how to pay for this very large investment. There is an agreement to not touch the 2017 tax law, or raise taxes more generally. There is also an agreement to include an infrastructure bank, and both sides are looking to dynamic scoring to reduce the top-line budget cost.

More work evidently remains to be done. Today’s vote is a key moment in finding out whether that time will be permitted and the Senate will vote on a finished product.

Disclaimer

Fact of the Day

National house prices are 15 percent higher than at the same point last year.