Biden’s Infrastructure Bill Takes Spending Way Off Track | Citizens Against Government Waste

Biden’s Infrastructure Bill Takes Spending Way Off Track

The WasteWatcher

As President Biden travels around the country promoting his $2.25 trillion American Jobs Plan, the proposal is being called everything from a “Once-In-A-Generation' Infrastructure Proposal” to a “Trojan Horse” that is going to be more borrowed money, and massive tax increases on all the productive parts of our economy.”  Two aspects of the legislation are undisputed:  It will be the largest “infrastructure” bill in history and the cost will place another burden on future generations to pay for this spending spree.

The American Jobs spending package will be added to the $5.7 trillion that has been spent just on COVID-19 “relief” since the CARES Act was signed into law on March 27, 2020.  The national debt is now at $28.1 trillion with a federal debt to GDP ratio of 129.9 percent, higher than the 118 percent following World War II.  Trying to comprehend the size of these numbers is difficult but think of it this way.  If someone received  $1.00 per second, never stopping to sleep or take a break, it would take 32,000 years to reach $1 trillion.

A November 2018 Congressional Research Service (CRS) policy paper, “Infrastructure Investment and the Federal Government,” stated, “The current federal role in infrastructure investment is important but limited in size and scope.”  While CRS admits that there is no agreed to definition for infrastructure investment, and it has become more malleable in recent years, it did state that “federal government is an important investor in two infrastructure sectors:  transportation and water resources, which includes dams and levees.  In 2017, according to the Congressional Budget Office, the federal government spent $84 billion on transportation and $10 billion on water resources, whether directly or by making grants to nonfederal entities” and that, “State and local governments spent far more than the federal government on transportation and water resources infrastructure.  State and local governments also spent much more than the federal government on drinking water and wastewater utility infrastructure.”

In 2015, Congress passed and then President Obama signed into law a $305 billion five-year infrastructure bill, the largest in more than a decade, that included funding for roads, bridges, and railways.  The most significant unrelated provision was a reauthorization of the Export-Import Bank.  There was no dispute or discussion that non-traditional infrastructure projects were included.  The Biden proposal goes far beyond this “normal” process and turns on its head infrastructure spending.

The American Jobs Plan includes $590 billion for manufacturing, research and development, and job training, all of which has been considered separately from an infrastructure bill.  There is $126 billion to build energy efficient housing and $12 billion to improve technology and facilities at community colleges, among many other expenditures that go far beyond any previously imagined definition of infrastructure.  Unless, of course, one believes Sen. Kirsten Gillibrand (D-N.Y.)’s magical thinking when she tweeted, “Paid leave is infrastructure. Child care is infrastructure. Caregiving is infrastructure.”    

The current plan is to pass the American Jobs Plan by the fall, with spending spread over eight years, paid for in 15 year through the $4 trillion “Made in America” tax plan.  Among other changes in the tax code, Treasury Secretary Janet Yellen announced that the corporate tax rate would increase from 21 percent to 28 percent.  The Tax Foundation reported that the Biden plan would make U.S. corporations pay the highest tax rate than in any other country in the Organization for Economic Cooperation and Development (and China) and would lead “to less investment, less productivity, fewer jobs, and lower wages.”

Never letting a serious crisis go to waste or an opportunity to continue his status as the most “progressive” (i.e., biggest-spender) President in history, Mr. Biden has added healthcare to the definition of infrastructure. 

The largest healthcare-related proposal is $400 billion to expand access to home and community-based services (HCBS) and extend the longstanding Money Follows the Person program that is supposed to support innovation in the delivery of long-term care.  Medicaid’s mandatory spending levels are currently estimated to be $507 billion in 2021 and are expected to be $705 billion in 2030.  Taxpayers can expect that 2030 number to be much higher if the proposal should be signed into law.

The jobs plan also mentions putting in place “infrastructure to create good middle-class jobs with a free and fair choice to join a union” by expanding HCBS under Medicaid.  The administration claims the result would be the creation of well-paying jobs with benefits for caregivers.  Whether the increased wages are tied to the on-going effort to raise the minimum federal wage from $10.95 to $15.00 per hour, union negotiations, or Medicaid mandating a minimum salary for caregivers is not clear at this time.

When the government rings a $2.25 trillion dinner bell, special interests will come to get their share of the pork.  LeadingAge, an association that represents more than 5,000 nonprofit aging services, like long-term care facilities, has made several demands of the administration.  According to an April 1, 2021 Inside Health Policy column, the organization has asked that the Federal Medical Assistance Percentage (FMAP) 10 percent increase in the federal Medicaid match for home and community-based and nursing home services be made permanent, require that the HCBS becomes a mandatory Medicaid benefit, and to invest funds in career pathways, training programs, and provide loan forgiveness opportunities.

The $1.9 billion American Rescue Plan (ARP), the largest stimulus package ever passed and signed into law on March 11, 2021, included the one-year FMAP increase of 10 percent.  Citizens Against Government Waste (CAGW) predicted at that time that the copious amounts of temporary government handouts scattered throughout the $1.9 trillion budget-busting stimulus package would be made permanent.

The American Hospital Association made its play for funds in a March 31 letter stating, “Now, more than ever, federal investment is needed to ensure hospitals are able to meet the health care needs of patients and continue to be a source of jobs and economic stability in their communities, and often their largest employer.”  The organization calls for investing in hospital and health systems infrastructure and says the COVID-19 pandemic “experience reinforces the need for sustained federal investment to support increased capacity for emergency preparedness and response.”  The organization also called for strengthening the healthcare workforce, more digital and data infrastructure to expand healthcare practices, like telehealth, and upgrading and maintaining hospital computer systems.

The infrastructure plan also provides $30 billion over four years to invest in “medical countermeasures manufacturing; research and development; and related biopreparedness, and biosecurity” that would include developing Phase I and Phase II vaccine clinical trials and shoring up the nation’s strategic national stockpile.  There is also an initial investment of $10 billion to prevent future pandemics, citing the outbreaks of SARS, Ebola, and influenza and the funding would build on the funds found in the ARP.

The proposal also looks to upgrade VA hospitals with a price tag of $18 billion, along with $10 billion to modernize other federal buildings.

The American Jobs Act is far more than an infrastructure bill and much of this spending should be considered in separate spending bills that concern social welfare and general appropriations or not spent at all considering the nation’s dangerous debt level, and an economy that is ready to boom.  April’s Department of Labor Jobs report showing 916,000 jobs created proves no additional spending is needed that could increase inflation and raise interest rates.  The intention of the American Jobs Act is to permanently increase federal spending in a variety of areas, including healthcare, leaving taxpayers and institutions, like hospitals and long-term care facilities, more dependent on Washington, D.C. and politicians for their livelihood.  It is not only the largest spending bill ever of its kind, whatever it may be called, it is also another step forward in the Biden administration’s and Democratic Congress’s Far-Left, socialist and aggressive expansion of the size, power, and scope of the federal government.

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