How a new infrastructure package could impact Rural America
The most recent infrastructure package is more than roads, bridges, water projects and connectivity. If anything, the scope seems destined to grow. The funding mechanism remains controversial, casting some doubts about whether all 50 Democrats in the U.S. Senate or any Republicans will support it.
If you’ve actually jumped in a vehicle and driven across large sections of the U.S., it’s pretty easy to be convinced that we need to invest more in our nation’s infrastructure. Many of our interstate highways are speckled with cracks and potholes and some are so crowded with cars and semis that they easily turn into traffic jams
Add in the bridges and waterways that desperately need repair, along with long overdue improvements needed for rural broadband and clean water projects , and you’ve got a pretty strong case for a big infrastructure package that both Democrats and Republicans might be able to support. For American agriculture, it’s critical to invest in ways that products can leave the farm gate and efficiently move to other domestic and international markets.
However, the most recent infrastructure package is more than roads, bridges, water projects and connectivity. If anything, the scope seems destined to grow. The funding mechanism remains controversial, casting some doubts about whether all 50 Democrats in the U.S. Senate or any Republicans will support it.
The initial $2.25 trillion infrastructure package proposed by President Joe Biden will have a heavy focus on climate policy and include substantial new funding for rural broadband, according to a fact sheet released by the White House, but that’s not all.
Biden’s “American Jobs Plan,” includes $621 billion for transportation, including roads, bridges, electric vehicles and waterways, plus $100 billion to ensure that the entire country has access to broadband.
Another $16 billion is earmarked for port and waterway improvements.
The “plan will modernize 20,000 miles of highways, roads, and main-streets. It will fix the ten most economically significant bridges in the country in need of reconstruction. It also will repair the worst 10,000 smaller bridges, providing critical linkages to communities,” the White House says.
An additional $50 billion is set aside in the plan for climate resilience projects. The funding could be used in part for “agricultural resources management and climate-smart technologies” and forest management, according to the White House fact sheet.
Another $5 billion is earmarked for rural development. This program will empower rural regions by supporting locally-led planning and capacity building efforts, and providing flexible funding to meet critical needs,” the fact sheet says.
Other parts of the proposal include:
Build, preserve, and retrofit more than two million homes and commercial buildings, modernize our nation’s schools and child care facilities, and upgrade veterans’ hospitals and federal buildings.
Solidify the infrastructure of our care economy by creating jobs and raising wages and benefits for essential home care workers.
Revitalize manufacturing, secure U.S. supply chains, invest in R&D, and train Americans for the jobs of the future.
Replace 100% of the nation’s lead pipes and service lines.
Create good jobs electrifying vehicles, including converting all of the federal fleet of vehicles to electric.
Put the energy industry to work plugging orphan oil and gas wells and cleaning up abandoned mines.
To pay for the plan, Biden proposes to increase the corporate income tax from 21% to 28% and to take other steps to prevent companies from avoiding U.S. taxation. Biden also wants to increase the global minimum tax for corporations and calculate the rate “on a country-by-country basis so it hits profits in tax havens,” the fact sheet says. A potential change in the capital gains tax is not mentioned in the White House document but has been referenced by some Democrats as a possible “pay for.”
If the final legislation includes tax increases, Democrats will almost certainly have to move it through Congress using the budget reconciliation process, which means they would need no GOP support for the bill in the Senate as long as all 50 Democrats vote for it.
“The only way that they (Democrats) see that they can continue to authorize this kind of spending is to include tax increases,” Arkansas Rep. Rick Crawford, a senior Republican on the Transportation and Infrastructure and the Agriculture committees, told Agri-Pulse.
“And that's where we're gonna have some heartburn, because we don't have a tax problem, we have a spending problem.”
Missouri Rep. Sam Graves, the top Republican on Transportation and Infrastructure, issued a statement saying infrastructure spending needs to be targeted and offset by spending cuts elsewhere in the federal budget.
“We need to take a hard look at where the most significant backlogs are and invest in transportation projects that will actually make a difference. We simply cannot afford another Green New Deal disguised as an infrastructure bill,” he said.
Senate GOP Whip John Thune of South Dakota suggested Republicans were also unlikely to help pass an infrastructure bill, even if Democrats place the tax increases that pay for it in a separate reconciliation measure. “I don't think our guys are going take the bait on that,” he told reporters.
But even some Democrats are pushing back on the potential tax increases. Earlier this week, Sen. Joe Manchin, D-W.V., told West Virginia radio host Hoppy Kercheval on Metro News that Biden’s plan to pay for infrastructure by raising the corporate tax rate to 28% is literally a bridge too far and that he thinks the top rate should be 25%. He also said that six or seven other Democrats also are opposed to the package as currently proposed.
But if Democrats can find a “sweet spot” on the infrastructure package that wins support from those Senators who are now holding out their support, they will likely be able to move the bill without any Republicans.
The Senate parliamentarian offered a big break to the chamber’s Democrats on April 5. According to a spokesman for Senate Majority Leader Chuck Schumer, D-N.Y., the parliamentarian “has advised that a revised budget resolution may contain budget reconciliation instructions.”
That could allow Democrats to use the reconciliation process to move another bill without support from Senate Republicans. “While no decisions have been made on a legislative path forward … the Parliamentarian’s opinion is an important step forward that this key pathway is available to Democrats if needed,” the spokesman added.
Editor’s note: Philip Brasher and Steven Davies contributed to this column. Wyant is president and founder of Agri-Pulse Communications Inc. For more news, go to www.Agri-Pulse.com .