The White House has released details on the bipartisan infrastructure bill. The deal includes $550 billion in new federal investments in America's infrastructure over five years. President Biden's initial proposal was $2.25 trillion. Still, with a heavy price tag and only a summary of the plan made public, Newell has some concerns. He spoke with Chris Edwards of DownsizingGovernment.com to figure out where the money for these projects is coming from.
"What exactly can we expect from this bill, because I understand that the legislative text is not there? Is that correct?" Newell asked.
Edwards said, "We have a general idea. There's two buckets of spending here. There's a lot more spending on things that state governments are already spending on, like highways and transit. On that spending, I would say, well why did we need the federal government to do it? States can spend more on their own infrastructure anytime they want. And then the second bucket is spending on, what I would call corporate welfare, $73 billion for electric utility company, $65 billion for internet broadband companies... I would ask, do we really want the federal government getting involved in subsidizing corporations? I think that's very bad precedent."
Newell said, "Do we not know how much of the funding for roads and bridges and related projects is actually in the federal highway system as opposed to the state highway system?"
"From the time of the 1956 acts under Eisenhower, the interstate system was completed more than 40 years later with mainly federal money. No one would disagree that it was a good investment. I am arguing that this bill increases highway spending above and beyond the regular amount that the states and the federal government is spending. I would also say, if states want to boost spending on their own highway system, then they should do it themselves."
"It seems a little lofty to expect that there won't be a tax increase to come from this bill, doesn't it?" Newell asked.
"Apparently a few hundred billion dollars that is going to be used to fund this is money was passed for the pandemic that has not been used, and lawmakers are sort of presenting it as if it's free money. If there's a few hundred billion dollars that we authorized for the pandemic that we didn't use, well, we should give it back to taxpayers or we should pay down the federal government debt. It's not free money. That's the great problem here. We have too many lawmakers who are buying into the idea that this is free and we can continue this spending spree forever without consequences. We're heading for a giant financial crisis, both parties are culprits here. I think passage of this infrastructure bill is going to lead to even more spending down the road.
Newell said. "Do we know whether or not the government is going to require the states and local governments to have some skin in the game to access this money? Or is this money just going to be a gift?"
"Historically most federal aid programs require some skin in the game by state government. Highway projects, they've been traditionally 50-50. The state goes out and spends a hundred million on highways and the feds will cover half of that. I suspect that each one of these additional spending amounts will have different amounts of state required spending. That's not necessarily a good idea, because states will actually spend more than they really need."
Hear the entire interview in the audio player below.
