Reconciliation Is No Way to Pay for Infrastructure

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Not unexpectedly, bipartisan talks on an infrastructure plan have proved to be complicated and contentious. Many Democrats are losing patience and urging their leaders to give up and go it alone. That would be a mistake. A deal with support from both sides is still possible, and remains by far the best way forward for the American economy.

At issue are the size of the plan, exactly what it should fund, and — most acrimoniously — how to pay for it. Last week, President Joe Biden dropped out of negotiations with one group of Republicans and struck up talks with a bipartisan group in the Senate, which is offering a deal with $579 billion in new spending. Several other proposals are also in play, with bargaining set to continue for at least another week or so.

Many progressives would prefer to pass a party-line bill through the Senate’s reconciliation process, which requires only a simple majority for budget-related measures. Representative Alexandria Ocasio-Cortez compared the current talks to “playing patty-cake” and asked if they were “worth the dismantling of people’s voting rights, setting the planet on fire,” and so on. Activist groups recently published a letter saying there was “no choice” but to move on, thanks to “unreasonable demands” from Republicans. 

In fact, far from being unreasonable, Republicans have offered numerous ideas that would improve the plan (such as repurposing unused Covid relief funds for public-works projects) while gradually giving ground on spending totals. The talks have been characterized more by the give-and-take of normal politics than bad-faith obstructionism. After years of Republican intransigence under Barack Obama, followed by Democratic “resistance” under Donald Trump, that’s commendable in its own right.

More important, though, is that reconciliation is a bad way to pay for infrastructure — and would undermine the Democrats’ own goals.

As a start, the rules of the process only allow for measures that affect spending and revenue. That means they would almost certainly prohibit Congress from transferring cash to the (nearly depleted) Highway Trust Fund — the normal way to pay for roads and transit — and require a complicated (and possibly doomed) workaround. They could also prevent tying funding to individual projects (including those, like a Hudson River tunnel, that command bipartisan support) and rule out reauthorizing crucial grant programs that help pay for things like maintenance backlogs. For the same reason, progressive hopes for new rules on clean energy or labor policy would almost certainly come to nothing.

Moreover, because reconciliation bills are normally restricted to a 10-year window, any qualifying project would in all likelihood need to either be completed in the specified timeframe or canceled at the end of it. That doesn’t bode well for Democrats’ long-term priorities such as high-speed rail, or any other big undertaking that would need to contend with federal red tape.

Finally, the Senate parliamentarian has reportedly stipulated that Democrats must have a “legitimate reason” for invoking reconciliation more than once in the same fiscal year. Quite how that will be defined is anyone’s guess, but it suggests that nearly every provision could be subject to partisan challenges. Representative Peter DeFazio, chairman of the House transportation and infrastructure committee, was hardly exaggerating when he called this process “arbitrary, capricious and stupid.”

Given the choice between compromising with Republicans and adopting this benighted procedure for minimal gain, the right course should be obvious. A bill that focuses on core green-energy and public-works projects and relies mainly on debt financing instead of new taxes — appropriate for a one-time surge of investment, with interest rates at historic lows — would help restore America’s infrastructure, break the partisan gridlock, support the jobs of tomorrow, and lay the groundwork for growth. That’s a deal anyone should take.

Editorials are written by the Bloomberg Opinion editorial board.

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