In wrapping up our three-month long series on the ABCs of the AJP that commenced on Earth Day, we offer some final reflections on the progress and outlook for this monumental public policy initiative.
- First, consistent with the subject matter of this blog, the twenty-six alphabetical posts that we published since mid-April focus on the broad array of energy and environmental infrastructure objectives of the AJP. We did not address in depth two of the other core infrastructure elements of the AJP — namely digital infrastructure (high-speed broadband) and social infrastructure (education, housing, health, social services to support the “care economy”). Nor did we address President Biden’s companion American Families Plan that proposed an additional $1.8 trillion mix of federal spending and tax credits in support of the care economy or his Made in America Tax Plan that would raise $2 trillion in revenue to fund the AJP and Families Plan. The AJP and Families Plan blueprints, together with the enacted $1.9 trillion American Rescue Plan for COVID-19 relief comprise the $6 trillion ambition of President Biden’s “Build Back Better” policy agenda. As such, although the AJP is massive in its own right, anyone seeking to analyze and understand the full scope and prospects of the AJP should consider it in the context of the larger whole that comprises the Administration’s integrated set of major policy priorities for transforming the American economy and society.
- Second, legislating is not a linear process. As the AJP began to move from blueprint to legislation, House and Senate bills touching on various elements of the AJP proliferated like mushrooms on a cool summer night. While members in both houses of Congress and on both sides of the aisle have introduced scores of bills vying to be part of the final legislative package, as of this writing the path forward appears to have winnowed to a dual track of two legislative “vehicles” for which much bill drafting still remains to be completed.
- Track one is the $1.2 trillion Bipartisan Infrastructure Framework which was initially negotiated and published in late June with the support of 21 senators (split among 11 Republicans, 9 Democrats and one independent) and promptly endorsed by President Biden. Following the initial fanfare, the bipartisan effort nearly wrecked in the ensuing four weeks on the road from framework into legislation due to intraparty and partisan debates over some of the scope but principally over the “payfors.” However, after intense negotiations the coalition appears now to have put enough legislative flesh onto the original framework bones to enable the Senate to approve on a 67-32 vote moving forward with full Senate debate and amendments to an initial House bill R. 3684 seeking to implement the framework. A White House fact sheet detailing the revised bipartisan framework summarizes $550 billion of new spending including the following:
- $110 billion for roads, bridges and other major projects;
- $11 billion in transportation safety programs;
- $39 billion in transit modernization and improved accessibility;
- $66 billion for rail transport;
- $7.5 billion to build a national network of electric vehicle chargers;
- $7.5 billion in electric busses and ferries;
- $42 billion in airports and port infrastructure;
- $65 billion in high-speed internet broadband infrastructure for rural and other disadvantaged areas of America;
- $50 billion to make communities safer and more resilient against extreme weather, climate and cyber risks
- $55 billion in water infrastructure including to remove lead pipes and PFAS contamination;
- $21 billion in environmental remediation; and
- $73 billion in power infrastructure and clean energy transmission.
As such the bipartisan framework addresses many of the AJP’s components but falls considerably short of meeting the AJP’s full ambitions to address climate change and essentially ignores investments in the care economy. And the “payfors” in the bipartisan framework come from repurposing some COVID relief funding and a hodgepodge of aspirational sources without proposing any new taxes or tax increases. Accordingly, although President Biden has endorsed the bipartisan framework, he also has committed to support a second track that would enact other portions of the AJP and portions of the Families Plan.
- Track two is a Senate Democratic-led budget resolution that is still evolving, albeit quickly. While initial estimates of the size and scope ranged between $1 trillion and $6 trillion, Senate Democrats appear to be coalescing around a $3.5 trillion budget reconciliation package. However the details are far from ironed out and holding together the entire Democratic caucus will remain a high-wire act. The final contours will be shaped and bounded by whatever compromise can be reached between the progressive and centrist wings of the Democratic Party on a resolution that will draw a majority vote in the House and passage in the Senate under the budget reconciliation procedure with a favorable vote from a minimum of 50 senators (presumably only those who caucus with the Democrats). As a budget measure, this will be the vehicle to implement any meaningful new taxes or tax increases, likely over Republican opposition, to pay for the infrastructure spending. But also as a budget measure, this legislative vehicle cannot carry non-fiscal matters. This poses a structural challenge for including the AJP’s proposed federal clean energy standard that we described in an earlier post and that is not included in the bipartisan framework.
Between now and August 6 when the Senate recesses until after Labor Day we will see “make or break” efforts by Senate Majority Leader Schumer and Speaker Pelosi to herd and coalesce their respective members around legislative language that can accomplish both tracks of President Biden’s agenda with the expectation of final votes after Congress returns from recess.
- Third, legislation is a beginning, not an end of government policy engagement. Regardless of the contours of final AJP legislation, if and when it is enacted, Congress inevitably will leave vast ambiguities and details to be resolved by administrative rulemaking, agency implementation guidance and likely an array of administrative and civil litigation. All stakeholders in the AJP, whether disappointed or pleased with the final legislative product, will carry forward myriad policy debates in these regulatory and judicial forums. So opportunities for continued policy engagement will be robust and, accordingly, we will continue to follow and write on these developments.
- Fourth, despite the divisiveness and rancor that have plagued American politics, the unfolding process seeking to enact the AJP is an object lesson in the fundamental optimism that historically has imbued American government and society. “Build Back Better” embodies that optimism. While acknowledging that some in the world may like to see the United States democracy falter, President Biden in his April 28 Statement to a Joint Session of Congress urged that “we have to prove democracy still works — that our government still works and we can deliver for our people” and that, “if … “We the People” … all do our part … we will meet the center challenge of the age by proving that democracy is durable and strong … the future belongs to America.” He concluded by adding “it’s never, ever been a good bet to bet against America … There is not a single thing — nothing — nothing beyond our capacity. We can do whatever we set our mind to do if we do it together.”
President Biden doubled down on this optimism in his June 24 statement in support of the bipartisan framework. Per the White House Statement, “The President came into office promising to find common ground to get things done – and he’s delivering on that promise… [He] believes that we must invest in our country and in our people, creating good-paying union jobs, tackling the climate crisis, and growing the economy sustainably, and equitably for decades to come … [He also] believes that we that we are at inflection point between democracy and autocracy. At this moment in our history, President Biden believes we must demonstrate to the world that American democracy can deliver for the American people … But democracy requires compromise … [Accordingly, the] President calls on Congress to pass the Bipartisan Infrastructure Framework and send it to his desk, and pass a budget resolution and legislation that makes his full Build Back Better vision a reality.”
- Fifth, the importance of the AJP’s combined lofty ideals of self-governance with the gritty ambition to fund economy-transforming hardscape can be seen in the larger international, geopolitical context. As we first noted in our Earth Day post, the AJP targeted solutions to the twin “great challenges of our time: the climate crisis and the ambitions of an autocratic China.” It was no coincidence that the White House launched the AJP prior to President Biden’s Leaders Summit on Climate on Earth Day which was a warmup for the June 11-13 G7 Summit in Cornwall in which President Biden sought to reassure the World that “America is Back.” That Summit culminated in the Carbis Bay Communiqué in which the leaders of the G7 democratic nations announced a joint agenda of global action to:
- Reinvigorate our economies by advancing recovery plans that build on the $12 trillion of support we have put in place during the pandemic;
- Secure our future prosperity by championing freer, fairer trade within a reformed trading system, a more resilient global economy, and a fairer global tax system that reverses the race to the bottom;
- Protect our planet by supporting a green revolution that creates jobs, cuts emissions and seeks to limit the rise in global temperatures to 1.5 degrees; and
- Harness the power of democracy, freedom, equality, the rule of law and respect for human rights to answer the biggest questions and overcome the greatest challenges.
The message was distilled into a shared “Build Back Better World (B3W) Partnership” as a counterweight alternative to China’s Belt and Road Initiative (BRI). So as Congress continues its non-linear legislative process that demands compromise, the larger geopolitical context should be a patriotic unifying factor to help forge final AJP legislation.
In conclusion, while the hurdles of vigorous, tense, political and policy negotiations and detailed bill drafting still remain, there is reason to be confident that over the next three months this Congress will pass, and President Biden will sign, a version of the AJP that will materially alter the size and impact of the federal government on the American economy and society. This legislation will set the stage for years of further regulatory proceedings, negotiated transactions, and a variety of litigation involving major stakeholders seeking to leverage the AJP’s legislative outcome. This is how democracy works. Just as Amanda Gorman so eloquently pronounced about America in her Inaugural poem, “The Hill we Climb”, likewise the AJP is “not broken, but simply unfinished.” There is much more to come.