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Who Pays for Biden’s Infrastructure Bill?

— April 12, 2021

If Biden’s infrastructure bill becomes law, someone will have to pay. It should be those who most benefit from it. (Spoiler: If it doesn’t pass, we’ll still pay.)

History doesn’t repeat, but it certainly rhymes, and here we are again with a President pushing a giant infrastructure bill. Because Joe Biden has a “D” by his name, the same Republicans that praised former President Trump’s infrastructure happytalk will say we don’t need and can’t afford it, just like they did under Obama. We’ll have arguments where the GOP is uncomfortable with the suggestion that water pipes could ever really be considered infrastructure, while the Democrats think childcare counts. They can agree on one thing, though, and that’s to ignore the infrastructure trap.

It’s a story as old as civilization. As a society grows, problems develop, like needing more water to irrigate more crops to feed more people. Solutions, such as aqueducts or pipes, are costly, but the benefit they provide is such a jump in productivity that the cost is more than justified. Unfortunately, over time, the structures decay, and people either have to continue paying for maintenance while receiving no net increase in productivity, or to abandon the structures if they can’t afford to maintain it anymore or prefer to invest their resources elsewhere. Diminishing returns mean that eventually, it all costs too much to maintain, and that’s one way a society collapses.

Biden’s infrastructure bill, “The American Jobs Plan,” certainly addresses the traditional road and bridge repairs that are needed after years of budget cuts and austerity measures. While Republicans would prefer to stop there, Biden’s plan also focuses on other needs in a modern economy, such as providing high-speed internet to all Americans, upgrading hospitals, and building affordable housing. Texans should certainly understand why an updated electrical grid would be a good idea, and Flint isn’t the only American city that needs to replace lead pipes. Plus, it’s amusing to see Republicans reflexively recoil from Biden’s plan to encourage cities to rescind some zoning regulations, as if they suddenly like “big government” again.

Concrete slabs tilt at odd angles with cars in disarray.
Cars are turned over and pieces of highway and concrete are everywhere after the I-35W bridge collapsed in Minneapolis, Minnesota (USA) on August 1, 2007. Photo by Tony Webster, courtesy of Wikimedia Commons. CC BY 3.0

While some of these expenditures stand a decent chance of improving American productivity (instead of simply maintaining the status quo), there is always the question of who will pay for it. We can count on the GOP to faithfully safeguard the purses of the wealthy when it comes to any expenses that might improve the commons for all. Democrats, however, are suddenly concerned about keeping wealthy suburbanites and corporate donors loyal. Biden plans to fund the infrastructure bill in part by raising corporate taxes from 21% to 28%, a far cry from the 52% they paid when Eisenhower’s interstate highway system was built, in an era that many a red-hat wearer wanted to return to not so long ago.  (Trump cut it down from 35%.)

If building and maintaining infrastructure is about gaining or keeping a more productive society, then it’s fair, even obligatory, to use a portion of those gains to pay for it. Capital expenses ought to justify themselves. Who financially benefits from being able to transport goods over well-maintained roads and bridges? Who benefits, really, from leveraging the labor of workers freed up to return to work because they know their children are safe? When infrastructure is provided at public expense to benefit businesses, how is that not the pop definition of socialism that Republicans love to hate? If you’re afraid of voters (“corporations are people, my friend”) figuring out that they can give themselves free stuff, why not be proud of taxing a portion of the benefits that accrue to them to pay for it?

Alternatively, we could simply decide that we’re not going to make America great again and we never will. Maybe the Republicans are right: we can’t afford to maintain our infrastructure anymore, let alone improve upon it. Is this the GOP finally admitting that the United States is in terminal decline, with resource depletion, climate change, and peak oil catching up with us, and that our best and only hope is to form a dark age feudal state with the likes of Bill Gates, George Soros, and Nick Hanauer as the noble lords for whom we must tug our forelocks?

Either way, we’re on the hook for the choices we make. If this infrastructure bill becomes law, we must consider how we’ll pay for it, not only this year but as long as we want to maintain the benefits it would bring. Or, if we decide that modern infrastructure is simply unaffordable, we have to consider how we’ll pay to solve different problems going forward, when many of our outdated bridges, hospitals, and electrical grids don’t work anymore. Choose wisely.

Related: Trump and the Infrastructure Trap


FACT SHEET: The American Jobs Plan
Biden Plan Spurs Fight Over What ‘Infrastructure’ Really Means
Biden’s innovative idea for tackling skyrocketing housing prices
Biden’s infrastructure tax hike worries some Democrats about impact on wealthy voters

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