"Slimming Edition" Infrastructure Plan Difficult to Solve America's Worries
Guan Jinyong
As the Fed’s monetary policy tightening is on the line, the Biden administration really needs fiscal stimulus to stabilize the US economy.
In just four months, the White House "shrinked" the size of its infrastructure program twice in exchange for the cooperation of Republicans.
But the unresolved infrastructure plans, the immense budget framework, and the penniless federal government have become problems facing Washington.
The White House "shrinked" the size of its infrastructure plan twice in four months, and finally received the cooperation of the Republicans.
On August 10, local time, the U.S. Senate passed an infrastructure construction bill with a total of about $1 trillion with 69 votes in favor and 30 votes against it.
But to what extent this "slimming" infrastructure plan can boost the U.S. economy remains a question mark.
After all, Washington has to face three problems: an unresolved infrastructure plan, a huge budget framework, and a penniless federal government.
In the US political arena, the Republican Party always criticizes the Democrats for "grabbing nothing."
Whenever the Democrats are in power, Republicans will definitely keep an eye on the "pocket of money."
Sure enough, as soon as the Biden administration came to power, it threw out an investment plan of more than 4 trillion US dollars.
For a time, the two parties were arguing, and the White House went all out to pass the infrastructure plan.
In a recent speech at a laboratory at the University of Maryland, U.S. Secretary of State Blincol said that investing in U.S. domestic infrastructure will maintain and enhance U.S. global competitiveness and influence.
Chief diplomats are rare to chant for domestic investment.
As the Fed's monetary policy tightening is on the line, the Biden administration really needs fiscal stimulus to stabilize the US economy.
In order to achieve its goal, the White House "cut prices" twice in just four months, trying to satisfy the Republican Party.
On March 31, US President Biden first announced the total infrastructure plan of about 2.25 trillion US dollars. He hoped that Congress would approve it this summer, but it was blocked by the Republican Party.
Subsequently, the White House unilaterally proposed to reduce the total amount to $1.7 trillion on May 21 as a concession to the Republican Party.
However, the Republican Party still opposes the "price cut" infrastructure plan.
Republicans say that the Republican and Democratic parties still need to negotiate. The biggest difference between the two parties is not the size of the infrastructure plan, but "what is the infrastructure?"
The Republican Party advocates that infrastructure only includes roads, bridges, ports, airports and broadband, but the Democratic Party will also include some social development projects that will never be regarded as core infrastructure.
As the Fed’s monetary policy began to tighten, the White House once again reduced it to about $1 trillion before it was passed.
This infrastructure plan is part of the Biden administration's massive federal spending plan.
The Biden administration hopes to transform the United States with more than US$4 trillion in federal spending. After Congress resumes, the Democratic Party will try to pass a US$3.5 trillion budget framework in Congress, which includes health education, response to climate change, and expansion of social welfare. Project investment.
Independent Senator Sanders, chairman of the Senate Budget Committee, said that this budget resolution will be the legislation that has the most impact on working people, the elderly, children, the sick, and the poor since President Franklin Roosevelt’s New Deal in the 1930s. .
Democratic Senate Majority Leader Schumer praised Biden for allowing the first major infrastructure construction plan in more than a decade to pass with the support of both parties, just seven months after taking office.
The Biden administration and the Democrats hope to pass their legislative agenda as much as possible before re-electing members of Congress in the midterm elections next year.
However, whether this $1 trillion infrastructure plan can pass the House of Representatives vote is still full of uncertainty, because a rift has been created between the progressives and the moderates within the Democratic Party.
It is expected that some of the content that has been taken out of the infrastructure plan will be stuffed into the 3.5 trillion US dollar budget plan.
The Speaker of the House of Representatives and California Democrat Pelosi said that the House of Representatives will not consider the infrastructure bill until the $3.5 trillion plan is also passed by the Senate.
After the above-mentioned infrastructure plan was passed on the 10th, Schumer, the leader of the majority party in the Senate and the Democrat of New York State, immediately started the Senate discussion of the US$3.5 trillion expenditure plan and budget outline.
It is expected that the relevant negotiations may be delayed, and the final vote will not be held until this fall.
Under special circumstances, the US$3.5 trillion budget resolution is expected to be passed.
If the House of Representatives passes a budget resolution of the same version as the Senate, Democrats can initiate a special process called “coordination” that enables them to pass legislation with a simple majority of the Senate, without having to obtain the majority of the bills needed to pass 60 ticket.
In this way, as long as the Democrats do not lose any votes in the Democratic camp, they can pass a $3.5 trillion plan in the evenly matched Senate without the support of the Republicans.
Both bills are pending.
At the same time, the Republicans’ worries about the Democratic Party’s “grabbing” are not groundless.
Two years ago, Congress voted to suspend the debt ceiling until July 31 this year.
If lawmakers cannot reach another agreement before then, the debt ceiling will be automatically restored and the Ministry of Finance will not be able to raise more funds through the sale of government bonds.
This means that the federal government is likely to run out of cash used to pay bills in August.
In other words, at the time of Daxing's investment, the US government ran out of money.
Treasury Secretary Yellen said that in order to solve the urgent need, the Treasury Department began to suspend debt issuance on the first Monday of August, and suspended investment in retirement funds for civil servants and postal employees and other measures to avoid breaking the federal government’s borrowing limit.
Senate Minority Leader McConnell, Republican of Kentucky, previously stated that Democrats should not expect any help from Republicans on the debt ceiling issue. Some Republican senators said: "They should not expect Republicans to support raising the debt ceiling. In order to adapt to their "yin eat Maoliang"."
Guan Jinyong