What’s next for the historic infrastructure and green energy bill?

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After months of negotiations, the Senate voted 69-30 filibuster to approve a $ 1 trillion infrastructure framework. The bill orders the repair of crumbling physical infrastructure such as roads and bridges, expansion of high-speed Internet access, replacement of lead water pipes, financial support for clean energy projects and improving weathering and cybersecurity of vulnerable infrastructure.

This author’s pet peeve: Electric vehicle charging infrastructure is worth $ 7.5 billion, accompanying a recent executive decree aimed at making electric vehicles half of all vehicles sold by 2030. The private sector – inundated with savings – would have to shoulder a much larger share of that burden.

For the transition from the internal combustion engine to be successful, charging stations must become as widespread and accessible as gas stations. Private companies such as Blink, ChargePoint, and EVgo have led the initial efforts to expand access, which will be necessary for transitioning manufacturers and EV newcomers to compete with Tesla.

TSLA
and its Supercharger network. Yet the financial might of GM, Ford and Tesla is more than capable of responding to the ubiquity and availability of charging stations, should they choose to scale it up. Expansion of charging infrastructure should not come primarily from the taxpayer’s pocket.

Full disclosure: I drive a Tesla and I have an interest in having more charging stations across the country.

Despite being priced less than the president’s $ 1.9 trillion pandemic stimulus package, the bill ranks among the costliest in American history. His passage represents bipartisan anxiety that the United States is falling behind authoritarian China, which has so far dominated the supply chain for modern batteries and rare earth elements. For Biden, the victory affirms his repudiation of Reaganomics and his belief that spending will generate growth. For critics, inflation and deficit growth are equal threats to all the goals of the bill, especially as the pandemic is weighing on the economy, with no end in sight.

And the Democrats may not be finished.

After winning nineteen Republican votes and breaking through the graveyard of legislation that is the United States Senate, Democrats traditionally prepare to send the bill to the House of Representatives, where it must pass by majority vote. simple to become law. Instead, President Nancy Pelosi put the brakes on, vowing that her caucus will not vote on the bipartisan framework until the “second way” bill passes through the reconciliation process.

This second lead is a $ 3.5 trillion spending bill on “human infrastructure” that Republicans and some Democrats do not deem necessary or financially prudent. The progressive wishlist includes Universal Pre-K, a tuition-free community college, public housing expansion, and immigration reform. It has nothing to do with COVID, infrastructure or China. It has everything to do with the elections of 2022 and 2024. “To win the midterms and presidential elections, Biden has to spend more than FDR,” said a Washington insider and neighbor to Pelosi who requested anonymity.

Climate change is also important to the president’s base – as it should be to all of us – but dealing with it is expensive. Anxiously in the wake of a report by the Intergovernmental Panel on Climate Change, Democrats have proposed more than $ 333 billion to support clean energy development, reduce carbon emissions and fight deterioration weather conditions, such as droughts, floods and forest fires.

The second track could see spending on electric vehicle charging stations doubling unnecessarily to $ 15 billion, as well as $ 100 billion in consumer incentives, in line with hopes expressed by the president in March. Ford, General Motors and Stellantis are among the companies that could benefit as manufacturers set ambitious goals and prepare for a future for electric vehicles.

Success in passing both tracks would place Biden next to Frank Roosevelt and Lyndon Johnson as one of the biggest spenders in American history. Whether that makes him a liberal titan or a ruinous inflationist depends entirely on the inflation numbers over the next three to five years. Either way, the president’s own words could apply: it would be a “Big F * cking Deal”.

Those old enough to remember the 1970s stagflation under Jimmy Carter shudder at what might happen next.

Why the two tracks? In a sense, it’s a hostage situation. Democrats need their 50 senators to support the $ 3.5 trillion bill, with no room for a single defection. Senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona are the moderates of the Dem Blue Dog caucus, a declining breed, and both have clear and public reservations about such a high price tag.

Pelosi can’t stop the two – or other moderates – from scratching multi-billion dollar pieces – but his piece forced them to begin the process of reconciliation. The Senate voted 50-49 with all Democrats in favor of doing just that.

This bet can be where it all falls apart. Pelosi is also, in a sense, a captive. House progressives have threatened to withhold their votes on the bipartisan plan without sufficient spending on the second track, and there may not be enough supporting House Republicans to replace the 49 members claimed. Six moderate members of the House attacked the bill in the opposite direction, urging Pelosi to hold an immediate vote on the bipartisan package. They too have the numbers to shatter the Democratic majority, and there is absolutely no Republican willing to defect to replace them.

For Democrats to achieve the victory of their dreams, the Senate will need to craft a spending plan small enough to win the support of Manchin, Sinema and other moderates, but ambitious enough to win the support of Jayapal, Ocasio-Cortez and the Progressive Caucus. Good luck with that.

Where is the magic number? Democratic hopes lie in the possibility that there will be a sum below the point of moderate defection but above the point of gradual defection, which may not be possible. It will also be economically ruinous.

The president should expect a series of sleepless nights as he and his allies strive to keep their party united. But if Biden is successful, it may be Inflation City that will ruin his party’s chances in 2022 and 2024.

With the help of Danny Tomares



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