Expectations mixed on speed of Biden-led COVID relief, infrastructure bills
President-elect Joe Biden will work to pass a coronavirus relief bill in his early days in office, with negotiations among chief lawmakers already under way, followed closely by a robust infrastructure bill with municipal bond provisions.
That was the message from former Pennsylvania Gov. Edward Rendell, also former chair of the Democratic Party and an avid infrastructure funding proponent, during a Ballard Spahr webinar Wednesday afternoon. However, some stakeholders say it will take longer and compromise with Republicans will be key.
“Just think if you did it on day one, on inauguration day you did a COVID relief bill, you put that before Congress,” Rendell said. “On day two, you did a $15 minimum wage and day three an infrastructure bill.”
Rendell expects Biden will have already negotiated with Senate Majority Leader Mitch McConnell, R-Ky., and House Democrats and any relief should include money for states, Rendell said.
Realistically, current House Democrats’ relief and infrastructure proposals will not get adopted soon, said Chuck Samuels, counsel to the National Association of Health & Educational Facilities Finance Authorities.
“If [Biden] and whoever the Secretary of Treasury is can be impactful, then they could play both a leadership and honest broker role in getting a COVID bill and maybe even an infrastructure bill done," Samuels said. “We’re talking about a very scaled-back legislation, more generous than anything the Senate Republicans have supported, but much less than what the House Democrats have proposed."
The next U.S. Treasury Secretary has not been announced, though multiple reports have named top contenders such as Federal Reserve Governor Lael Brainard.
How fast a relief and infrastructure bill is passed depends on how influential Biden can be with both Senate Republicans and his own party, Samuels said. Rendell's optimistic view is not unreasonable, he said.
Rendell was more optimistic, saying an infrastructure bill, which may include municipal bond provisions, such as some form of direct-pay bonds, and expand the Transportation and Infrastructure Finance and Innovation Act, also known as TIFIA, is on the table. TIFIA provides long-term low-interest loans and other types of credit assistance for construction surface transportation projects. Rendell also suggested raising the federal gas tax, which is 18.4 cents a gallon and has not been increased in decades.
Rendell also predicted an increase to the minimum wage to $15, phased in over two years.
Other infrastructure experts see a robust infrastructure bill taking at least two years to pass as lawmakers may have an incentive to pass one before their own 2022 elections, said Adie Tomer, fellow at the Metropolitan Policy Program at the Brookings Institution.
Current surface transportation legislation, the Fixing America’s Surface Transportation Act, is set to expire at the end of September. It was extended on Oct. 1, 2020 by one year. An infrastructure bill could include surface transportation, but Biden also wants to expand broadband and a multitude of climate provisions, such as achieving net-zero emissions by 2050.
“There is a lot of work to do here when we say an infrastructure bill,” Tomer said.
In the meantime, state and local fiscal aid will function as an infrastructure stimulus, Tomer said. If state and local governments can shore up their balance sheets with that aid, it allows them more confidentially make capital investments in infrastructure, he said.
The next relief bill could have that fiscal aid for municipalities, but that will be negotiated along with unemployment insurance and small business support. For the sake of compromise, both sides of the aisle could leave direct aid out to get unemployment insurance and small business support, Tomer said.
“I struggle to see that there will be nothing, I just don’t know what it will be with state and local aid,” Tomer said.
In early October, House Democrats passed a scaled-back $2.2 trillion HEROES Act, with $436 billion in direct aid for state and local governments. Senate Republicans want a smaller relief bill of $500 billion. Even infrastructure bills are starkly different, with a larger House Democrats’ Moving America Forward Act and a strictly more bipartisan surface transportation bill passed out a Senate committee in July 2019.
“It’s good that Rendell is optimistic about it and we’ll see how the leadership of Biden plays out to make this possible,” Samuels said.