Blog, Public Finance

Why the Future of Infrastructure Legislation is Unclear

09/17/2021

Last month, lawmakers announced that two bills—the $3.5 trillion Build Back Better and $1 trillion bipartisan infrastructure plans—may become law in the coming months. According to HilltopSecurities Head of Research and Analytics Tom Kozlik, the legislation could be described as once-in-a-generation investment and may strengthen what he has previously referred to as a “Golden Age” of public finance.

In his Sept. 1 commentary, Kozlik explained that while the $1 trillion bipartisan infrastructure bill has been passed by the Senate and the $3.5 trillion Build Back Better infrastructure plan is in the works by the House of Representatives, both spending packages face obstacles ahead. Kozlik specified that the Senate and House have clashing levels of support for each plan.

“Progressive Democrats in the House still see the paths for infrastructure legislation to become law as linked. Therefore, we should not expect the House to vote on and pass the $1 trillion bipartisan infrastructure plan until the Senate passes the $3.5 trillion Build Back Better infrastructure plan,” said Kozlik.In his Sept. 1 commentary, Kozlik reminded readers that Democrats received West Virginia Senator Joe Manchin’s vote to pass the procedural vote on the $3.5 trillion plan in the Senate. Yet, Manchin has expressed concern about Congress spending another $3.5 trillion.

According to Kozlik, “For a Democrat, or Manchin specifically, to hold on in West Virginia, he will have to not just appear to be bipartisan, but he will need to find a delicate balance between the goals of each party.”

Kozlik believes that Manchin could be persuaded to support some items in the $3.5 trillion package, but that he will likely not support additional fiscal policy unless it is paid for, rather than absorbing the cost as debt. This was supported in Manchin’s recent opinion piece in the Wall Street Journal, where he explains that funding should be based on what the U.S. can afford.

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