Infrastructure Arithmetic

June 2021

Depending on what you read, the White House and Senate Republican leaders have either compromised on a $1.2 trillion infrastructure bill or a $579 billion infrastructure bill. Actually, both are true, sort of.

The difference is that the $1.2 trillion includes “baseline spending,” or the amount that would have been spent on infrastructure even if no bill were passed. The actual infrastructure bill would only include $579 billion of new spending.

That’s quite a concession on the part of the White House, which had originally proposed $2.3 trillion in new spending, or nearly four times as much as the bipartisan agreement. On the other hand, $579 billion is exactly $579 billion more than Republicans had proposed to spend before Biden released his original proposal on March 31.

At the same time, the so‐​called baseline appears to represent the amount that would be spent on surface transportation by the bill proposed by House Democrats, or about $78 billion a year. This is a large increase from the amount that has been spent in the past few years, which has been about $55 billion a year. In order to get the total above $1 trillion, allowing the president to save some face, the $78 billion a year is extended for eight years, even though the House bill would authorize only five years of spending.

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