Less than one week after the passage of President Joe Biden’s $1.9 trillion American Rescue Plan, Democrats are pivoting to work on what’s likely to be an even larger clean-energy package that could pump $4 trillion into the nation’s infrastructure and be revealed as early as May.
Speaking to ABC’s This Week on Sunday, House Speaker Nancy Pelosi (D-Calif.) said the bill can “hopefully” be crafted on a bipartisan basis–unlike the latest stimulus package, which passed with no Republican support–given its focus on infrastructure like roads, bridges and water supply systems.
To that end, Pelosi on Friday called on Democratic committee chairs in Congress to begin crafting a “big, bold and transformational infrastructure package” with their Republican counterparts, adding that she hopes a bipartisan “spirit will prevail” to address critical needs in energy, broadband, education, housing and utilities while creating jobs “in every zip code.”
Details on the package thus far have been vague (and Pelosi on Friday dodged a question asking for a specific timeline), but in a Saturday note to clients, Goldman Sachs said the legislation should increase spending and tax incentives for traditional and green infrastructure by at least $2 trillion, with Biden likely to preview the plan when he addresses a joint session of Congress in April.
“It is going to be green and it is going to be big,” Rep. Peter DeFazio (D-Ore.), chair of the House Transportation and Infrastructure Committee, told the Associated Press of the plan on Sunday, adding that he hopes the bill can pass his committee in May, in line with the timeline Goldman relayed Saturday.
Despite the hope in Washington, Goldman is “skeptical” the entire infrastructure package can pass with bipartisan support, citing Republican opposition to the package and particularly the Trump tax cuts that will likely be rolled back to pay for it.
September 30 marks the deadline for the infrastructure bill to pass Congress, Goldman notes, pointing to the expiration date for a highway and transportation funding bill that will help shape the package, which the bank says could be enacted as soon as late July.
“Building roads and bridges and water supply systems and the rest has always been bipartisan, always been bipartisan, except when [Republicans] oppose it with a Democratic president, as they did under President Obama, and we had to shrink the package,” Pelosi said Sunday on ABC. “But, nonetheless, hopefully, we will have bipartisanship.”
Biden has touted lofty ambitions for the nation’s infrastructure since his presidential campaign, when he proposed $2 trillion in investments “to build a more resilient, sustainable economy.” Among specific investments and goals promised are a carbon pollution-free power sector by 2025, upgrading 4 million buildings and weatherizing 2 million homes over four years, constructing 1.5 million sustainable homes and investing in 500,000 electric-vehicle charging stations. On top of that, the bill is expected to package in things like big-tech regulation and additional Covid-19 relief. “If the Biden Administration expands the bill to include other policies like expanded child care benefits, extension of the child tax credit, student debt relief or other education subsidies… the gross amount could rise to something like $4 trillion,” Goldman analysts said Saturday.
What To Watch For
Critics–from both sides of the aisle. Vital Knowledge Media Founder Adam Crisafulli said in a note to clients Saturday that he continues to think Biden “will struggle to pass another monster bill as opposition rises to deficit-bursting legislation, including among Democrats, but that won’t stop him from trying.” Crisafulli says investors should expect a lot more talk about tax hikes to help get more moderate Democrats on board. Sen. Joe Manchin (D-W.V.), who’s known to wield a swing vote in the Senate given Democrats’ razor-thin lead, told Axios last week he would only support a bill as large as $4 trillion if it’s funded with tax hikes.