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THE MONEY QUESTION: The White House says its attention is squarely on Covid relief, but talk in Washington is slowly but surely starting to shift to infrastructure. Last week, Treasury Secretary Janet Yellen said that “probably tax increases” would be used to pay for upcoming parts of the Biden agenda, including infrastructure. Afterward, a White House spokesperson told POLITICO the administration is “laser focused” on the American Rescue Plan, but did say that while the administration is making “temporary and needed” immediate investments, “for permanent policies that incur ongoing costs, the president is committed to paying for them by asking the wealthiest Americans and corporations to pay their fair share.”
STANDBY FOR TEA LEAVES: Parsing this cryptic statement sets “temporary and necessary”against “permanent and ongoing.” Temporary and necessary could well reference the immediate spending needed to help industries manage through Covid-19, which is likely to be funded through deficit spending. And “permanent and ongoing” could be read as, well, the rest of it — the actual infrastructure part of the infrastructure plan. If lawmakers want to actually raise corporate taxes or roll back pieces of the GOP tax overhaul as a means of “asking the wealthiest Americans and corporations to pay their fair share,” that likely means as part of a second reconciliation package. There’s no other way to get to 60 votes for a tax increase.
Infrastructure watchers think there are two possible paths in play. Here’s what those look like:
Bipartisan, and debt-financed: This is what the Biden administration is likely to try first. President Joe Biden, Transportation Secretary Pete Buttigieg and others want a bipartisan bill, and pulled Republicans into the first Oval Office meeting on the issue. And unlike on the Covid bill, where efforts at including Republicans in the process amounted to little more than a gesture, bipartisanship on infrastructure could be for real. “The Covid thing was for show. They did one meeting,” an infrastructure lobbyist told POLITICO. “They were so far apart that they were never going to be able to get to a compromise there.” On infrastructure? “I think that’s a different story. I think they are going to try to do it.” It would almost inherently have to be paid for with deficit spending, since otherwise they’d need 10 Republicans to go for big tax increases or a user-fee hike, both of which are politically highly unlikely.
Partisan, and funded by taxes: If Democrats can’t find 10 GOP votes, they’d be forced to use budget reconciliation, for the second time this year. Along with the lower 50-vote threshold, the process brings tricky process and substance considerations. Using budget reconciliation would likely mean that Democrats would turn to tax increases as a pay-for, like those that Biden proposed on the campaign trail, on corporations and individual high earners. And it could be a broad package under the umbrella of “infrastructure” writ large.
User fees no more? The Biden administration has pledged not to raise taxes on people earning under $400,000, meaning a gas tax hike is likely out of the window (and Buttigieg ditched the idea after his confirmation hearing, too). A vehicle miles traveled fee, which Buttigieg has also expressed skepticism about, would carry some of the same ideological issues. “Nobody wants to put a tax on individuals,” the infrastructure lobbyist said. “All the tech issues and privacy issues aside, it’s still a tax on the individual.”
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NO, IT’S NOT THAT BOEING MODEL: FAA is expected to soon issue an emergency order requiring “immediate or stepped-up inspections” for “the hollow fan blades” of Boeing 777 planes that have the same type of engine as the one that failed during a Honolulu-bound United Airlines flight from Denver on Saturday. “This will likely mean that some airplanes will be removed from service,” FAA Administrator Steve Dickson in a statement late Sunday.
Late shift: Dickson said FAA’s aviation safety team would be meeting with engine manufacturer Pratt & Whitney, as well as Boeing, “into the evening” Sunday to finalize details of the directive and accompanying service bullets. United is the only U.S operator that has the engines in its fleet, according to FAA. United said it will temporarily ground its 24 active Boeing 777 planes with those engines. Japan’s civil aviation authority also has told carriers to suspend flights for affected planes pending further review.
NTSB issued its own investigative update Sunday and revealed that an initial examination of the right engine of United flight 328, which failed shortly after takeoff, showed that the inlet and cowling had separated from the engine and two fan blades were fractured. Investigators will continue to examine the engine, plane, and photos and video footage from passengers, NTSB said. The plane’s cockpit voice recorder and flight data recorder have been sent to an NTSB lab in Washington.
IF AT FIRST: Airlines were dealt an early blow by the Biden administration to their hopes of reopening some shuttered international travel, but they’re trying again. Airlines for America announced Friday that its major carrier members are launching a voluntary contact tracing program for international passengers, collecting data that includes names, phone numbers, and email and physical addresses.
High hopes: “We are hopeful that this measure, coupled with existing testing requirements for passengers flying to the U.S., will lead policymakers to lift travel restrictions so that international travel can resume and the social and economic benefits of that travel can be realized,” A4A President Nick Calio said in a statement.
TURNING SERIOUS: POLITICO’s Daniel Lippman scooped that United Airlines has launched an investigation into leaked flight data showing when Sen. Ted Cruz (R-Texas) originally planned to return from his controversial trip to Cancún, Mexico, and is considering terminating whoever is responsible. “It’s against United’s policies to share personal information about our customers and we are investigating the incident,” a United executive said in a statement.
At least one ally: Association of Flight Attendants President Sara Nelson tweeted out her support for the leaker(s), who she said had colleagues and families in Texas “freezing while their US Senator skips town & then tries to lie about it.” “WE”RE ALL THE LEAK,” she wrote.
A DIFFERENT PROBE: DOT’s inspector general will audit the $10 billion in Covid relief grants FAA provided airports under the CARES Act. As Sam noted, the bill included a skewed grant formula that advantaged some smaller airports over larger commercial hubs, and those disparities will likely be examined in the audit. “Our objective is to assess whether FAA’s policies and procedures for awarding and overseeing CARES Act grants are sufficient to protect taxpayer interests,” the IG said in a memo.
PETEWATCH: Buttigieg told CNN on Friday morning that the situation in Texas “forces the question” on infrastructure: “Are we going to do what it takes to remain the greatest country in the world or not?” He demurred on a question about the price tag associated with a Biden administration infrastructure package but said that “there are transit agencies that may not make it into the summer” without significant aid.
NEW MANAGEMENT: The Senate Commerce Committee revealed its roster of leaders for restructured subcommittees Friday with a pledge for bipartisanship. “Americans are counting on us to deliver urgent economic relief from this pandemic, help American workers and businesses compete all over the world, and protect consumers and their families with the strongest possible safety standards,” Chair Maria Cantwell (D-Wash.) said in a statement.
OBJECTIONS: Citing a Fox Business story, Republicans on the House Transportation Committee criticized a provision in the House version of the relief bill that they said would provide more than $100 million for a project to extend Bay Area Rapid Transit underneath San Jose. “This is the result of the Majority’s rush to pass their partisan COVID relief package with NO Republican input and no thoughtful, transparent consideration of its policies,” they tweeted Saturday.
FOR YOUR RADAR: Senators from Maryland and Virginia are expected to introduce legislation this week that would reauthorize federal funding for the Washington, D.C., Metro for the next 10 years.
SUNNY DAYS: TSA wants to hire 6,000 additional screeners at 430 airports to help prepare for an expected summer travel bump as Covid vaccines become widely available in the U.S., Stephanie reported. A TSA spokesperson said the agency put off making new hires for most of last year because of low travel volumes.
PREPARING FOR THE FUTURE: DHS’ Science and Technology Directorate announced Friday that it awarded $199,950 to Lauretta AI, LLC for technology that could be used as part of self-screening airport security portals. The technology would use video analytics to help TSA track travelers through the screening process. The award is part of a broad DHS effort to accelerate the use of touchless airport technology in response to Covid-19, the agency said.
CRUISE UPDATE: If you didn’t catch it last week, POLITICO Canada’s Lauren Gardner provided a great rundown of the Alaska congressional delegation’s efforts to eventually restart cruises to the state despite Canada’s extended ban on most cruise ships through February 2022. We wondered how things were going on our side of the border, so we asked the CDC, which has been overseeing the implementation of new health and safety measures that would eventually allow cruises to resume.
What they said: A CDC spokesperson told us that a conditional sailing order issued in October — which laid out a “phased approach” to reducing opportunities for Covid transmission on ships — remains in effect until Nov. 1. “We anticipate the next phase of technical instructions (technical instructions for port and local health authorities agreements) to be released in the next few weeks,” the spokesperson wrote in a statement.
What industry is doing: Cruise Lines International Association said many of its members have chosen to remain suspended through at least April while they plan for a gradual return to operations. In the meantime, the group said it has had “positive engagement” with the CDC and looks forward to receiving additional technical instructions and guidance on how to implement the framework of the conditional sailing order.
— “Biden squeezed between promises to go green and bolster unions.” POLITICO.
— “Texas freeze led to release of tons of air pollutants as refineries shut.” Reuters.
— “Dow CEO urges Biden to use Texas as catalyst to kickstart infrastructure.” Financial Times.
— “UK Supreme Court rules Uber drivers are workers.” POLITICO.
— “Trucking, freight industry seek faster route to Covid-19 vaccinations.” The Wall Street Journal.
— “Chief economist Pearce to retire from IATA in July.” FlightGlobal.
