As Infrastructure Bill Nears Key Vote, Deficit Takes Back Seat

Despite a resurgent coronavirus, the economy appears to be recovering. Employers added 943,000 jobs in July, the Labor Department reported Friday, and Jerome H. Powell, the Federal Reserve chair, acknowledged in late July that inflation remained a real risk in the near term

“We think that some of it will fall away naturally as the process of reopening the economy moves through,” Mr. Powell said of inflation, before adding, “It could take some time.”

But the federal spending of the Trump era appears to have given his party permission to put austerity in the rearview mirror, at least for some measures.

In a statement on Thursday in response to the C.B.O. price tag, Senators Rob Portman, Republican of Ohio, and Kyrsten Sinema, Democrat of Arizona, the two lead negotiators on the infrastructure deal, defended the bipartisan legislation as “a historic investment in our nation’s core infrastructure needs.”

That rationale reflected longstanding arguments from liberals, which Mr. Portman and Ms. Sinema decidedly are not.

“Almost every state, county and private-sector organization pays for ongoing operating expenses with ongoing revenue, and pays for physical infrastructure with debt financing,” Senator Brian Schatz, Democrat of Hawaii, said on Friday. “Anything that provides value over a long period of time should be paid for over a long period of time. This isn’t some wacky new political philosophy; it’s just smart money management.”

And because Democrats have vowed to pay for their social policy spending with tax increases and other measures, such as allowing Medicare to bargain for lower drug prices, that legislation will not increase the deficit, said Senator Chris Van Hollen, Democrat of Maryland and a member of the Senate Budget Committee.

Article source: https://www.nytimes.com/2021/08/06/us/politics/infrastructure-budget-deficit.html