President Biden and a bipartisan coalition of senators struck a deal last week for a pared-down infrastructure bill that would gradually boost the U.S. economy over the next few decades while whittling away at the nation's unprecedented level of debt.
Findings from the Penn Wharton Budget Model, a nonpartisan group at the University of Pennsylvania's Wharton School, show the $973 billion deal – which includes $579 billion in new funding – would decrease debt by 0.9% and increase GDP, the broadest measure of goods and services produced in the country, by 0.1% in 2050.
The plan draws funding from a variety of sources, including reducing the IRS tax gap by beefing up enforcement, redirecting unused federal unemployment money from the 26 states that are prematurely ending the relief program and repurposing other COVID-relief measures.
The bulk of the spending in the plan would occur in the first few years that it was implemented, initially adding to the nation's debt level – which is already at a record $28 trillion, thanks to record-shattering levels of government stimulus during the pandemic. But over time, as the new spending declines and IRS enforcement increases, the level of debt would begin to slowly shrink, falling 0.4% by 2040 and 0.9% by 2050.
It would also boost wages by about 0.1% each decade until 2050.
"This is a generational investment, a generational investment to modernize our infrastructure, creating millions of good-paying jobs and positions America to compete with the rest of the world in the 21st century," Biden said Tuesday while selling the plan in Wisconsin. "Because China is way outworking us in terms of infrastructure."
The measure would allocate $109 billion for roads and bridges, $66 billion for rails including Amtrak, $49 billion for public transit, $65 billion for broadband infrastructure and $75 billion for power, including grid authority, in addition to other "core" infrastructure projects.
Twenty-one senators – 11 Republicans and 10 Democrats – have endorsed the framework, although it still needs to win the support of Senate Majority Leader Chuck Schumer in order to meet the 60-vote threshold needed to pass legislation in the Democratic-controlled Senate under regular order.
Schumer and House Speaker Nancy Pelosi met with Biden last week and have indicated they will support a bipartisan plan, with the caveat that Democrats independently pursue a larger reconciliation package that includes trillions in funding for issues like elder and child care, education, health care and climate change.
Without the promise of a forthcoming reconciliation bill, some Democrats have questioned whether they will support a slimmed-down bipartisan bill.
"There ain’t no infrastructure bill without the reconciliation bill," Pelosi told reporters on Thursday.