Better bond rates would boost recovery at little cost to taxpayers
Published 6:52 pm Thursday, March 4, 2021
The Senate will soon begin debating a $1.9 trillion stimulus bill written and passed by House Democrats. Unlike the previous five COVID bills, which provided a total of $4 trillion in relief – much of it still unspent – and passed with almost unanimous support, this legislation strikes a much more partisan tone. The bill is packed with longstanding liberal priorities and seems to anticipate America being stuck in lockdown indefinitely. Republicans are taking a more targeted approach designed to encourage the improving economy without causing inflation. As part of this effort, I am proposing two bills that would support building roads, bridges, hospitals, and other needed infrastructure projects in local communities.
The pandemic has placed enormous stress on state and local governments. Because of declining tax revenue, municipalities have been forced to delay or cancel critical infrastructure projects. To help ease local budget constraints, I recently reintroduced the LOCAL Infrastructure Act along with Senator Debbie Stabenow of Michigan. This legislation would allow state and local governments to take advantage of low interest rates and redirect the savings toward infrastructure needs. This process, known as advance refunding, is similar to how homeowners can refinance their mortgages to realize greater savings. This could free up billions of dollars for local communities.
In addition, I will soon be reintroducing the American Infrastructure Bonds Act. This legislation would create a new class of taxable bonds called “American Infrastructure Bonds,” similar to the “Build America Bonds” that were issued after the 2008 financial crisis to encourage investment in infrastructure. These bonds would attract private investment in a wide range of public projects, including broadband deployment and water systems. Many localities in Mississippi could use these to repair pipes and sewage systems damaged by the recent deep freeze.
These proposals would provide tangible benefits to communities without adding vast amounts of new debt and risking an inflationary spiral, as Biden’s proposal would do. In fact, Larry Summers, an economic official in the Obama and Clinton Administrations, has warned that the President’s massive bill could risk overheating the economy. Both of my bills enjoy bipartisan support and have been endorsed by many organizations, including the National Association of Counties and the National League of Cities.
Last year, Congress had a unique and temporary role to play in helping Americans get through the pandemic. Of course, what our country really needs is for the economy to reopen and lockdowns to end. Unfortunately, President Biden’s proposal would spend unnecessary money, encourage more lockdowns, and potentially delay our recovery.
As currently written, Mr. Biden’s bill would send disproportionate relief money to states that have been under strict lockdown orders, effectively rewarding governors who have kept small businesses closed. The bill would also expand taxpayer funding for abortions, bail out poorly-run union pension funds, and give $129 billion to schools without requiring them to reopen. Democrats also tried to include a $15 minimum wage hike – which experts say would cost the nation 1.4 million jobs – but the Senate parliamentarian has ruled that this violates budget reconciliation rules, meaning it will be stripped from the final legislation. It is clear that Democrats are overreaching by trying to force partisan priorities into a national relief bill.
Our economy is showing encouraging signs of life. More Americans are returning to work, and optimism is growing for a strong recovery. Moreover, approximately $1 trillion of COVID relief from 2020 legislation has yet to be spent. Congress should focus on aiding and not derailing this progress. I will continue pushing for targeted measures that will empower local communities to regain their full strength.
Roger Wicker is a United States Senator from Mississippi.