After days of waiting, Senate Republicans finally unveil their infrastructure plan budget proposal. The new amount is nearly double the previous proposal. However, it remains short of the $1 trillion line.
At a total of $928 billion, the GOP policymakers allocated the biggest chunk for construction projects. This will include new roads, bridges, and a newcomer, which is electric vehicles.
Nearly $100 million will go to public transportation, while $72 million is for improving waterways in the country. Airports, railways, ports, among others, are also included in the proposal.
However, the nearly $1 trillion budget still sits at a far end of the spectrum compared to what the Democrats propose. President Biden already streamlined his initial budget structure from $2.2 trillion to $1.7 trillion in the latest agenda. Still, the $700 million disparity remains an area of concern. Experts in the field noted that the plan would more likely experience a delay from the lack of consensus.
The same scenario happened on the last stimulus package proposed during the Trump administration, consecutively put to later until elections came.
Republicans noted that they expect a longer discussion on the matter. The main reason is that many focus areas differ between the two parties. Since the pandemic, the GOP is apprehensive about the debt burden. It could come should unregulated spending takes hold in the country.
The party also countered Biden’s proposal to raise corporate taxes to generate more funds for infrastructure spending. In response, front-line speakers of the Republican party said that transportation user fees alone could make up for the same budget.
Meanwhile, US Treasury Secretary Yellen noted that President Biden’s proposal could hike the country’s Debt to GDP ratio. On the other hand, she noted that such a move remains “fiscally responsible,” as real interest juxtaposed against the federal debt remains negative.
Yellen is also adamant about her view on inflation as transitionary and will likely slack off by the end of the year.
Since the start of the Democrat’s leadership, some spectators pointed out that generous spending might lead to higher inflation later. On the other hand, the Federal Reserve is still too far from reaching inflation targets for the year of 2% as the pandemic spillover continues to weigh.
The US economy should expand by an average of 7% during the year, as also asserted by IMF.