Jeffrey Sachs writes that while the latest infrastructure bill will fund many necessary improvements, it falls far short of what is actually needed thanks to Republican opposition to raising taxes on corporations and wealthy individuals.
The bill is designed to satisfy the GOP’s steadfast opposition to new taxes. To do so, the bipartisan group has exaggerated the new investments in the bill — as well as the revenues to pay for those investments. Let us unpack this numbers game, starting with America’s investment needs. Our infrastructure is failing in three ways. First, much of it is old. Second, because of climate change, it is increasingly vulnerable to rising sea levels, storm surges, floods, droughts, heat waves, forest fires, extreme storms and other events. Third, it is outmoded. We need green (low-carbon) and digital infrastructure for climate safety and economic competitiveness in the 21st century. This kind of infrastructure upgrade will cost trillions of dollars over the next decade. At the start of the year, the American Society of Civil Engineers (ASCE) estimated that cumulative US investment needs into 2029 are $6.1 trillion, but there is currently only $3.5 trillion in existing funds allocated for future spending — creating a shortfall of $2.6 trillion over a decade, or $260 billion per year. So far, that financing gap is translating into a deep and chronic shortfall of investment spending. The federal government therefore has to increase the flow of investments — and find a way to pay for the increased outlays. While some Democrats would welcome offsetting cuts in military spending, the Republicans heatedly object. And while Republicans have tried repeatedly to cut social programs, most Democrats and the public want more, not less, social spending.
