The 2021-22 Biden Legislative Ledger Has Spent $4 Trillion. Now What?

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Phil Nufrio
November 28, 2022

As a 35-year public policy administration educator and former federal management/policy analyst, I examined the Biden administration’s historic legislative agenda.  

Let’s start with some critical take-aways from the Trump administration. First, they continuously asked the FED to drive interest rates to zero, which fueled Wall Street’s inflated bullish run. Additionally, the 2017 tax legislation increased the wealth of the upper five percent and other tax breaks were given to major corporations. These changes added $2 trillion to the national debt. Finally, the administration’s mismanagement of COVID placed the U.S. economy in a two-year holding pattern while more than 500,000 Americans died.

Four years later, the Biden administration’s first act was to pass the historic, bipartisan American Rescue Plan Act (ARPA), which provided direct pandemic relief money to 90 million individuals, families and businesses. This was followed by:

• The Bipartisan Infrastructure Law, which authorized targeted monies to enhance and upgrade the country’s infrastructure;
• The Chips and Science Act, targeting major domestic investment of semiconductors

and in science research;

• The PACT Act, which expanded health care for veterans exposed to burn pits
• The Bipartisan Safer Communities Act, the first gun safety legislative package to be signed in 30 years;
• The 2022 Inflation Reduction Act, which accelerated the transition to non-producing renewable energy and lowering Medicare prescription drug prices.

These bills represent the most profound federal stimulus and action in 60 years, totaling $4 trillion. Here is a breakdown of the associated costs and impact.

ARPA ($1.9 Trillion)

ARPA provided $252 billion in COVID relief to individuals/families and small businesses. It increased the child tax credit from $2,000 to $3,600 for children under the age of six and to $3,000 for children under the age of 18. There also is early evidence that the childhood poverty rate decreased in 2022 since ARPA’s implementation. In addition:

• $350 billion in emergency funding went to states and localities to mitigate rising costs/falling revenues. This included support to households, small businesses, public health emergency, nonprofits and impacted industries. 
  
• $10 billion went to states and localities for projects like broadband infrastructure.
  
• $10 billion went to states and localities in the form of relief money. This included subsidizing (delinquent) mortgage payments to minimize foreclosures during the pandemic, alleviating emergency shelter capacity and mitigating potential COVID-19 infections.
  
• $21.6 billion assisted households unable to pay rent and utilities due to the COVID-19 crisis.
  
• $10 billion was provided for small business credit expansion initiatives that would support businesses owned by socially and economically disadvantaged people; provide incentives to boost funding tranches for states that show robust support for such businesses; and support small businesses with fewer than 10 employees.

Bipartisan Infrastructure Law ($1 trillion)

This legislation targeted funding to restore highways and other infrastructure projects, including

• $110 billion for roads and bridges;
• $66 billion for railroads, including upgrades of passenger rail system and freight rail safety;
• $65 billion for the power grid including power lines, cables, clean energy and hacks;
• $65 billion to expand broadband in rural areas and low-income communities and reduce internet bills for low-income citizens;
• $55 billion for water infrastructure including lead pipe replacement, chemical cleanups and providing clean drinking water in tribal communities;
• $50+ billion for cybersecurity and climate change, as well as addressing flooding, wildfires and droughts, coastal erosion and extreme weather events;
• $39 billion to upgrade public transit systems nationwide including creating new bus routes and making public transit more accessible to seniors and disabled Americans;
• $25 billion for major upgrades and expansions at U.S. airports including air traffic control towers and systems upgrades;
• $21 billion to clean up superfund and brownfield sites, abandoned mines and old oil and gas wells;
• $17 billion to the Army Corps of Engineers for port infrastructure including ferry terminals and reducing truck emissions at ports;
• $11 billion to address highway, pedestrian, pipeline and other highway safety areas;
• $8 billion to address water infrastructure investments to combat drought, particularly in the west;
• $7.5 billion for nationwide electric vehicle charging stations;
• $7.5 billion for electric school buses in low-income, rural and tribal communities. Funds also will allow those communities to convert to zero-emission buses.

Inflation Reduction Act ($260 billion)

This is a 10-year spending plan offset by accompanying tax increases on high-income individuals and wealthy corporations. According to the New York Times, the legislation includes $369 billion to combat climate change including:

• Tax credits to increase electricity production from renewable or non-carbon sources;
• New and expanded tax credits for electric vehicle purchases and improving the energy efficiency of homes;
• An incentive and tax credit for companies developing biofuels and other renewable fuels for cars and planes;
• New and expanded subsidies to bring down the cost of buying health insurance through the Affordable Care Act.

It offsets spending through:

• Imposing a new federal minimum income tax of 15 percent ($313 billion) based on the profits companies report to investors;
• Closing the carried interest tax loophole ($13 billion) that allows private equity and hedge fund managers to pay lower taxes on some compensation;
• Allowing the government to negotiate and set prescription drug prices for people enrolled in Medicare, a savings of $266 billion.
• Capping Medicare out-of-pocket costs at $2000.

It’s important that this $4 trillion in spending is accompanied by accountability. The federal government must strategically assess impact in all the targeted areas of these bills. Program impact must begin now by marshalling all federal agencies into a whole-of-government impact analysis task force including program evaluation staff from the GAO and all relevant federal cabinet agencies including OMB, HHS, DOT, IRS and Treasury.

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Author: Philip M. Nufrio is a lifetime member of ASPA and professor emeritus of public policy and administration at the Metropolitan College of New York, School of Public Policy and Administration. He can be reached at [email protected].

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