Steve Peacher: Everybody thanks for joining this episode of “Three in Five,” this is Steve Peacher President of SLC Management and today I’m joined for the second time by James Slotnick who's the Head of Government Relations for Sun Life’s U.S. business, and James thanks for joining again.
James Slotnick: Yes, Steve thanks for having me back, a lot of pressure the second time.
Steve Peacher: Well we've wanted to get you back to talk again about the spending bills that are in front of Congress, one is related to physical infrastructure, the other is more related to what the administration's calling “human infrastructure,” can you give our listeners a quick summary of these to proposed bills?
James Slotnick: Yeah sure it's you know, really, really goes back to March, the Democrats passed the American Rescue Plan through budget reconciliation, Democrats only, that's really you know, probably the last hopefully, knock on wood, the last Covid relief bill that we'll have to see. And right after that the President went into the next part of his agenda, very ambitious for a large infrastructure package. To move forward infrastructure, I think that he looked at that very broadly, you know the not your traditional definition of infrastructure and because of that, I think you saw early on, you know really starting in April, moderates on both sides, both in the House in the Senate realized, there was an appetite for a bipartisan traditional infrastructure bill and then maybe there was the possibility that Democrats would want to go farther than your traditional infrastructure and they could do that on their own through budget reconciliation. And so that's led us to this to path. There's the Infrastructure Investment Jobs Act, which has already passed the Senate, a bipartisan 69 to 30. And that bill is your traditional infrastructure bill, about a trillion dollars of spending, about half that new spending, about half of it sort of found from other packages that just hasn't been spent. And that focuses on roads, bridges, broadband, water, there is some green energy policies in there as well, but that's definitely a more traditional infrastructure package. And again that's already passed the Senate, waiting on the House. And then there's the human infrastructure bill that’s being called the Build Back Better Act, and that bill is focused on things like a national paid family and medical leave program, universal pre-K, universal community college. A little more, again, on the human side of things versus that traditional infrastructure definition, but that's where we sit now. That's why we have the two tracks for those bills.
Steve Peacher: So, I know that you know time is of the essence, to get these done and there's a move to get them quickly. When do you think these are likely to get passed and what are some of the political hurdles or challenges that will need to be overcome in order to get to get these bills through Congress?
James Slotnick: Yes, Steve every lobbyist in DC is trying to figure this out, it's a tough it's a tough question, but I think what we've seen on the human infrastructure side is there is a real divide among Democrats, particularly moderate Democrats and progressives, on just what they want to move and when. Moderate Democrats, they look at that traditional infrastructure bill that they can pass bipartisan in the Senate and say “hey, you know, we don't have a lot of bipartisan things these days let's pass that right away and start rebuilding the nation's traditional infrastructure today.” What the progressives are saying, though, is they're worried that the moderate part of the party will be very happy to pass traditional infrastructure, but if that goes through then maybe they'll leave some of that human infrastructure component to the side, and so that, the politics really are all in the Democratic party right now and it's the leadership has essentially sided, at least so far, with the progressives and that's why we've heard Speaker Pelosi and Leader Schumer already tell President Biden talk about these two bills have to pass together in the House. You know we're coming to an inflection point on that, though, you know moderate Democrats have an agreement with the Speaker that in the near future they get a vote on the traditional infrastructure package and the fact is the human infrastructure package is nowhere close to being where it can actually be voted on in the House, and the Senate committees haven't even started to mark those bills up. So, politically, where we're getting to the point where you know some decisions are going to have to be made, but that's the politics; it’s the moderates and the progressive in the Democratic Party that that are really pushing on each other just what should go first and when.
Steve Peacher: I thought I saw a headline scroll by today that said the administration was admitting that the human infrastructure bill, the Build Back Better bill, would have to be scaled back to some extent, which probably just reflects the reality of what they're hearing in those discussions. You follow this very closely, what's your best guess as to what the ultimate size and scope of that bill looks like when all is said and done?
James Slotnick: Steve, you hit the nail on the head, I mean you know, the so the number that's floated is the House is working on a $3.5 trillion human infrastructure bill. And the fact of the matter is that is, that is not acceptable to Senator Joe Manchin who’s very public on this and Senator Kyrsten Sinema, who's been less public but also is very firm that that those numbers are just too high, and again Manchin’s been more outspoken and Senator Manchin talks about a $1.5 trillion bill that he could he could see, that would be something he could potentially support. And when you start to run the numbers Steve, again it gets scary because $1.5 trillion sounds like a ton, but when you look at some of the numbers for what things cost, like, for example, to do universal preschool for three and four year old’s, that's about $450 billion dollars. And if you wanted to extend child tax credit and some of the earned income tax credit some of the things that were increased as part of the American Rescue Plan, that's around $400 billion dollars. And universal community colleges is around $100 billion, so just right there that's $900 billion, and that's not any of the paid family medical leave or dental in Medicare or extending some of the other healthcare things that Democrats want to do. So, unfortunately the Democrats are going to have to make some tough decisions, it looks like at $1.1 to $1.5 trillion is probably the ceiling. So there's things are going to have to be cut, I will just say one last thing. One thing I don't think is going to be cut, though, unfortunately, is when you look at to make up for that spending, increasing the corporate tax rate to 26.5% to 25%1, that raises about $500 billion in revenue. So that's a pretty big chunk so, probably not 26.5%, probably, you know 25% is, is where we end up, but unfortunately it does look like, you know, that's something just because the amount of revenue raises that's probably still in there.
Steve Peacher: Well what's saying, a trillion here, a trillion there, and pretty soon you’re talking real money? That used to be billions now it’s trillions.
James Slotnick: Yeah, it's scary.
Steve Peacher: So one kind of offbeat question for you, I mean you're as well known around Sun Life, you're immersed in all things in government related, so if you had your choice, or maybe when you have your choice would you personally rather be A.) Supreme Court Justice, B.) a Senator or C.) Secretary of State?
James Slotnick: Easy answer: Secretary of State. That's a great job, you only have to do it for a limited time, you don't to run for re-election, and the appearance fees you can get after that would just set you for life, so I think, say plus you get to go travel great places. So Secretary of State's going to be, would be my answer.
Steve Peacher: Excellent. Okay, so now we know James’s career aspirations. All right, well listen thanks, very insightful as always really appreciate you taking the time for us, and thanks everyone for listening to this segment of “Three in Five.”
James Slotnick: Thanks, Steve.
Data in this article have been sourced from: https://www.investopedia.com/here-s-what-s-in-the-usd1-trillion-infrastructure-bill-passed-by-the-senate-5196817
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