Washington Report: Mueller, Drugs, Deficits and Infrastructure

by Craig Piercy, ACPA Washington Advocate

As I write this column, political Washington is still coming to terms with the notion that Robert Mueller and his team did not find evidence of collusion between the Trump administration and the Russian government to influence the outcome of the 2016 presidential election. While the report itself has not been released to the public, it is becoming reasonable to assume that House impeachment proceedings are not in our immediate future.

So now what? There is still roughly three-quarters of a non-election year remaining in the current two-year cycle. From a legislative perspective, it is prime time to make progress on substantive policy issues.

Make no mistake: The partisan divide in Washington is still strong. In Congress, Democrats are coping with a restive socialist insurgency in their newly expanded ranks, while the GOP is struggling to frame a policy agenda beyond the Wall and confirmation of conservative judges. Meanwhile, President Trump sees value in playing to his conservative base, most recently with a renewed effort to completely overturn the Affordable Care Act—a.k.a. Obamacare—without a politically viable alternative.

There is one wish both sides share: a desire to demonstrate effectiveness—to show their voters that they can get something done despite the seemingly perennial gridlock. Simply put, both Republicans and Democrats need a few wins right now.

The conventional wisdom in Washington (pardon the oxymoron) says there are two issues where public sentiment is so strong that bipartisan deals are still possible: reining in the outrageous pricing practices of pharmaceutical companies, and making badly needed investments in our public infrastructure.

Tackling the drug pricing issue is complicated for sure. The pharmaceutical industry is a savvy swamp creature, having spent hundreds of millions of dollars over the years for high-priced lobbyists and campaign contributions. But public anger is white-hot over stories like “Pharma Bro” and Mylan’s 400 percent price increase on the EpiPen, and just about every elected official in Washington, from President Trump to the most conservative and liberal members of Congress, has acknowledged the need to act swiftly.

Predictably, the other issue is infrastructure. Here, the challenge is the same as it ever was. While there is broad bipartisan agreement that the federal government should invest significantly more resources into our highways, airports, rail systems and waterways, few politicians are willing to publicly support the revenue increases and/or spending reductions necessary to facilitate it. Like the old saying goes, “Everybody wants to go to heaven, but nobody wants to die.”

If tax hikes and spending cuts are off the table, there is only one remaining alternative: deficit spending. This is where it gets interesting.

There is a growing school of thought—with adherents on both sides of the political aisle—that federal deficits and debt levels don’t matter as much as we thought. It’s known as Modern Monetary Theory. It goes like this: As long as the economy continues to grow, and interest rates stay low, policymakers have the green light to keep on spending. In other words, if your salary grows faster than your mortgage and credit card payments, you can keep borrowing without worry. Infrastructure spending in particular is generally recognized as having positive economic impact. For instance, better roads mean less time in traffic (and fewer pothole-induced flat tires), which makes us all more productive, which in turn helps the economy grow at a faster rate.

Personally, as a child of depression-era parents, I’m still not convinced that Modern Monetary Theory won’t ultimately result in economic calamity, but that’s beside the point. What matters is whether there are enough Democrats and Republicans on Capitol Hill who share the belief that deficits don’t matter. If so, we may finally see an agreement on a major infrastructure package that has eluded Congress and the president for years.

As an association, ACPA is working hand-in-hand with other concrete trade associations to affirmatively encourage Congress to act on infrastructure this year. In addition, infrastructure legislation presents a welcome opportunity to include ACPA-supported legislation to supplant the federal gas tax on concrete pumps with a miles-traveled fee. Not only would this resolve the problem of concrete pumps paying highway taxes on fuel they use to pump concrete on the job site, it would provide the first national demonstration of a mileage-based user fee, which could demonstrate—and ultimately enable—a larger fix to our broken highway transportation finance system.

Stay tuned.