Both parties in Congress must address infrastructure challenges

As the weeks and months pass by, the reconciliation bill that’s primarily filled with social programs and the infrastructure bill with trillions of dollars as a price tag are stalling in Congress because moderate Democrats and their progressive colleagues in the party are not on the same page.

House and Senate Republicans are also concerned about the considerable spending that the majority of Democrats are asking for to get Americans back on track after our country has been severely affected by the COVID-19 pandemic, rising inflation, and shortages of labor and materials due to widespread supply chain disruption across the country and on the global stage.

Democrats have the majority in the House and the tie-breaking vote in the Senate, but that has not made a difference in helping advance these legislative bills for floor votes on both to get them to President Joe Biden’s desk for signatures.

Biden recently stated that the reconciliation bill won’t get full support by the Democrats, as he expects a reduction to the price tag of $3.5 trillion. Moderates such as Sen. Joe Manchin and Sen. Kyrsten Sinema are the two main centrists who have more conservative views on the amount of spending that should be reflected in these bills.

For example, House Democrats would like to see the capital gains tax rate increase from the current 20% figure to 25%. When factoring in the 3.8% surtax on net investment income, the total tax would be 28.8%. This is one of the ways Democrats envision the payment of the multi-trillion social spending legislation.

Single household income at $400,000 and married joint household income at $450,000 would be affected, especially during one-time occurrences such as selling a home or a business. Having enough savings for retirement, especially during a time of inflation, is Americans' main concern. They don’t want to see significant tax increases in addition to the rising costs of energy, food, materials, finished goods, and services.

While an increase in the capital gains tax would be a critical measure that would affect the lives of individuals and families who run small businesses, another issue that seems insurmountable to solve at this time is the supply chain disruption that’s affecting the U.S. and foreign markets.

Consumer demand is overpowering low supply. Goods are not able to be produced and distributed quickly and efficiently. Supplies are delayed getting to big box retail and grocery stores, or they’re out of stock online. Holiday shopping is recommended to begin now due to low inventory. Despite high inflation, retail sales are up because demand is high for however much inventory is able to make it on the shelves of retail stores before being sold. However, with ongoing low inventory, it remains to be seen if consumers cut back spending because high prices are not sustainable after the holidays.

Labor costs have been on rise, and there are significant shortages of labor and materials to build cars, homes, and appliances, as well as the microchip shortage that’s curtailing production of the new iPhone 13.

The infrastructure bill should have already been signed into law by Biden. However, his challenges are seeing the constant disagreement over the social spending bill that has delayed the infrastructure bill from passing. The people deserve to see congressional leaders on Capitol Hill work through their differences and come to an agreement regarding all that should be included in these bills.

Given the serious, multi-layered logistical issues surrounding the unloading of containers filled with commodities and finished goods that represent 40% of imports through the seaports of Long Beach and Los Angeles in California, improving roads, highways, bridges, ports, and rail lines are paramount to the efficiency and viability of all means of commercial transportation. A massive amount of raw materials and finished goods have to be shipped every day to businesses, major retailers, and grocery stores to get into the hands of consumers.

Port operators, commercial truckers, freight rail lines, and labor unions all have to be working together to help alleviate the burdens on America’s supply chain channels in an expedited fashion.

Major corporations such as Nike, IKEA, Costco, and Apple are just a few of the numerous companies affected by the supply chain crisis. With the much-needed assistance, and at the request of Biden administration, from Walmart, Target, UPS, FedEx, and Home Depot, these retail giants have significant roles to play around the clock to maximize their resources to help Americans get access to supplies to purchase now and in preparation for the holidays.

America can’t afford to have another economic slowdown because supply can’t meet the surging demand. If the supply chain disruption persists, there could be potential for our country to experience stagflation in the next six to 12 months, which would derail any attempts for small business owners and corporations to hire workers, buy supplies, invest in their businesses, and pay for goods and services. Energy, transportation, manufacturing of medical equipment, construction, and other vital components of our economy rely on consumers and customers to be the engines of the nation’s economy. They’re the end-users and buyers, respectively, of the products and services including in the consumer tech space.

The key points going into the holiday months are Congress voting on reasonable, bipartisan infrastructure and social spending bills that would make sense to any American who believes in fiscal responsibility, fixing our supply chains so they’re more effective and efficient to avoid any future crises, and prioritizing the social public policy agenda that would better the lives of families.

The number one goal is to have the strongest economy possible with major job growth across a whole host of sectors. Our country has to continue with vaccinations, get this pandemic behind us, and try to find some semblance of normalcy.

Garrett Boorojian is managing partner and chief development officer at WaveCapital Partners.

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