The new New Deal is a pretty good deal

The Infrastructure and Build Back Better bills could be boons for the West

Editor’s Note: Portions of the following story originally appeared in my High Country News writeup on the Infrastructure Investment and Jobs Act.

"Preaching and Farming at Mission Dolores" by Anton Refregier at Rincon Annex Post Office in San Francisco, a mural produced as part of the Works Progress Administration’s Federal Art Project, part of the New Deal. Source: Library of Congress.

THE NEWS: Rep. Lauren Boebert, who represents Colorado’s Third Congressional District, derides the Infrastructure Investment and Jobs Act (signed into law this month) and the Build Back Better Act (passed by the House and awaiting a Senate vote) as “socialist wish lists.” 

THE CONTEXT: Boebert, meet Marriner S. Eccles. Eccles, who served as Chairman of the Federal Reserve under Franklin D. Roosevelt, was one of the New Deal’s biggest boosters—even before the New Deal was developed.

In February 1933, at a Senate Finance Committee hearing examining the causes of and possible solutions to the Great Depression, then in its third year, Eccles took the stand. The root cause of the nation’s woes, he said, had nothing to do with debt, laziness, extravagance or God, as other witnesses proposed, and everything to do with maldistribution of wealth: The richest 1% of Americans had amassed 25% of the nation’s cash, leaving one-third of the nation out of work and impoverished and unable to fuel the economy with consumption.

He continued: “… we have destroyed the ability to buy at the source through the operation of our capitalistic system, which has brought about such a maldistribution of wealth production that it has gravitated and gravitated into the hands of—well, comparatively few. … It is a national disgrace that such suffering should be permitted in this, the wealthiest country in the world.” 

Eccles then laid out a plan for getting the nation out of the mire, which included spending billions of dollars on public works programs to build infrastructure and create jobs and hundreds of millions more on a social safety net to lift up the unemployed and impoverished. He also proposed refinancing farm mortgages at low interest rates and cancelling interallied debts. To pay for it—and further the goal of redistributing the wealth—the top marginal tax rate would be increased substantially. It was every bit as “socialist” as today’s aforementioned bills. 

And yet, Eccles was neither a Marxist, socialist, nor even a Democrat. In fact, the Utah Republican was about as capitalist as they come. He was one of the West’s most prominent businessmen, heading up a conglomerate of banks, a three-state dairy company, a major lumber company, and Utah Construction Company, which was involved in the building of Hoover Dam. Economic inequality, to him, was less a moral failure than bad for business: If the ultra-rich hoarded all the money, then the masses couldn’t purchase goods, bringing the wheels of capitalism to a screeching halt. Only government intervention could save the economy—and, for that matter, capitalism itself. 

“The orthodox capitalistic system of uncontrolled individualism, with its free competition, will no longer serve our purpose,” Eccles said. “We must think in terms of the scientific, technological, interdependent machine age, which can only survive and function under a modified capitalistic system controlled and regulated from the top by government.” And so, the New Deal was enacted later that year with a second phase implemented in 1939. It combined federal spending with financial reform, new regulations, and major social programs—many of which endure and which Boebert and her ilk surely would mock if they were proposed by Democrats today. 

The New Deal did just as Eccles had hoped: With the help of a top marginal tax rate as high as 94 percent, wealth was redistributed and the middle class grew, leading to decades of American prosperity. And by specifically targeting rural areas, many of them in the West, for public works projects and poverty alleviation, the New Deal helped narrow the urban-rural divide. For better or worse, capitalism was rescued by what some might call socialist programs. 

Fast forward to 2021. The U.S. is not in a depression—at least not an economic one—but the gap between rich and poor has yawned beyond pre-Great Depression proportions, the politics are pathologically polarized, the populace has been ravaged by a pandemic, and the economy has been thrown off balance by COVID-related restrictions, supply chain snarls, and rising inflation. To address these ills, on Nov. 5, Congress finally ripped a page out of Eccles’ playbook and passed the $1.2 trillion, New Deal-esque Infrastructure Investment and Jobs Act, and now the Senate is poised to vote on the even bigger Build Back Better Act.

At over 2,000 pages in length each, the bills are intimidating. But if Boebert were to actually read the things, she would find plenty of goodies for the Western U.S. and for her constituents in western Colorado. The following list is just a small sampling and is by no means complete. The infrastructure bill includes: 

$4.7 billion for federal agencies, tribes, and states to plug and reclaim orphaned oil and gas wells on public, private, state, and tribal lands. Left behind by energy companies, these wells can be major emitters of methane—a potent greenhouse gas—along with harmful volatile organic compounds, benzene, and hydrogen sulfide. Plugging them has other benefits as well: It can be part of a land-healing industry that provides jobs and an economic boost to communities abandoned by the fossil fuel industry, such as former natural gas hotspots like Garfield County, where Boebert resides. 

$11.3 billion for the Abandoned Mine Reclamation Fund, intended for cleanup and remediation of coal mines. Priority will be given to projects employing current and former coal mine employees. Boebert’s district is home to abandoned coal mines and coal miners, many of whom were also abandoned by their employers when coal profits declined. Another $3 billion will go toward cleaning up the nation’s abandoned hardrock mines. Boebert’s district, home to the notorious Gold King Mine spill of 2015, is pocked with thousands of abandoned, or “zombie” mines, many of which ooze acidic, heavy metal-laden waters into streams, compromising aquatic and sometimes human health. Cleaning them up will help water quality, fish, and people as well as providing jobs to out-of-work miners. 

$350 million for wildlife crossing infrastructure such as overpasses or underpasses or other measures intended to reduce road kill and motorist casualties. I mean, does anyone really think this is a bad idea? Apparently a bunch of Republicans who voted against the bill do. It’s potentially a boon to the rural Western U.S. and its wildlife, motorists, car bumpers, and auto insurance companies. 

$3.37 billion for wildfire prevention, detection, and suppression. Luckily, no one in Boebert’s district has to worry about wildfires! Oh, wait, umm … yeah, yeah we do. Some of the provisions in this one aren’t going over well with environmentalists, such as the $500 million for mechanical thinning and timber harvesting. But, once again, it will create jobs for forestry workers. And what’s more, wildland firefighters finally may get the respect they deserve: A new federal occupational category will be created for wildland firefighters; they will get a pay raise, and 1,000 seasonal firefighters will be converted to full-time, permanent, year-round federal employees.

$2.4 billion for water projects around the West, including water recycling and desalination facilities, plus another $300 million to implement the Colorado River Basin Drought Contingency Plan ($50 million of which goes to the Upper Basin, i.e. Boebert’s district) and an additional $400 million for aquatic ecosystem restoration—another piece of the land-healing industry/restoration economy and a job-creator to boot!

$8 billion for the development of “clean” hydrogen, which includes “blue” hydrogen fuel produced from natural gas so long as it’s paired with carbon capture (which does nothing to address the methane leaks from natural gas extraction, processing, and transportation). Boebert’s district includes several natural gas-rich counties where the industry withered when prices crashed in 2009. Many of those communities are now hoping to find salvation in blue hydrogen production. Socialism? Of the corporate variety, perhaps. 

I can assure you that state and local officials in Western states are salivating over that pile of money and are trying to figure out how to get some of it to their communities. But wait, there’s more—or will be if the Senate passes the $1.75 trillion Build Back Better Act as it now stands, including (but not nearly limited to):

$1 billion for the Rural Partnership Program, which gives grants for rural development. 

$3.05 billion for block grant funding for affordable housing, including $1.2 billion to address the housing and community infrastructure needs of colonias and resident-owned manufactured housing communities, with an additional $750 million for the housing investment fund, which would provide grants to non-profit affordable housing developers. 

$1 billion to establish a network of uplift incubator spaces for Main Street small businesses to spur economic development in underrepresented communities. 

$480 million to fund predevelopment activities and provide assistance to energy transition communities such as Paonia, Hotchkiss, Delta, and Craig—all in Boebert’s district—and Farmington, Gillette, Rock Springs, Page, Kayenta, and dozens of other Western towns, plus $5 billion to provide financial support to eligible entities for the purpose of enabling low-carbon reinvestments in energy communities.  

$441 million for tribal climate resilience and adaptation.

A total of $551 billion for clean energy and climate investments. 

Expanding the child tax credit and offering free pre-school to every three- and four-year-old. 

Expanding the earned income tax credit to childless low-wage workers, which would amount to a tax cut for thousands of folks in Boebert’s district. 

And, yes, it will also give incentives to folks to buy electric bikes and other electric vehicles as well as payroll credits for compensation of local news journalists

By now you might be wondering how the heck the government is going to pay for all of this (a question conservatives didn’t ask about the Trump tax cuts for the wealthy, which ended up costing the government—and all of us other non-wealthy taxpayers—trillions of dollars). Unfortunately the Build Back Better Act is not going to institute a 94 percent marginal tax rate on multi-millionaires, as was in place back in the 1950s to keep Mad Men executives from becoming Jeff Bezos-rich. Instead, it will try to close some loopholes, by, among other things:

Giving the Internal Revenue Service the resources it needs to pursue tax evaders who make more than $400,000 per year.

Raising the royalty rate on oil, gas, and coal extracted from federal lands from 12.5 percent to 18.75 percent to bring it closer to par with rates for state and private lands. The bill also increases the minimum bid per acre for oil and gas leases and does away with royalty reductions and noncompetitive lease auctions. Just as significant: The bill levies a royalty on all natural gas produced from a well, even if it is flared or vented, incentivizing companies to capture and market the methane—and thus reduce emissions—while also substantially upping royalty revenues. 

Raising the corporate minimum tax to 15 percent, levying a corporate stock buyback tax, and eliminating Medicare tax loopholes for the wealthy. 

Is this new New Deal perfect? Hell no. A lot of good measures, such as paid parental leave and a royalty on hardrock mines, were stripped out of it, not by Republicans, as one might expect, but Democrats. Still it has the potential to transform America’s economy and communities in the same way the New Deal did. Well, almost. One thing the New Deal had that the current bills don’t: The Works Progress Administration’s artist and writer projects.

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NOTE: We’ll be taking this Friday, November 26, off. Look for the next LAND DESK dispatch on Monday, November 29. And enjoy the holiday weekend, however you may commemorate it.