Bridges and divides: America’s infrastructure push

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Of $45 for a three month plan equivalent to $15 per month. Required new customer offer for first three months only. Speed slow after 35 gigabytes. If network's busy, taxes and fees extra. See mintmobile.com. Hello and welcome to the Intelligence from the Economist. I'm your host Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. In Zambia, voters ostensibly have a choice today. The incumbent, Edgar Lungu, or his most credible challenger, Hakainda Hichilema, who's on his sixth run for the presidency. We ask just how fair the fight really is and what it means for the country. And Germany is girding for its own federal election next month. The country's complex electoral system makes this one an unusually wide open contest. Fear not. Our journalists have cut through the data and built an up to the minute election tracker. But first.

On this vote, the yeas are 69, the nays are 30. The bill, as amended, is passed.

Late on Tuesday, America's Senate passed a landmark infrastructure package worth $ trillion. Nineteen Republicans joined the entire Democratic caucus in backing the bill, which was hailed by Senator Rob Portman, the lead Republican negotiator, as a bipartisan success. To me, not only does this investment make Sen. But importantly, what we're doing here today.

Also demonstrates to the American people that we can get our act together.

More than half of the mammoth package is earmarked for America's biggest investment in decades in roads, bridges, airports and improved Internet access. But it won't be signed into law. Just yet. In the early hours of yesterday morning, the Senate fired the starting gun for the drafting of a separate budget bill. It's a monster. At three and a half trillion dollars. It's packed with new social program and climate measures and will be far harder to get through the Senate. But now they come as a pair. Neither bill will arrive on the President's desk without the other. If they do, they'll be signed into law and will put far more than just the country's bridges on a firmer footing.

President Joe Biden has staked his presidency on an agenda that he calls building back better.

Idris Kalun is our Washington correspondent.

That involves a proposal to spend roughly $4 trillion on classical infrastructure like roads and bridges and climate change research and massive expansion to the American safety net. After it was rolled out in April, not a lot had happened, to the point where people started to doubt whether Biden would actually be able to achieve what he set out to do. So what's changed, what's happened now is that the tactic that the White House had decided on, in which they would divide their infrastructure plans into two portions. One, a smaller bipartisan package that could attract Republican votes, and the second, a much bigger partisan package that could have everything else. That strategy appear to bear some fruit, but there's still going to be a lot of haggling in the future because Democrats, including House Speaker Nancy Pelosi, are convinced that one bill will not be able to pass without the other.

Okay, so tell me a bit more about what's in each of these bills.

The bipartisan bill which just passed includes a lot of spending on things that basically Democrats and Republicans can agree on. Roads and bridges and replacing lead water pipes and getting closer to universal broadband. And by and large, these have not been met by substantial tax increases because Republicans would not have agreed with them. The second bill, which is the one that is going to be set out by Democrats and is going to be written in the weeks ahead that will be close to a trillion in spending on climate change and mitigation, electric vehicle charging stations, research, et cetera. A lot more spending on safety net benefits like child tax credits and expansion of Medicare. And it's going to be matched by the tax increases. So much higher taxes on high income people and companies, as well as minimum taxes for American multinationals as a way of funding all of this.

And you mentioned the tactic here was to break it up into two bits, the bipartisan part and all of the rest. How was Mr. Biden able to get the bipartisan support for part one.

Well, the bipartisan bill was nearly in its death throes a couple of months ago. What happened was moderate Democratic senators who really hold the key to passing Mr. Biden's agenda, were insistent that some portion of this infrastructure package be bipartisan. And they were basically given the task of negotiating a compromise that would pass. And the way that they managed to do it was to basically not include very many tax increases and to also focus on the very narrow set of things that Republicans said that they could agree on.

And why this pointed effort to make it bipartisan? Don't Democrats currently have a majority in both the Senate and the House?

I think that it is in the best interest of Biden to show that he has some bipartisan chops. You know, he talked before he arrived in the White House of unity. And it's good to get the moderate Democrats on side before they debate the second portion, which will be extremely partisan. And if they veto it, basically the bill would die. And for Republicans also, it takes a bit of the pressure away from the Democratic calls to undo the filibuster, which for Most legislation requires 60 votes in the Senate and was proving to be a significant hindrance to Democratic ambitions. So the fact that they've managed to pass a compromise bill I think helps out in that regard as well.

And as for the second part of the plan here, the much larger budget bill, what's going to be required? How might that come to be a reality?

Democrats have just started the process of organizing that bill together, and what they're going to do is use a special procedure called reconciliation, which allows them to sidestep the threat of a filibuster. So essentially, rather than needing 60 votes in the Senate, they'll be able to pass it with 50, plus the tie breaking vote of Kamala Harris, the Vice President. That process is starting now with the passage of a budget resolution, which basically will start the drafting of all the legislation, which will then be rolled up into one massive package. The White House wants this to be roughly 3.5 trillion in spending. Because this special process can only be tied to the annual budget, Democrats will not have that many opportunities to use it. That is why probably this bill is going to be gargantuan. It's going to include everything that they could hope to pass, especially because as I look ahead to the midterms, it's unlikely that Democrats, based on historical precedent, are going to be able to keep their very narrow majorities in the House or even in the Senate. So a lot of the priorities that Biden came to office with will probably need to be in this bill, or there's a good chance they might not happen at all.

And as you say, it will come with a gargantuan price tag. I mean, what are the implications of spending that much?

Yeah, it will be expensive. So already this year, the federal government is expected to run a $3 trillion deficit. That's roughly 13% of GDP, and it's among the highest of any president in their first year in office. Then you add to that the massive ambitions of the spending package. What we've seen from Democrats already is they propose tax increases to pay for some of the infrastructure spending that they're planning, but they've also left themselves room to deficit finance 1.75 trillion of their spending. So while there's going to be some emphasis on balancing all of the spending, it might also be the case that deficits continue to climb from here.

And you said that Mr. Biden has staked his presidency on this push. This could be the biggest legislative legacy of his presidency. What if he gets his wish?

Assuming he's able to navigate the economic headwinds of spending trillions of dollars successfully, if he gets his wish, he will, I think, pretty substantially remake how America looks. There's never been a climate spending policy on the order of a trillion dollars. The ambition to drastically reduce emissions in America has really never had any policy heft behind it. And at the same time, the safety net in America would also be substantially bolstered. So that would, I think, quite substantially change how Americans think of and interact with their government, and it would all be balanced on a much higher tax rate. That's a very different America from the one that we're living in now. So the next few months will be quite critical in determining whether Biden and his enormous ambitions actually manage to achieve that sort of transformation.

Thanks very much for your time, Idris.

Thanks for having me.

Today, voters in Zambia go to the polls. For a decade, one party has ruled the country, the Patriotic Front, or pf. Its leader, President Edgar Lungu, has been on the campaign trail, campaigning. But I want you to know that.

You have got the right to vote.

And use it wisely. And so has opposition leader Hakainda Hichilema, who has stood for the presidency five times before. Twice already, Mr. Lungu has defeated him narrowly, and it looks to be close again. Mr. Hichilema seems to be gaining ground in key urban areas, including the capital, Lusaka. But civil society groups accuse President Lungu's Patriotic Front of using the power of the state to bully voters or to buy them off.

Things are pretty grim in Zambia.

John McDermott is the Economist's chief Africa correspondent.

In 2015, the current president, Edgar Lungu ascended to office. His tenure has been associated with a stagnation in the economy, widespread corruption and a rise in human rights abuses. And while there are some external factors going on here, Zambia is Africa's second largest copper producer and until recently the copper price has been low. Plus we've had Covid. The main reason has been his terrible running of the country. So Zambians are feeling frustrated and they're feeling angry at the impoverishment that's happened under Mr. Lungu.

And so what alternative do they have then? Who is standing against the incumbent?

The main opposition candidate is a man called Hakayundi Hitchelema, otherwise known as HH. Fellow citizens, 12th August 2021 is a very important day in our history. It's a day when we decide whether we continue with the poverty, the unemployment, the hunger or we decide. He is an economist by training, he's a businessman and he basically has two aims for Zambia. The first is to restore some sanity to economic policymaking. And the second is root out the corruption that has blossomed under Mr. Lungo. This is almost certainly his best chance at the top job. In the past, his minority Tonga ethnicity and the sense in which he is quite close to Western business interests have meant that he's treated quite warily amongst some Zambians. But he has done a good job in presenting himself as a more unifying force this time around. And he also benefits from from the widespread frustration about deteriorating living standards. And as far as we can tell, even though there isn't a lot of polling in Zambia, if this were a fair fight, HH would win narrowly.

You say if it were a fair fight, as if to say that it's not going to be.

No, it's not going to be. There's a reason why the vast majority of incumbent presidents in Africa win re election. And that's because they often marshal the resources of the state to ensure they stay in power. Mr. Lungu's done the same. He has used state largesse to buy off swing voters. There has been widespread intimidation of opposition figures by so called cadres linked to Mr. Lungu's party, the Patriotic Front. State media is systematically biased against any opposition party. The ostensibly independent election commission is looking increasingly biased. And on and on and on we go.

Well, in a sense this feels like a familiar story. African strongmen leaders using the power of the state to make sure that they remain strongman leaders.

It is.

But Zambia is different in some important ways. In 1991, it was one of the first African countries to move from one party rule to hosting multiparty elections. Its founding president, who died earlier this year, a man called Kenneth Conda, he resisted the move to democracy, but ultimately he did the country a huge favor by going quietly and peacefully. And that wasn't the only time Zambians have taught the rest of the continent a lesson in democracy. In 2011, there was another case of a peaceful transfer of power. So for much of its history, while it hasn't attracted huge amounts of international attention, it has actually been something of a trailblazer for African democracy, which is why the restrictions on civil liberties and the authoritarian slide under Mr. Lungu is depressing as well as worrying.

And so what does that decline in democratic norms look like on the campaign trail? Is HH being given a fair shake?

No, not really. The government has used Covid related restrictions to justify not allowing HH to travel, not allowing helicopters for his party to visit rural areas. And somehow these Covid related restrictions have not applied to the President. There's also been some more disturbing moments. HH's convoy was shot at when he was trying to get to church.

And.

And while there has been some violence allegedly linked to cadres from the main opposition party, monitoring groups suggest that the vast majority of the violence has been perpetrated by groups linked to the ruling party. And frankly, can you ever say it's a fair democracy when one side can campaign freely with all the largesse of the state and the other side can barely get their word out?

So given all those obstacles, do you think there's a chance that Mr. Lungu could be unseated in this election?

There's a chance. The election is very much in the balance. I think, though, it's unlikely that we'll get a clean result either way. There could well be legal challenges, there could be demonstrations on the street, and given the amount of guns at the disposal of the Zambian security forces, there's also a risk of violence as well. So I think it's important for the international community to start preparing for the worst, even as they hope for the best. When I spoke to him, HH called this the most important election in Zambia's history. And I think, frankly, it's hard to disagree.

Thanks very much for your time, John.

Thank you, Jason.

Next month's federal election in Germany will mark the end of Chancellor Angela Merkel's 16 years in power. German politics can be difficult to get to grips with. There are, as elsewhere, plenty of parties and acronyms in the mix. Ms. Merkel's is the Christian Democratic Union, or CDU, party in the state of Bavaria. The CDU has a sister party, the Christian Social Union, or CSU. Those sister parties choose a joint candidate for Chancellor this time. Armand Laschet.

Wal Kampf.

Kempfen is geht um. Then there's the Social Democratic Party, the spd. Spd. For eight years it's been in government as the junior coalition partner to the CDU and CSU and is led by Olaf Scholz. There's the Free Marketeers, the Free Democratic Party, the hard right alternative for Germany, the AfD, and the left, which leans pretty far to the left. And then there are the Greens, a party that soared in popularity since a bad election result in 2017. Their candidate for Chancellor is Annalena Baerbock. One of the few seeming certainties of German politics is that the eventual new government will be made up of a coalition of two or three of those diverse parties. That's mostly down to a system of proportional representation and the fact that all those parties and acronyms have split the vote so many ways. As for voters, well, they've got something of a split ticket too.

So the German electoral system is unusual in that voters have not one, but two votes.

Wendelin von Bredo is a Europe correspondent for the Economist and is based in Berlin.

So the system combines direct and proportional representation to give the fairest outcome. But it also means that it's harder for one party to win a majority. Since 1961, not a single party has won a simple majority of seats in the Bundestag.

So the two votes, the direct and the proportional ones, how do they work?

So the first vote is to elect the local MP directly, and half the seats in the Bundestag are allotted this way. And it's first past opposed. Easy peasy. The second vote, however, is the more important one because that's for a party. And the second half of all seats are being proportionally divided according to the party's share of the votes. So it all means that the system is notoriously difficult to predict. And you can have a very popular candidate and he's still not going to be the next Chancellor because his party or her party may not get the highest share of the votes.

Guessing the outcome of German elections is, as you can imagine, a tricky business. But why guess when there's so much historical election and polling data to crunch through? Elliot Morris, one of our data journalists, has built a model and an Election Tracker to do just that.

Essentially, we're trying to tell readers how many seats each party will get, but not just by relying on the polls, which can be quite noisy and sometimes inaccurate. So instead we've built a model that takes into account how wrong they've been in the past, how wrong they could be this time. And we've done that by incorporating data on each party's past performance as well. So our aggregate should react just enough to real changes during the campaign that cause lasting shifts in the polls, but not overreact to events and give false predictions and precision.

And there's been a lot of talk in recent years about pollsters and their inability to see what's coming. How have you tried to get around that? How robust would you assert this model is?

Well, we've tested our model on every previous election in Germany since 1953. And if you were to use our model on the election day, it would have a larger margin of error than a normal polling average, just by a bit. About 2 to 3 percentage points for the smaller parties like the Free Democrats and the Greens, and slightly larger three to four points for the Christian Union. And that reflects the historical error in predicting those parties vote shares. But our model is better at predicting election results than the polls way ahead of election day. So we found it to be roughly a quarter 25% more accurate than the polls about two or three months before the election. Now, of course, our model is not 100% accurate. No model is. But we think the whole point of modeling is to figure out how inaccurate we could expect the polls to be this time so we can calibrate our expectations.

And given that, what are your expectations in the round, what is the model predicting at the moment?

Well, as of this week when our model went live, it predicts the largest party almost certainly should be the Union of the Christian Democrats and Christian Social Union. So that would very likely mean a CDU led coalition with the Greens or the Free democrats making the CDU's leader, Armin Lashet, the next Chancellor. But the model has spied a potential upset. If the Social Democratic Party gets enough votes to team up with the Greens or the Liberals. That would mean there'd be an SPD chancellor or maybe the Greens, depending on who wins more seats. And they're pretty close in the polls, and the CDU would be out of power for the first time in more than 15 years.

Elliot, thanks very much for joining us.

Thanks for having me.

For up to the minute analysis right up to the election, keep an eye on our Germany Election tracker. Find it at economist.com Germany Model. That's all for this episode of the Intelligence. If you like us, leave us a rating and a review and see you back here tomorrow.