Biden Announces $1.2 Billion in Mega Grants as Republicans Target ‘Wasteful Spending’ in Debt Cap Standoff

President Joe Biden talks to reporters after returning to the White House in Washington on Jan. 30, 2023. Biden had traveled to Baltimore, Maryland, to talk about how the Bipartisan Infrastructure Law's funds are slated to help replace the 150-year-old Baltimore to Potomac Tunnel. Chip Somodevilla/Getty Images

President Joe Biden on Jan. 31 announced nearly $1.2 billion in mega grants for a series of infrastructure projects, including $292 million to build a new rail tunnel beneath the Hudson River between New York and New Jersey, which comes amid a government borrowing limit standoff with Republicans who are pushing for spending curbs.

The Department of Transportation (DOT) said in a release that Biden has announced that nearly $1.2 billion has been awarded from the National Infrastructure Project Assistance (Mega) discretionary grant program for a total of nine projects nationwide.

“After receiving over one hundred applications, we are proud to fund these nine infrastructure megaprojects across the country to create jobs, strengthen our supply chains, expand our economy, and renew America’s built landscape,” Transportation Secretary Pete Buttigieg said in a statement.

The projects include $250 million for the Brent Spence Bridge connecting Kentucky and Ohio, $150 million to replace the Calcasieu River Bridge in Louisiana, and $117 million for the Metra Commuter Railroad in Illinois to replace some 11 bridges and 4 miles of track structure.

Biden will travel to New York City on Tuesday, where he will tout the $292 million mega grant for the Hudson Tunnel Project that the White House said in a statement will result in 72,000 direct and indirect jobs during construction.

Hudson Tunnel

The Hudson Tunnel Project will renovate the 1910 tunnel that carries around 200,000 weekday passengers beneath the Hudson between New Jersey and Manhattan, which now runs at full capacity, resulting in bottlenecks and delays.

Passengers faced 12,653 minutes of delay in 2020 due to outdated tunnel infrastructure issues, the White House said. Delays occurred on 54 days and were caused by various problems with the electrical power, signal, and track systems.

The existing tunnel also faces problems due to seawater flooding from Superstorm Sandy in 2012 that damaged concrete, steel, tracks, signaling, and electrical components.

Besides revamping the old tunnel, some of the grant money will also be used to help complete the concrete casing for an additional rail tunnel beneath the river, make track modifications near Penn Station, and construct ventilation shafts and fan plants in New Jersey and New York.

Overall, the Hudson Tunnel Project is expected to cost $16 billion.

“When the project is done, the redundant capacity provided by a second tunnel will mean fewer delays and less risk for catastrophic disruption,” the White House stated.

Former President Donald Trump opposed the Hudson Tunnel Project back when it was called the Gateway Project, arguing that it wasn’t a priority for the federal government to fund and that the two states should bear more of the cost.

Biden’s trip to New York City comes on the heels of his stop on Jan. 30 in Baltimore to highlight the replacement of an aging rail tunnel there, where he pledged that government spending on infrastructure would boost economic growth and create jobs.

“When America sees these projects popping up across the country, it sends a really important message: When we work together, there’s not a damn thing we can’t do,” Biden said on Monday. “There’s nothing beyond our capacity.”

In total, the Mega program will invest $5 billion through 2026 to help rebuild infrastructure. In this particular application cycle, the DOT received applications for around $30 billion in funding, which far exceeded the $1 billion or so available for this round.

‘Wasteful Washington Spending’

Biden’s trips to Baltimore and New York that tout the massive infrastructure investment come as Republican lawmakers seek deep spending cuts in exchange for lifting the government’s legal borrowing limit.

Republicans have argued that enormous federal spending hurts economic growth, threatens to drown future generations in debt, and that the budget should be balanced.

“I want to find a reasonable and a responsible way that we can lift the debt ceiling but take control of this runway spending,” House Speaker Kevin McCarthy (R-Calif.) said on Jan. 29 during an appearance on CBS' “Face the Nation” program.

“I don’t think there’s anyone in America who doesn’t agree that there’s some wasteful Washington spending that we can eliminate,” he added.

Two dozen GOP senators have signed a letter to Biden, conveying their “outright opposition to a debt-ceiling hike without real structural spending reform that reduces deficit spending and brings back fiscal sanity back to Washington.”

McCarthy and Biden are scheduled to meet on Feb. 1, with the GOP lawmaker looking to press his case for spending cuts even though White House officials have said Biden won’t negotiate over the debt limit.

Much as they did in 2011, Republicans want to pair this year’s debt ceiling hike with spending cuts. Some veterans of the 2011 showdown see a tougher battle this time around.

“This year is going to be much harder than 2011, because of the shrill nature of the political discourse,” said former Rep. Charlie Bass (R-N.H.), who served in the House during that time.

Others think Washington will find a solution before the Treasury Department runs out of money.

“That’s what things like the debt ceiling are built for—they’re forcing mechanisms that create an artificial deadline,” said former Rep. Steve Stivers (R-Ohio).

Meanwhile, the Treasury Department announced on Monday that it plans to borrow $932 billion in private-held net marketable debt during the first quarter of 2023 and another $278 billion the following quarter, for a total of over $1.2 trillion.

Reuters contributed to this report.