The Technical Supplement to the 2026 Budget was just released. Apart from being over 1,200 pages long, it is indeed technical — not easy to read or understand, even for someone who has interest in these matters. In particular, the mechanics of federal cash budgeting are completely sui generis — plain cash budgeting might have a certain logic, but here everything is mixed with terms and categories that reflect idiosyncratic federal practices. Federal insiders will understand the language; to be fair, they are the primary audience. Outsiders like me can only make educated guesses.

The WIFIA program shows up on pages 953-955. The screenshot above is what I think are the critical numbers. The yellow highlight is alarming. Although the WH Budget Summary of a few weeks ago did not show any cuts to WIFIA, the Technical Supplement appears to do so. WIFIA’s prior appropriation level was about $72m — $65m for loan subsidy and $8m for operations. The $8m number proposed for FYE 2026 indicates that the program can keep operating, but there won’t be any new appropriations for loan subsidy.

The brief accompanying text is consistent with this interpretation — it pretty much says in lawyer-like language that while the continued operation of WIFIA is a statutory requirement, that’s all the program will be resourced for. In effect, no new loans: [1]

This appropriation supports all activities necessary for the implementation of the Water Infrastructure Finance and Innovation program established by the Water Resources Reform and Development Act of 2014….The $8 million request to implement the Water Infrastructure Finance and Innovation Act (WIFIA) program is for the Environmental Protection Agency’s (EPA) management and operation of the program, including contract support and associated payroll. The WIFIA program will be administered by EPA’s Office of Water.

Since WIFIA’s borrowers have very high credit quality, $65m of loan subsidy would support about $6 billion of financing — so the impact for the water sector is material.

The importance of the purple highlight is less obvious, but may actually be more concerning. Of course, the startling $1bn of mandatory appropriations for is for interest rate re-estimates, as long predicted on this site — here’s my last estimate, The Economic Cost of WIFIA’s Portfolio at FYE 2023. You can see that the sum of mandatory appropriations for FYE 2024 and FYE 2025 in the Supplement is about $1.6bn, which is in the ballpark of my estimates, though fortunately at the lower end. [2]

The concern is this: The fact that Trump Administration people focused enough on WIFIA to propose cutting $70-odd million from a successful program that finances water infrastructure means that they might also notice the $1.6-odd billion in mandatory appropriations the program has required. Ok, those don’t show up in the budget, so maybe most of the practical folks won’t care — but what about the more ideological ones? Or a technically curious DOGE boy looking to make a mark? And what about muni bond lobbyists who have more reason than ever to put potential competition in a bad light and show how necessary (and relatively efficient) their market is for delivering federally subsidized finance? [3]

I know the budget numbers will change, so it’s not likely that WIFIA cuts, if there are any, will be so drastic. It’s hard to predict where the re-estimate issue will go — there may be ways to manage the ‘narrative’ if necessary. Still — a defensive mindset might be called for.

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Notes

[1] It is possible that WIFIA has sufficient unallocated leftover subsidy to meet loan demand for FYE 2026 without needing further funding. But I somewhat doubt it — WIFIA usually gets more than enough applications to utilize its annual appropriated funding. There are about 69 ‘pending’ loans on their website — amounts aren’t given, but I’d guess the total is somewhere around $8-10 billion, which would require $80-100 million in subsidy, i.e., all of last year’s funding plus some more. Maybe the ‘unobligated balances’ line above holds a clue? Above my pay grade.

[2] I doubt anyone will dig this deep, but if you include the mandatory appropriations for FYE 2021-2023, the total to date is actually closer to $2.4 billion. The portfolio is now about 50% drawn (i.e. prior loan commitments that were drawn down into funded loans, which triggers the re-estimate), so the final total could go yet higher when the remaining old commitments are drawn, but perhaps by not so much. The actual number is not so important — it’s the ‘billion’ handle showing up in the current budget environment that might be a concern.

[3] There’s this Congressional letter from 2020 re municipal bond market support (what eventually became the Municipal Liquidity Facility). FWIW, note the signatory on page 3, as one of forty-three House members.

^{An AI-generated image of a Neo-Luddite rejecting the AI-based Neo-Narrative}

In prior posts, I’ve pointed out that those who develop and manage narratives, the Narrativators, are highly motivated, presumably very skilled, and likely hard at work on the neo-narrative in preparation for (among other things) the 2026 midterms. This crew will doubtless have the very latest AI multi-media tools at their disposal, which may well enable them to develop something far more powerful than any propaganda ever launched on a population. The stakes for the continuation of neoliberalism are existentially high, the funding sources infinitely deep, and the lessons of 2024 painfully vivid — how could they not succeed this time?

Well, they might not. The chance of that outcome may not be high — who knows? — but it strikes me that the possible origins of such a failure are worth brief consideration, if only as a marker.

The biggest and simplest factor could be that my assumptions about the Narrativators are wrong, specifically regarding their skills and ability to learn from mistakes. Narrative propaganda has, I think, been a rapidly innovating field since around 2008 and even ‘experienced’ Narrativators are likely experimenting a lot of the time. ‘Old’ skills might not be especially relevant; amazing new tools like AI will unleash feverish dreams of innovative approaches that are ‘sure to work’. Likewise, the fact of past failure might be obvious, but the lessons for going forward aren’t so clear. Especially because political mistakes aren’t exactly the same as neoliberal status quo-threatening mistakes. The Democrats’ mistakes last year were political by definition, and they resulted in the loss of the party’s institutional power. Those specific mistakes, currently being much analyzed and discussed, are presumably what will be avoided in future. In contrast, neoliberalism lost its previously effective camouflage in 2024. Rebuilding political power and reestablishing neoliberal camouflage, which so neatly (and fortuitously?) overlapped in 2008, might now involve very different and possibly inconsistent narratives — what do the Narrativators do then?

In short, the neo-narrative could fail in an old-fashioned way: the competence brought to bear was less, and/or the challenge greater, than was thought. More interesting and right up to date, however, are the ways that the involvement of AI itself in the development of the neo-narrative might contribute, not to success, but to the failure of the approach. Off the bat, I can think of three ways — doubtless there are others:

Sudden and widespread revulsion to AI super-slop: From its ancient beginnings, propaganda ‘narrative’ has always in a way been an intentional form of ‘slop’ — curated hallucinations spinning a plausible, but not actually true story. With AI tools, the hallucinations can be more realistic, more personalized, more pervasive — just more everything. The Narrativators will be sorely tempted to push the dial to ’11’, whereupon the resulting ‘super-slop’ may cause overload, annoyance and ultimately revulsion. People will by then have enough multi-media AI in their lives anyway and won’t be easily amused or distracted by yet more of it coming through their screens. For personal economic and social matters, they’ll turn to their own uncamouflaged lived experience, which will be increasingly disconnected from AI virtual worlds. They’ll make political decisions accordingly, uninfluenced and mostly uninfluenceable by the neo-narrative. [1]

Neo-Luddite reaction and resentment: Ah, the Luddites — that ever-handy meme of early 19th century ignorant deplorables smashing the very machines that were to give their descendants (that’s us!) so much prosperity. The meme’s cautionary tale will of course be instantly applied to any modern-day folks who express fear and loathing about AI’s job-killing potential. Presumably, the ones who don’t wish to be considered ignorant or deplorable will then back off — right? Maybe not — this time might be different, for two reasons. First, even in the early stages of the Industrial Revolution it was clear that growing mechanization would require more, not less, labor. Why? Because up until recently machines were powerful but dumb, and averagely smart people were needed to run them. Now machines can be both powerful and at least averagely smart (usually far more); it isn’t clear at all what will happen, and very well-informed pessimism can be justified. [2]

Second, and more importantly for those folks who would otherwise fear the Luddite label, AI is coming for white collar jobs, big time. They may on one level be persuaded that their personal job loss is just part of society’s transition to a glorious future, but on a visceral level, there’ll be old-fashioned, where’s-my-hammer-type anger and resentment. Perhaps the latter will frequently be secretive and partially suppressed, but it’ll likely be a lurking influence on privately made decisions.

Neo-Luddism will undermine any neo-narrative that includes the ‘wonderfully positive transformative’ impact that AI will have on society and our collective material well-being. (Yes, looking at you, ‘Abundance’ proponents.) Less directly, to the extent that the use of AI multi-media is detected in the selling of any neo-narrative (whether pitching AI futurism or not), lurking neo-Luddite anger will help trigger or at least add to the revulsion described in the first point — there’ll be a lot of ‘touchy’ people out there.

AI tools used to expose the truth: It is conceivable that the use of AI tools becomes sufficiently widespread that any propaganda, much less narrative, depending on a poorly informed population becomes ineffective. Yes, I know — it’s unrealistic to think that there’ll be a sudden thirst for truth and knowledge, especially given the state of US education. But AI might enable more individuals to package and distribute more ‘truth adjacent’ or ideological material than before, and that might be influential on the margin. Perhaps the role of independent media (enabled by new social media tools) in the 2024 incineration of the old woke narrative is indicative — more like that, but with AI tools?

This possible path of AI usage development has specific relevance to federal infrastructure finance reform, as discussed in prior posts. Could even be a central factor in deep reform of such a technical area. So, I’ll be coming back to that topic often in future.

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Notes

[1] In historical terms, I think this type of ‘overnight rejection and revulsion’ has precedents for happening rather quickly — from ‘divine right’ to the guillotine in a few years? Or the pre-Reformation ‘indulgence narrative’ (complete with advertising jingles!) triggering a reaction that soon led to widespread (and actively destructive) iconoclasm. A more specific example for neoliberals who feel that they’ll be covered by a narrative, one way or another, learning about the fate of French Pre-Revolutionary tax farmers would be…edifying. Just saying.

[2] One big population did lose out quickly and permanently in the Industrial Revolution — horses. Powerful, flexible and (in terms of their tasks) smart animals — but not smart enough. That population would have had ample reason to be pessimistic in the 19th century. Yes, overall wealth would clearly increase. But other than a small minority (racers, show, pets, etc.), they weren’t going to get any of it.

No doubt the 2026 midterms will be profoundly consequential. It’s the first scheduled national-level test of whether the Trump revolution is a reversible aberration or a real threat to the neoliberal status quo. However, even if the current crew of revolutionaries prevails in 2026, that doesn’t mean their particular vision will become a new, post-neoliberal status quo — far from it. A pro-revolutionary result will only mean that fundamental change has wide support. Beyond that, things are unpredictable, e.g., neither Napoleon nor Lenin were predictable in 1789 and early 1917, respectively.

Note also that a pro-revolutionary result doesn’t necessarily mean that the Republican party will retain or increase its Congressional majorities. It probably does, but it is possible that over the next eighteen months or so the Trump revolution loses energy and devolves into some form of neo-narrative neoliberalism. It is also possible, though unlikely, that the Democratic party undergoes a radical transformation and rejects neo-narrative neoliberalism. In that case, a Democrat electoral victory would be flying the revolutionary banner. The essential point is that developments leading up to and including 2026 midterms can be characterized as a focused battle between neo-narrative and ideological power, with red/blue institutional power being a very important, but fundamentally secondary, factor.

Eighteen months is an eternity of time in politics, but maybe not much at all to create and inculcate a neo-narrative that will effectively camouflage the ongoing social and economic depredations of neoliberalism. I think we’re seeing the beginning of serious work on the project, or the surfacing of work that’s already been done. There’s a lot at stake — the failure of the last neoliberal narrative in 2024 resulted in the election of Trump, this time they better get it right before the revolution solidifies.

Like the varying colors and shapes of camouflage for different environments (e.g., jungle, desert, urban, etc.), the neo-narrative will have to be somewhat customized for different political audiences. But since it has to be effective across a landscape large enough for electoral power, a degree of uniformity is required, or at least not jarring and obviously opposed discontinuities. And the Narrativators will have to make the neo-narrative workable at the interstices of the power quadrant I sketched out in a previous post, From an Unstable Mix of Forces, a Possible Path. These interstices are where interesting stuff will happen for the next eighteen months, I think.

Interstice 1 — New Left and Establishment Democrats

As you’d expect for a party that recently lost elections, institutional power is weakened, and the factions are actively fighting. Some of the action bubbles to the surface, which is useful to get hints as to what the Narrativators are doing. It looks like, as expected, the ‘Abundance’ neo-narrative is the main approach, perhaps in testing mode. But it’s encountering ideological resistance, as described in The Coming Democratic Civil War.

A civil war has broken out among the Democratic wonks. The casus belli is a new set of ideas known as the abundance agenda. Its supporters herald it as the key to prosperity for the American people and to enduring power for the liberal coalition. Its critics decry it as a scheme to infiltrate the Democratic Party by “corporate-aligned [i.e., neoliberal] interests”; “a gambit by center-right think tank & its libertarian donors”; “an anti-government manifesto for the MAGA Right”; and the historical and moral equivalent of the “Rockefellers and Carnegies grinding workers into dust.”

Interstice 2 — Establishment Democrats and Traditional Republicans

Since both sides of this interstice are on board with the underlying neoliberal agenda and understand the need for effective camouflage, things are easier for the Narrativators here. Their neo-narrative can be customized with a few unessential issues and differential emphasis to create the illusion of a red/blue divide, but the same primary themes should work for both. The ‘Abundance’ narrative would seem to be ideally suited for this purpose — maybe this interstice is where it came from originally?

Interstice 3 — Traditional and MAGA Republicans

Although the Republican party has the most institutional power that it’s had in a while, the ideological gap between the Traditional and MAGA wings is profound, because it’s essentially the difference between nearly pure neoliberalism and actual post-liberalism. There’s a civil war there, I think, waiting to happen. An ‘Abundance’ neo-narrative doesn’t need to make the MAGA folks particularly happy, but it can’t be too blatant or enthusiastic about some things that the neo-narrative needs for Democrat unity. For example, re renewable energy and other green economic matters — Texas becomes front line of GOP civil war over energy — could force a showdown that the neoliberals of both parties want to avoid.

Interstice 4 — MAGA Republicans and New Left Democrats

This interstice is the most interesting. The two sides would appear to be utterly opposed except for one thing — neither buys the neoliberal story, regardless of narrative, neo or not. This doesn’t pose much threat to the Narrativators as things stand because the sides’ ideological power is mostly directed against each other. But should that change, and some consensus about some things arise, the overall landscape could become uncamouflaged — that is, ideological — quickly and the neo-narrative (whatever it happens to be) will fail. At that point, the real reaction against neoliberalism decisively begins — and the Narrativators are likely left to consider career alternatives.

ChatGPT-Opinion-Piece-on-Abundance-Narrative-and-Public-Infrastructure-05272025

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Here’s another AI exercise with my new, free friend ChatGPT, who hangs around on the internet waiting for me to call. Of course, there is human agency involved (me) — I set it up with a series of questions I’ve been thinking about as I follow the ‘Abundance’ debate. Here’s the complete transcript, including two other [Your Name] op/eds in Atlantic and Jacobin styles, respectively. The op/ed above was requested in ‘polemic’ style — the other two are calmer.

The debate is important because I think it surfaces the development (and perhaps early-stage testing?) of a ‘neo-narrative’ to camouflage the continuation of status quo neoliberalism. A neo-narrative that is acceptable to moderate Democrats would appear to be critical to at least partially unify the party (which is apparently close to ‘civil war’) in preparation for the 2026 midterms. Or so it seems to me, as an outside observer and non-expert.

Btw, in case it’s mysterious why I’m following this stuff at all (when I’d rather be doing detailed analyses of technical aspects of federal infrastructure loan programs, where I do have some expertise), here’s a super-short explanation: My big goal is to see a reformation of federal infrastructure finance — explicit policy objectives with a major expansion of capacity and capabilities. That’s not going to happen until & unless American public infrastructure — and the federal role in it — becomes an important issue in the context of ideological battles over neoliberal status quo or post-neoliberal reform. So, I try to understand how the overall picture is developing, as best I can. Also, it’s just all kind of interesting, no?

This particular ChatGPT ‘discussion’ was, to be honest, more for amusement than enlightenment. I was almost asking the poor thing to bash itself & its makers (which no doubt it would do cheerfully for much harsher questions, up to a pre-programmed point anyway). But as usual, there’s a slightly disturbing element. The whole exercise took about ten minutes and the op/eds aren’t bad — what does this say about the way that future multi-media ‘narratives’ will be developed and refined by serious professionals? Or the effectiveness of those ‘narratives’ in fundamental social and economic battles? Something is very new here — historical parallels about the printing press, radio, etc. may not be applicable. I don’t know, and I doubt anyone else does either. But we’ll find out, maybe soon.

“…An abundance of rent-based private-equity profits will easily spring.”

^{Johann Tetzel, Indulgence Programs Office Director}

I continue to monitor what might happen to DOE’s CIFIA loan program. It is confusing, which probably reflects internal ideological battles within the Administration. Here’s a hint one way: DOE to name new loan program director Former Apollo hedgie, ‘bitcoin operator’?

On the other hand, there’s this previous hint: DOE seeks market value of clean energy loans Shuttering the office?

Ideological confusion is inevitable if federal finance for infrastructure or major production facilities is seen as some kind of ‘indulgence’ granted for either idealistic special policy objectives (e.g., saving our sinful climate souls) or to influence-wielding rent-seekers (e.g., for building cathedrals of private-sector wealth). But note that a practical result doesn’t require a resolution of this dilemma — confusion may in fact be preferred.

My pessimistic guess for the LPO is that after a bunch of the more egregious ‘green new scam’ stuff is performatively thrown overboard, the so-said ‘bitcoin operator’ (or similar individual) will get down to business — subsidizing finance for energy production for AI data centers and bitcoin mining, for enabling monetization of whatever lucrative bits of the green new deal remain, and for transmission and pipeline infrastructure that can make it all profitable, likely with some form of federal eminent domain. On the surface, it looks like ‘Making America Great Again’ — but in reality, it’s just a continuation of debt-fueled neoliberal misallocation, albeit with new & improved neo-narrative packaging. In such a milieu, the CIFIA program may well survive and even prosper.

For real change, a ‘reformation’ is required in federal infrastructure finance. First, its national-level social & economic policy objectives must be made limited and explicit. Second, though equally important, there must be a brutally realistic assessment of federal financing strengths and weakness in the context of achieving those objectives.

Such a reformation is a daunting prospect. It likely won’t happen until it has to. But in the meantime, there’s plenty of groundwork to be laid — when real change comes, history suggests that it tends to move very fast.