On March 31st, President Joe Biden introduced his infrastructure plan, “The American Jobs Plan” (https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/ ) It’s an omnibus $2 trillion plan to repair the major holes in America’s infrastructure, and to create jobs.
It’s useful to recall that, during the 2016 presidential campaign, former-President Trump promised to repair America’s infrastructure. In February 2018, Trump sent to Congress an $1.7 trillion infrastructure “plan” financed by $200 billion in new Federal spending and $1.5 trillion “from the private sector.” Trump didn’t follow through on his proposal and it died in the halls of Congress.
Nonetheless, Trump’s infrastructure “plan” was popular with voters. Similarly, President Biden’s plan polls well. A recent Reuters/IPSOS poll (https://www.reuters.com/article/us-usa-biden-infrastructure-poll-idUSKBN2BP126 ) found that “79% of Americans supported a government overhaul of American roadways, railroads, bridges, and ports.” And, “Americans also were largely supportive of ways that Biden has proposed to pay for his massive infrastructure bill. According to the poll, 64% of U.S adults supported a tax hike on corporations and large businesses, and 56% supported ending tax breaks for the fossil fuel industry.” However, when filtered through a partisan lens, the findings changed: “Only 45% of Americans said they would support a jobs and infrastructure plan that was ‘recently released by the Biden administration.’ Another 27% said they were opposed and the remaining 28% said they were not sure… only about two in 10 Republicans and three in 10 independents said they supported a Biden infrastructure plan, compared with seven out of 10 Democrats.”
Biden’s Plan: Here’s the first cut of the $2.15 Billion Biden Infrastructure/Jobs plan. Bear in mind that the entire plan will be modified by the (Democratically controlled) Senate and House.
1.Transportation Infrastructure: ($621 Billion) This allocates $174B for electric vehicles and charging stations. $115B for road and bridge repair. $85B for “modernizing transit systems. $80B for Amtrak repairs. $50B for “infrastructure resiliency,” funds to deal with climate-related disasters.” $25B for airport upgrades. $20B for underserved neighborhoods; “The President’s plan includes $20 billion for a new program that will reconnect neighborhoods cut off by historic investments and ensure new projects increase opportunity, advance racial equity and environmental justice, and promote affordable access.” $20B to “improve road safety;” $17B for inland waterway and port improvements; and $35B for related projects.
2. “Quality of Life at Home”: ($650 Billion) This allocates $213B to “build, preserved, and retrofit more than 2 million affordable homes and commercial buildings.” $111B for safe drinking water, $100B for “constructng or modernizing public schools.” $100B for new high-speed broadband networks. $40B to improve public housing. $18B for Veterans Affairs hospitals and clinics. $12B for community-college infrastructure improvements. $16B to “plug oil and gas wells and reclaim abandoned mines.” And $40B for related projects.
3. Caregivers for elderly and disabled. ($400 Billion) Biden’s plan will expand Medicaid to provide affordable, quality care for everyone who needs it.
4. Research, Development, and Manufacturing: ($480 Billion) Around $300B would be devoted to improving domestic m manufacturing capacity– including $50B for semiconductor manufacturing. $180N would be allocated to new research and development of clean energy.
As you can see, the Biden Infrastructure/Jobs plan collects many of the elements of previous plans and links them together. There are standard infrastructure improvements, such as roads, bridges, ports, and trains, and non-standard items such as home-improvement, removal of lead water pipes, and provision of a high-speed broadband network. The Biden plan provides funds to deal with the impact of climate change and funds to retrain workers to take on the jobs of the future,
5. Funding: President Biden estimates the infrastructure plan will be paid for within the next 15 years, if his newly proposed “Made in America” tax plan is also passed:
- Set the Corporate Tax Rate at 28 percent. “The President’s tax plan will ensure that corporations pay their fair share of taxes by increasing the corporate tax rate to 28 percent. His plan will return corporate tax revenue as a share of the economy to around its 21st century average from before the 2017 tax law and well below where it stood before the 1980s. This will help fund critical investments in infrastructure, clean energy, R&D, and more to maintain the competitiveness of the United States and grow the economy.”
- Discourage Offshoring by Strengthening the Global Minimum Tax for U.S. Multinational Corporations. “The President’s tax reform proposal will increase the minimum tax on U.S. corporations to 21 percent”.
6. Process: On April 12th, The House and Senate will begin work on the Biden infrastructure/jobs plan. It appears this will come up for crucial votes around July 4th. In the House, only a majority is needed to play the plan. In the Senate, it will also need a simple majority to pass because of a recent ruling by the Senate Parliamentarian (https://www.cbsnews.com/news/infrastrucutre-bill-american-jobs-plan-reconciliation-senate-parliamentarian/ ) “Parliamentarian Elizabeth MacDonough ruled that Section 304 of the Congressional Budget Act of 1974 can allow for multiple reconciliation bills per fiscal year. The parliamentarian is an expert on the obscure procedures of the Senate, and determines whether certain actions are permitted under Senate rules.”
BB prediction: something close to what Biden proposes will be approved by Congress.