President Biden will travel to Pittsburgh, PA Wednesday to unveil a sweeping $2.25 trillion infrastructure plan to revamp the nation’s decaying highways and roads while at the same time aggressively combat climate change, an expensive project expected to be funded solely by enacting massive tax increase on corporations, that would in turn slow the economic rebound.
The proposal builds on his campaign “Build Back Better” which will be a two-step package proposal that comes on the heels of the passage of Biden’s $1.9 trillion American Rescue Plan Act. The first big government-spending package dubbed the “American Jobs Plan,” echoing the name of the COVID relief plan that Biden will outline in a speech includes generational investments in infrastructure, reviving domestic manufacturing, green-energy programs and position America to “out-compete” China by spending about 1 percent of GDP per year. It would also accelerate the fight against climate change by hastening the shift to cleaner energy sources and help promote racial equity in the economy.
According to the White House briefing Fact Sheet, the key cost of the $2.25 trillion “American Jobs Plan” includes $620 billion on transportation infrastructure with $115 billion of it devoted on roads and bridges, $400 billion towards elderly and disabled home care while also increasing the pay of the workers who provide that care, $580 billion in research and development, manufacturing, and training, and $650 billion on electric grid improvements, broadband internet access, and water systems. There is also $42 billion devoted for ports and airports, $100 billion for broadband, and $111 billion for water infrastructure — including $45 billion dedicated to prevent children from drinking water from a lead pipe.
“This is the moment to reimagine and rebuild a new economy. The American Jobs Plan is an investment in America that will create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China,” the White House briefing wrote in the document detailing the plan.
The plan seeks to repair and restore over 10,000 smaller bridges across the nation, along with the 10 most economically significant ones in need of a major fixture. It would electrify 20 percent of the nation’s fleet of yellow school buses. It would spend $300 billion to promote advanced manufacturing, including a four-year plan to restock the country’s Strategic National Stockpile of pharmaceuticals, including vaccines, in preparation for future pandemics.
However, the White House would not say how many jobs it believes the plan would create. A senior aide who briefed reporters late Tuesday would only say the plan would generate “millions and millions of jobs.” The new plan is a multi-year investment that would be paid over a 15-year period to fully offset the 8-year spending cost based on the new tax hikes proposed. The White House is positioning the proposal as temporary spending that’s being paid for by permanent tax increases.
The tax hikes that come along with Biden’s infrastructure package include raising the corporate tax rate from 21% to 28%, reversing former President Trump’s 2017 tax cuts as well as raising taxes on multinational corporations with a variety of measures to tax profits earned overseas from foreign organizations. The corporate tax overhaul would generate $2 trillion over the next 15 years, according to White House estimates. It also impose increasing capital gains taxes for the wealthy and returning to the Bush-era individual rate of 39.6 percent for those making over $400,000.
The second proposal, which the Biden administration plans to release in mid-April, is packed with Democratic priorities focusing on domestic agenda, including child care such as providing universal pre-kindergarten along with tuition-free community college, and healthcare programs.
The package after unveiling both proposals is set to be done under the reconciliation process, the only way Democrats can pass it with only 51 votes instead of the prescribed 60 needed in the Senate. It is also the only conceivable way the plan gets through Congress in order to possibly pass it by July the latest, a prescribed timeline the Biden administration has set as the goal, before the Summer recess and just ahead of the end of September government funding. Senate Majority Leader Chuck Schumer (D-NY) is appealing to Senate parliamentarian to allow Democrats to do more than one reconciliation bill based on the FY 2021 budget resolution.
Biden is hoping this time around to attract bipartisan support in Congress, unlike his COVID relief package that saw no GOP voting in support of it. However, it is already facing a steep climb up Capitol Hill with a handful of Democrats already issuing a warning to change the plan in terms of the imposed tax hike or expect a “nay” vote. Four northeastern Democrats Reps. Tom Suozzi of New York, Bill Pascrell, Josh Gottheimer, and Mikie Sherrill of New Jersey said they won’t support Biden’s tax hikes to fund his infrastructure and domestic proposals unless his plan repeals the $10,000 SALT cap on state and local tax deductions. With Democrats have a slim 219-211 majority, they can’t only afford to lose more than three from within to pass the bill along party lines
Republicans, as well as business groups, have already signaled opposition to the president’s infrastructure package, saying the proposed plan to fund the package by unwinding Trump’s 2017 tax cuts with the corporate tax increases would heavily hurt the competitiveness of American companies and push companies to keep profits and jobs in the United States.
Sen. Rick Scott (R-FL) blasted Biden’s infrastructure proposal as an “untargeted” plan that imposes an “unfair” tax hike in order to pay for the pet project. He argued that the president should “start following the proven economic playbook” he did as governor when investing in infrastructure and growing the economy at the same time.
“Instead of focusing on growing the economy so Congress has the money to invest in infrastructure, the Democrats want to binge spend $4 trillion – money we don’t have as we approach $30 trillion in debt – on an untargeted infrastructure plan, and raise your taxes to pay for it,” Scott said in a statement on Monday. “It’s time for Biden and Buttigieg to face reality and resist unfair tax increases. You can invest in infrastructure while growing the economy and jobs. I know it’s possible because we did it when I was Governor of Florida. The Democrats need to stand up for American families and start following the proven economic playbook we created in Florida.”