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President Joe Biden announced a long-awaited infrastructure proposal on Wednesday to the tune of $2 trillion. The president unveiled the legislation at a union hall in Pittsburgh.
American Jobs Plan: This package goes far beyond general infrastructure improvements. The plan would also introduce millions of jobs to the economy as a way to complement the projects. The American Jobs Plan will invest heavily in repairing roads and bridges, funding transit projects, and rebuilding aging hospitals and other community centers. The plan would promote the use of electric vehicles and build the country’s clean energy processes and workforce. And this is just the tip of the iceberg.
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Funding the Plan: So what is the catch? The whopping price tag will be a hard sell for Biden as he looks to get Congress on his side to pass the sweeping legislation. During the announcement, the Biden administration detailed how it planned to fund the plan by raising the corporate tax rate to 28% from 21%. This rate would still fall below what businesses paid prior to massive tax cuts put in place by former President Trump in 2017.
Nicknamed the Made in America Tax Plan, this proposal would incentivize corporations for creating domestic jobs. It would also put a stop to profit-sharing tax havens. Additionally, the proposal would eliminate some of the most commonly used tax loopholes. According to White House projections, the spending that is incurred will be paid for in full after 15 years at this corporate tax rate.
Biden reiterated that he will not raise taxes on families making less than $400,000 per year, signaling that corporations will pay the brunt of the funding for the legislation.
Four Distinct Spending Areas: According to the Biden administration, the legislative proposal is divided into four distinct areas of spending.
- Transportation Infrastructure – $621 Billion: America’s crumbling transportation systems would get a huge boost should this legislation pass through the halls of Congress. Over one-quarter of the funding in this area would go toward electric vehicles, including building new green bus fleets, installing a network of electric vehicle stations, offering significant tax incentives and rebates, and more. This part of the legislation would also pay for repairing aging roads and bridges. The country’s mass transit system would also see a $165 billion lift with improvements to Amtrak, airports, and more.
- Quality of Life – $650 Billion: Biden said that he will also focus on the quality of life at home. This will come through improvements to schools, broadband expansion, and investment into the nation’s water infrastructure. As part of this bucket, $111 billion would be put toward providing clean drinking water and replacing all lead pipes. At least $100 billion would be set aside for modernizing the country’s public school system.
- Investment in Caregivers – $400 Billion: The Biden team will devote $400 billion to caregivers for the elderly and disabled as part of this proposal. This money would give more access to high-quality and affordable home care for those most vulnerable. The plan would also expand Medicaid so that more services would be available to those who need them the most. This bucket would increase the pay rate for caregivers, helping a large portion of women of color who typically serve in these types of roles.
- Research, Development, and Manufacturing – $300 Billion: This last bucket of spending is a catch-all for all of the additional improvements encompassed by this plan. This category includes the major initiatives designed to combat climate change, including a focus on research and clean energy spending.
Uphill Battle: There is no doubt that Biden and his team will face an uphill battle to pass this legislation. It is not likely that this bill will become a bipartisan effort without major concessions by the Democrats. If the Democrats fail to win the support of at least 10 Republican senators, they will need to try to pass the legislation through the process of budget reconciliation. This would only require a vote along party lines with the Democrats enjoying the tie-breaking vote with Vice President Kamala Harris.
Creation of Jobs Cabinet: Biden followed up Wednesday’s announcement with the declaration of a new Jobs Cabinet on Thursday. The president will assign five of his Cabinet secretaries to work as messengers with Congress to engage the public in the plan and work on getting the legislation through Congress. The five members of this specially-appointed Cabinet include Transportation Secretary Pete Buttigieg, Housing and Urban Development Secretary Marcia Fudge, Energy Secretary Jennifer Granholm, Commerce Secretary Gina Raimondo, and Labor Secretary Marty Walsh.
Now that the Biden team has successfully pushed through its massive COVID-19 rescue plan, it is clear that this new legislation will take center stage. Democrats are hoping to pass the legislation by the Fourth of July holiday.
