President Joe Biden presented a $2.25 trillion U.S. infrastructure plan on Wednesday, setting the stage for a drawn-out battle over his second big economic program after his pandemic-relief package’s relatively smooth sail through Congress.
“We’re going to bring everybody along,” Biden promised in unveiling the new plan in Pittsburgh, saying that past economic growth had left out large swathes of American society. “We all do better when we all do well.”
The “American Jobs Plan,” as the administration is calling it, lays out an eight-year program that includes $620 billion for transportation and $650 billion for initiatives such as cleaner water and high-speed broadband. Biden’s plan would also allocate $580 billion to American manufacturing — which would include $180 billion for the biggest non-defense research and development program on record and $400 billion toward care for the elderly and disabled.
“It’s time to build our economy from the middle out,” Biden said, saying his plan “rewards work, not just wealth.”
He added that it is “not a plan that tinkers around the edges.”
But Biden will face fierce opposition from Republican lawmakers, especially over his proposal to pay for the package with tax increases. The president wants to raise the corporate income tax to 28 percent and set a 21 percent minimum levy on global corporate earnings. While the spending would be temporary, the tax hikes would be permanent — at least until new legislation is enacted to change them.
The plan is also focused on addressing inequalities, and what the administration vows will be the creation of millions of jobs — many of them in unions.
Biden spoke at a carpenter’s training center in Pittsburgh and was introduced by a union member.
Biden’s plan will prove far more complex to enact than the $1.9 trillion pandemic-relief bill the president signed into law earlier this month. Republicans are staunchly opposed to tax increases, and the breadth of measures will invite partisan battles as well as discord between moderate and progressive Democrats.
Senate Minority Leader Mitch McConnell said Wednesday, “it’s like a Trojan Horse that’s called infrastructure. But inside the Trojan Horse is going to be more borrowed money and massive tax increases on all of the productive parts of our economy.”
Administration officials say Biden is open to input from lawmakers of both parties on what provisions should be in a final package and how to pay for them. The White House expects to have robust outreach to GOP lawmakers and is committed to a serious discussion with them, a White House official said on the condition of anonymity. That effort began with inviting Republicans from relevant committees to briefings with Brian Deese, the National Economic Council director.
But an infrastructure-spending bill doesn’t necessarily need Republican support to become law. Congressional Democrats could choose to fit many of the president’s proposals into one or more budget reconciliation bills, which require only a simple majority vote in the Senate — though some elements may face parliamentary-rule challenges for inclusion in such legislation.
A key theme of the program is bolstering U.S. competitiveness against China. There’s $50 billion earmarked for domestic semiconductor manufacturing, and $40 billion more in upgrading research capacity in laboratories across the nation.
Climate change is also a major target. The transportation funding proposed specifically directs $174 billion to electric vehicles, including sale rebates and tax incentives for consumers to buy American-made cars.
What Biden laid out in Pittsburgh is the first part of his long-term economic program, and he plans to unveil a second round of initiatives in mid-April. Those will focus on “helping families with the challenges like health care costs, child care, and education,” the White House said.
Pittsburgh has reoriented itself from being the hub of the steel industry to a growing region for modern industries, including health care and technology. The administration wants to help seed similar transformations in working-class cities and towns across the country.
House Speaker Nancy Pelosi told her caucus members Monday that she aims to move the infrastructure bill through her chamber by July 4, though it could slip to later that month, according to a person familiar with the matter. That timeline could allow for the Senate to pass the final version before Congress’s monthlong August recess.
Companies reacted with a range of responses. The U.S. Chamber of Commerce, Business Roundtable, and other business lobbies strongly opposed raising the corporate income tax rate. But some companies hailed the planned investments.
“We support the commitment of the American Jobs Plan to build the modern, climate-resistant infrastructure needed for a clean-energy future,” said Katy Brasser, a spokeswoman for Eaton Corp., which makes components and software for power management, in an emailed statement.
United Parcel Service Inc. refrained from an outright endorsement, while saying it “supports greater investment in America’s infrastructure to enhance goods movement, alleviate congestion and promote U.S. economic competitiveness.”
Economists have largely held off from projecting the economic impact for now.
“Given the uncertain path to implementation, and the lack of detail on Part 2 of Biden’s agenda, we have yet to incorporate it into our GDP outlook,” Jefferies economists Aneta Markowska and Thomas Simons wrote in a note Wednesday. “But, taken at face value, the plan creates roughly 0.5-1.0 percentage point of upside to our current 2022 forecast of 5.2 percent.”
— With assistance from Thomas Black
