The plan Biden outlined Wednesday includes roughly $2 trillion in spending over eight years and would raise the corporate tax rate to 28% to fund it. Speaking at a union hall in Pittsburgh, the president called it a vision to create “the strongest, most resilient, innovative economy in the world” — and millions of “good-paying jobs” along the way.
The White House said the tax hike, combined with measures designed to stop offshoring of profits, would fund the infrastructure plan within 15 years.
The proposal would:
- Put $621 billion into transportation infrastructure such as bridges, roads, public transit, ports, airports and electric vehicle development
- Direct $400 billion to care for elderly and disabled Americans
- Inject more than $300 billion into improving drinking-water infrastructure, expanding broadband access and upgrading electric grids
- Put more than $300 billion into building and retrofitting affordable housing, along with constructing and upgrading schools
- Invest $580 billion in American manufacturing, research and development and job training efforts
- The announcement kicks off Biden’s second major initiative after passage of a $1.9 trillion coronavirus relief plan earlier this month. In the new move, the administration aims to approve a first proposal designed to create jobs, revamp U.S. infrastructure and fight climate change before it turns toward a second plan to improve education and expand paid leave and health-care coverage.
Biden said he will unveil the second part of his recovery package “in a few weeks.”
“These are investments we have to make,” Biden said of revamping U.S. infrastructure. “We can afford to make them. To put it another way — we can’t afford not to.”
While Democrats narrowly control both chambers of Congress, the party faces challenges in passing the infrastructure plan. The GOP broadly supports efforts to rebuild roads, bridges and airports and expand broadband access, but Republicans oppose tax hikes as part of the process.
Senate Minority Leader Mitch McConnell, R-Ky., said Wednesday he is “not likely” to support the proposal because of the tax increases. Biden called McConnell on Tuesday to brief him on the plan.
McConnell’s Democratic counterpart, Majority Leader Chuck Schumer of New York, touted the bill as a means to create jobs while promoting clean energy and transportation. In a statement Wednesday, he said, “I look forward to working with President Biden to pass a big, bold plan that will drive America forward for decades to come.”
The president responded to criticism of proposed tax hikes, saying he would not increase the burden on anyone making less than $400,000 per year. He said he did not aim to punish the wealthy.
“This is not to target those who’ve made it. Not to seek retribution,” he said. “This is about opening opportunities for everybody else.”
Among the administration’s goals, it aims to revamp 20,000 miles of roads and highways and repair 10,000 bridges. The proposal calls to build a national network of 500,000 electric vehicle chargers by 2030 and replace 50,000 diesel public transit vehicles.
The administration hopes to build or rehabilitate 500,000 homes for low- and middle-income Americans and replace all lead pipes in drinking-water systems. The plan also aims to deliver universal, affordable broadband service.
The White House wants to ensure public transportation revitalization reaches communities of color harmed by past projects, such as highways built through neighborhoods. The administration also aims to focus efforts to make homes, schools, transportation and utility grids more resilient in marginalized communities more likely to bear the brunt of severe weather events.
Biden plans to fund the spending by raising the corporate tax rate to 28%. Republicans slashed the levy to 21% from 35% as part of their 2017 tax law.
The administration also wants to boost the global minimum tax for multinational corporations and ensure they pay at least 21% in taxes in any country. The White House aims to discourage firms from listing tax havens as their address and writing off expenses related to offshoring, among other reforms.
Biden hopes the package will create manufacturing jobs and rescue failing American infrastructure as the country tries to emerge from the shadow of Covid-19. He and congressional Democrats also plan to combat climate change and start a transition to cleaner energy sources.
The president announced his plans in Pittsburgh, a city where organized labor has a strong presence and the economy has undergone a shift from traditional manufacturing and mining to health care and technology. Biden, who has pledged to create union jobs as part of the infrastructure plan, launched his presidential campaign at a Pittsburgh union hall in 2019.
Biden has said he hopes to win Republican support for an infrastructure bill. If Democrats cannot get 10 GOP senators on board, they will have to try to pass the bill through budget reconciliation, which would not require any Republicans to back the plan in a chamber split 50-50 by party.
Biden said he would hear out GOP ideas on infrastructure.
“We’ll have a good-faith negotiation with any Republican who wants to help get this done,” Biden said Wednesday. “But we have to get it done.”
Democrats will also have to consider whether to package the physical infrastructure plans with other recovery policies including universal pre-K and expanded paid leave. Republicans likely would not back more spending to boost the social safety net, especially if Democrats move to hike taxes on the wealthy to fund programs.
Schumer on Wednesday also previewed a potential sticking point within his party.
He said he wanted the infrastructure plan to include a repeal of the cap on state and local tax deductions — a change which would disproportionately help higher-income people in high-tax states including New Jersey, Connecticut and Schumer’s home state, New York.
Democrats are looking to pass the package this summer. House Speaker Nancy Pelosi told the Democratic caucus in the chamber that she would like to have it passed by July 4, according to a source familiar with the matter. The source, who declined to be named because the remark was made in private, added that it was not intended as a deadline.
Speaking to reporters on Tuesday night, an administration official did not say whether Biden would seek to pass the plan with bipartisan support.
“We will begin and will already have begun to do extensive outreach to our counterparts in Congress,” the official said.
Asked Monday about how the bill could pass, White House press secretary Jen Psaki said Biden would “leave the mechanics of bill passing to Leader Schumer and other leaders in Congress.”
As of now, Democrats will have two more shots at budget reconciliation before the 2022 midterms. Schumer hopes to persuade the chamber’s parliamentarian to allow Democrats to use the process at least once more beyond those two opportunities, according to NBC News.
The party passed its $1.9 trillion coronavirus relief package without a Republican vote.
SOURCE : https://www.cnbc.com/2021/03/31/biden-infrastructure-plan-includes-corporate-tax-hike-transportation-spending.html