President Joe Biden unveiled more than $ 2 trillion in infrastructure on Wednesday as his administration shifts its focus to strengthening the post-pandemic economy.
The plan, which Biden outlined Wednesday, calls for around $ 2 trillion in spending over eight years and would raise the corporate tax rate to 28% to fund it. At a union hall in Pittsburgh, the president called it a vision of creating “the strongest, resilient, and innovative economy in the world” – and millions of “well-paying jobs” along the way.
The White House said the tax hike, combined with measures to prevent profit shifting, would fund the infrastructure plan within 15 years.
The suggestion would be:
- Invest $ 621 billion in transportation infrastructures such as bridges, roads, public transportation, ports, airports and the development of electric vehicles
- Directly $ 400 billion to care for elderly and disabled Americans
- Spend more than $ 300 billion on improving drinking water infrastructure, expanding broadband access and modernizing power grids
- Spend more than $ 300 billion building and retrofitting affordable housing, and building and upgrading schools
- Invest $ 580 billion in American manufacturing, research and development, and training efforts
United States President Joe Biden speaks about his $ 2 trillion infrastructure plan during an event at Carpenters Pittsburgh Training Center in Pittsburgh, Pennsylvania on March 31, 2021.
Jonathan Ernst | Reuters
The announcement kicks off Biden’s second major initiative after passing a $ 1.9 trillion coronavirus relief plan earlier this month. With the new move, the government aims to approve an initial proposal to create jobs, upgrade U.S. infrastructure, and combat climate change before adopting a second plan to improve education and expand paid vacation and health insurance.
Biden said he would reveal the second part of his recovery package “in a couple of weeks”.
“These are investments that we need to make,” said Biden of the overhaul of the US infrastructure. “We can afford to make them. In other words, we can’t afford not to make them.”
While the Democrats closely control both houses of Congress, the party faces challenges as it passes the infrastructure plan. The GOP largely supports efforts to rebuild roads, bridges and airports and to expand broadband access. The Republicans, however, oppose tax increases as part of the process.
Senate Minority Chairman Mitch McConnell, R-Ky., Said Wednesday that he “probably won’t” endorse the proposal because of the tax hikes. Biden called McConnell Tuesday to inform him of the plan.
McConnell’s Democratic counterpart, New York Majority Leader Chuck Schumer, extolled the bill as a means of creating jobs while promoting clean energy and transportation. In a statement on Wednesday, he said, “I look forward to working with President Biden to adopt a great, bold plan that will propel America forward for decades to come.”
Read more about CNBC’s political coverage:
Responding to criticism of proposed tax increases, the president said he would not increase the burden on anyone making less than $ 400,000 a year. He said he had no intention of punishing the rich.
“This is not intended to target those who made it. Not seeking retaliation,” he said. “This is about opening up opportunities for everyone else.”
The administration’s goals include renovating 20,000 miles of roads and highways and repairing 10,000 bridges. The proposal envisages building a national network of 500,000 chargers for electric vehicles by 2030 and replacing 50,000 diesel vehicles in local public transport.
The government hopes to build or renovate 500,000 homes for low- and middle-income Americans and replace all lead pipes in drinking water systems. The plan also aims to provide universal, affordable broadband service.
The White House wants to ensure the public transportation revitalization reaches color communities that have been harmed by previous projects such as highways built through neighborhoods. The administration also aims to focus efforts to increase the resilience of homes, schools, transportation and utilities in marginalized communities, which are more likely to bear the brunt of severe weather events.
Biden plans to fund the expenses by increasing the corporate tax rate to 28%. Republicans cut the tax under their 2017 tax bill from 35% to 21%.
The administration also wants to increase the global minimum tax for multinational companies and ensure that they pay at least 21% tax in each country. The White House wants to discourage companies from listing tax havens as an address and, among other things, writing off the costs associated with offshoring.
Biden hopes the package will create manufacturing jobs and save flawed American infrastructure as the country tries to get out of the shadow of Covid-19. He and the Congress Democrats also plan to tackle climate change and begin a transition to cleaner energy sources.
The president announced his plans in Pittsburgh, a city where the organized labor force is strong and the economy has transitioned from traditional manufacturing and mining to healthcare and technology. Biden, who has pledged to create union jobs as part of the infrastructure plan, launched his 2019 presidential campaign in a union hall in Pittsburgh.
Biden said he hoped to win Republican support for an infrastructure bill. If Democrats can’t get 10 GOP Senators on board, they’ll have to try to get the bill passed through a budget vote, which wouldn’t force Republicans to back the plan in a chamber 50-50 split by party.
Biden said he would hear GOP ideas on infrastructure.
“We will negotiate in good faith with any Republican who wants to help,” said Biden on Wednesday. “But we have to do it.”
United States President Joe Biden speaks about his $ 2 trillion infrastructure plan during an event at Carpenters Pittsburgh Training Center in Pittsburgh, Pennsylvania on March 31, 2021.
Jonathan Ernst | Reuters
Democrats also need to consider combining the physical infrastructure plans with other recovery efforts, including universal pre-K and extended paid vacation days. Republicans would likely stop supporting spending to bolster the social safety net, especially if Democrats try to raise taxes on the rich to fund programs.
Schumer also anticipated a possible sticking point within his party on Wednesday.
He said he wanted the infrastructure plan to lift the cap on state and local tax deductions – a change that would disproportionately help higher-income people in high-tax countries like New Jersey, Connecticut, and Schumer’s home state of New York.
Democrats want to pass the package this summer. House spokeswoman Nancy Pelosi told the Democratic caucus in the chamber that she would like it passed by July 4th, according to a source familiar with the matter. The source, who refused to be named because the comment was made private, added that it was not intended as a deadline.
Speaking to reporters on Tuesday night, an administrative official did not say whether Biden would attempt to pass the plan with the support of both parties.
“We will begin, and will have already begun, to fully reach our colleagues in Congress,” said the official.
When asked how the bill could be passed, White House press secretary Jen Psaki said Biden would “hand over the mechanism of the bill to Leader Schumer and other congressional leaders.”
As of now, Democrats will have two more shots on the budget vote before halfway through 2022. According to NBC News, Schumer hopes to convince the House MP to allow the Democrats to use the process at least one more time beyond these two options.
The party passed its $ 1.9 trillion coronavirus aid package without a Republican vote.
– CNBC’s Kevin Breuninger and Ylan Mui contributed to this report
Subscribe to CNBC on YouTube.
