Plan for building projects unveiled
Biden: It will win future for nation
PITTSBURGH — President Joe Biden outlined a $2.3 trillion plan Wednesday to reengineer the nation’s infrastructure in what he billed as “a once in a generation investment in America” that would undo his predecessor’s signature legislative achievement of giant tax cuts for corporations in the process.
Speaking at a carpenters union training center in Pittsburgh, Biden drew comparisons between his proposed transformation of the U.S. economy and the space race — and promised results as grand in scale as the New Deal or Great Society programs that shaped the 20th century.
“It’s not a plan that tinkers around the edges,” Biden said. “It’s a once-in-a-generation investment in America unlike anything we’ve seen or done since we built the interstate highway system and the space race decades ago. In fact, it’s the largest American jobs investment since World War II. It will create millions of jobs, good-paying jobs.”
White House officials say the spending would generate those jobs as the country shifts away from fossil fuels and combats climate change. It is also an effort to compete with the technology and public investments made by China, which has the world’s second-largest economy and is fast gaining on the United States’ dominant position.
“I’m convinced that if we act now, in 50 years people are going to look back and say this is the moment when America won the fu
ture,” Biden said.
The Democratic president’s infrastructure projects would be financed by higher corporate taxes — a trade-off that could lead to fierce resistance from the business community and thwart attempts to work with Republican lawmakers. Biden hopes to pass an infrastructure plan by summer, which could mean relying solely on the slim Democratic majorities in the House and the Senate.
The higher corporate taxes would aim to raise the necessary funds over 15 years and then reduce the deficit going forward. In doing so, Biden would undo the action by former President Donald Trump and congressional Republicans to lift the corporate tax rate to 28% from the 21% rate set in a 2017 overhaul.
“Ninety-one Fortune 500 Companies, including Amazon, pay not a single solitary penny in income tax,” Biden said.
To keep companies from shifting profits overseas to avoid taxation, a 21% global minimum tax would be imposed. The tax code also would be updated so that companies could not merge with a foreign business and avoid taxes by moving their headquarters to a tax haven. And among other provisions, it would increase IRS audits of corporations.
Wednesday’s announcement will be followed in coming weeks by Biden pushing a companion bill of roughly equal size for investments in child care, family tax credits and other domestic programs. That nearly $2 trillion package would be paid for by tax increases on wealthy individuals and families.
“Wall Street didn’t build this country,” Biden said. “You, the great middle class, built this country. And unions built the middle class.”
The White House says the largest chunk of the proposal includes $621 billion for roads, bridges, public transit, electric-vehicle charging stations and other transportation infrastructure. The spending would push the country away from internal combustion engines that the auto industry views as an increasingly antiquated technology.
It calls for $85 billion for transit — doubling existing federal spending — and another $80 billion for rail. The money would expand access to bus service and Amtrak, connecting more cities with the aim of reducing road congestion and driving down greenhouse gas emissions.
At the same time, Biden is proposing spending $115 billion to repair about 20,000 miles of roads and 10,000 bridges and to take additional measures to limit greenhouse gas emissions and cut congestion.
The plan appears to call for adding the money on top of existing federal spending on roads and transit, which at current levels would be about another $300 billion over five years.
Speaking on Tuesday in Virginia, Transportation Secretary Pete Buttigieg said the nation had a unique opportunity. Communities across the nation stand to benefit, he said, “if we seize the moment that’s upon us, a once-in-acentury alignment of demonstrated need, bipartisan interest, public impatience, and, I can tell you, a very supportive president leading the way.”
An additional $111 billion would go to replace lead water pipes and upgrade sewers. Broadband internet would blanket the country for $100 billion. Separately, $100 billion would upgrade the power grid to deliver clean electricity. Homes would get retrofitted, schools modernized, workers trained and hospitals renovated under the plan, which also seeks to strengthen U.S. manufacturing.
Biden appealed for Republicans and the business community to join him in negotiations on the bill, but the legislative prospects for Biden’s twin proposals already appear to hinge on Democrats coming up with the votes on their own through the budget reconciliation process, which requires just a simple majority in the 50-50 Senate.
“I’m going to bring Republicans into the Oval Office, listen to them, what they have to say and be open to other ideas,” Biden said. “We’ll have a good faith negotiation. Any Republican who wants to help get this done. But we have to get it done.”
GOP: THUMBS DOWN
Several key Republicans and business leaders were already panning the package.
The president phoned Senate Minority Leader Mitch McConnell, R-Ky., on Tuesday to brief him on the details of the infrastructure plan. McConnell, who mentioned the call during an event Wednesday in Kentucky, signaled he’s still not a fan of the proposal.
“It’s like a Trojan horse,” McConnell told reporters, stressing that the Democrats’ new blueprint to upgrade roads, bridges, waterways and sewer systems relies on “more borrowing and massive tax increases on all the productive parts of our economy.”
“If it’s going to have massive tax increases and trillions more added to the national debt, it’s not likely,” he said.
“It seems like President Biden has an insatiable appetite to spend more money and raise people’s taxes,” Rep. Steve Scalise of Louisiana, the GOP whip, said in an interview.
The business community favors updating U.S. infrastructure but dislikes higher tax rates. Neil Bradley, the U.S. Chamber of Commerce’s executive vice president and chief policy officer, said in a statement that “we applaud the Biden administration for making infrastructure a top priority. However, we believe the proposal is dangerously misguided when it comes to how to pay for infrastructure.” The Business Roundtable, a group of CEOs, would rather have infrastructure funded with user fees such as tolls.
Trump, in a statement, blasted his successor’s proposal, claiming it “would be among the largest self-inflicted economic wounds in history.”
DEMOCRAT ENTHUSIASM
Democratic leaders embraced Biden’s plan on Wednesday. Senate Majority Leader Charles Schumer, D-N.Y., said it would create millions of jobs.
“I look forward to working with President Biden to pass a big, bold plan that will drive America forward for decades to come,” Schumer said at an event in Buffalo.
House Speaker Nancy Pelosi, D-Calif., has signaled to Democrats that she hopes to pass the package through the House by July 4, though that timeline could easily slip as Democrats race to write the legislation and agree on details.
Some liberal lawmakers have said the overall plan does not go far enough, noting that Biden called for $2 trillion in investments over four years during his 2020 campaign. “This is not nearly enough,” Rep. Alexandria Ocasio-Cortez, D-N.Y., said on Twitter about the Biden plan.
Some centrist Democrats are balking at another large spending package.
Biden’s efforts may also be complicated by demands from a handful of Democratic lawmakers who say they cannot support the bill unless it addresses the $10,000 cap on individuals’ state and local tax deductions put in place under Trump and a Republican-led Congress.
With a narrow majority in the House, they could conceivably quash any bill that doesn’t significantly lift the cap or repeal it entirely.
“I can only vote for a bill that has meaningful tax impact for my constituents if it addresses the SALT cap,” tweeted Rep. Tom Malinowski, D-N.J., using an acronym for the state and local tax cap.
“We say No SALT, no deal,” said Democratic Reps. Tom Suozzi of New York and Bill Pascrell and Josh Gottheimer of New Jersey in a joint statement.
HOW MUCH GROWTH?
The new construction could keep the economy running hot, coming on the heels of Biden’s $1.9 trillion coronavirus relief package. Economists already estimate it could push growth above 6% this year.
Infrastructure spending usually holds the promise of juicing economic growth, but by how much remains a subject of political debate. Commutes and shipping times could be shortened, while public health would be improved and construction jobs would bolster consumer spending.
Standard & Poor’s chief U.S. economist, Beth Ann Bovino, estimated last year that a $2.1 trillion boost in infrastructure spending could add as much as $5.7 trillion in income to the entire economy over a decade. Those kinds of analyses have led liberals in Congress such as Rep. Pramila Jayapal, D-Wash., to conclude Tuesday, “The economic consensus is that infrastructure pays for itself over time.”
But the Biden administration is taking a more cautious approach than some Democrats might like. After $1.9 trillion in pandemic aid and $4 trillion in relief last year, the administration is trying to avoid raising the national debt to levels that would trigger higher interest rates and make it harder to repay.
Information for this article was contributed by Jonathan Lemire, Kevin Freking, Zeke Miller, Lisa Mascaro, Josh Boak and Padmananda Rama of The Associated Press; by Jeff Stein, Juliet Eilperin, Michael Laris, Tony Romm, Cleve R. Wootson Jr. and Ian Duncan of The Washington Post; and by Jim Tankersley of The New York Times.