Biden unveils $2.3T plan to rebuild infrastructure
Ambitious proposal would be funded by corporate tax hike
PITTSKURhi >> President Joe Biden outlined a huge $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 hard-hatted 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 the perils of 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 future,” Biden said.
It’s not yet clear what the infrastructure package might mean for California and the Bay Area — Biden administration officials on Wednesday did not detail specific projects that would receive funding.
But there are plenty of local candidates. Money could flow to a seismic retrofit of the Golden Gate Bridge, the extension of BART service through downtown San Jose and work to electrify the Caltrain system and extend the end of the line to downtown San Francisco, to name a few, Metropolitan Transportation Commission spokesman Randy Rentschler said.
One of the biggest questions is how much the package would give California’s bullet train out of the $80 billion it dedicates to rail infrastructure. That project does not yet have funding in place for several of its most important and complex pieces, including the $13 billion segment connecting San Jose with the Central Valley.
A spokeswoman for the California High Speed Rail Authority said officials were hoping to learn more about the infrastructure proposal “in the weeks to come.”
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 piles of money over 15 years and then reduce the deficit going forward. In doing so, Biden would undo the action by President Donald Trump and congressional Republicans to lift the corporate tax rate to 28% from the 21% rate set in a 2017 overhaul.
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 hikes 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.”
Biden’s choice of Pittsburgh for unveiling the plan carried important economic and political resonance. He not only won Pittsburgh and its surrounding county to help secure the presidency, but he launched his campaign there in 2019. The city famed for steel mills that powered America’s industrial rise has steadily pivoted toward technology and health care, drawing in college graduates in a sign of how economies can change.
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.
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.
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.
To keep companies from shifting profits overseas to avoid taxation, a 21% global minimum tax would be imposed. The tax code would also 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.