Biden Unveils $2.3 Trillion Infrastructure Plan
By: Andrew Restuccia and Tarini Parti (WSJ)
S E E D E D C O N T E N T
WASHINGTON—President Biden unveiled a $2.3 trillion infrastructure plan centered on fixing roads and bridges, expanding broadband internet access and boosting funding for research and development, plus higher corporate taxes to pay for the package.
"It's not a plan that tinkers around the edges," Mr. Biden said during a speech in Pittsburgh, where he kicked off his presidential campaign. "It's a once-in-a-generation investment in America."
The Democratic president cast his plan as a fundamental shift in economic thought away from the small-government, tax-cutting approach embraced decades ago under Ronald Reagan, a Republican.
"Here's the truth: We all will do better when we all do well," Mr. Biden said, arguing that the pandemic had exposed longstanding inequalities in the country. "It's time to build our economy from the bottom up and from the middle up, not the top down."
He said his plan isn't an attack on wealthy Americans. "This is not to target those who've made it, not to seek retribution," he said. "This is about opening opportunities for everybody else."
The president’s advisers say the Covid-19 pandemic has helped change American attitudes about the role government should play in their lives, making political space for unprecedented investments that could reshape the country.
The measure, which comes after Mr. Biden signed a $1.9 trillion coronavirus relief bill into law, is the first of a two-part economic plan that he hopes to move through Congress in coming months. A second plan focused on child care, healthcare and education will be released in April. Combined, Mr. Biden’s economic proposals are expected to cost between $3 trillion and $4 trillion over a decade, according to people involved in the discussions.
Mr. Biden’s infrastructure proposal faces hurdles, including GOP opposition to significant tax increases, disagreements among Democrats about how to pay for the package and progressives’ concerns that it isn’t ambitious enough.
The infrastructure plan would cost roughly $2.3 trillion over eight years and be paid for over 15 years by raising the corporate tax rate to 28% from 21% and increasing taxes on companies’ foreign earnings. The tax changes would revamp or replace much of the international tax structure congressional Republicans established four years ago in the law signed by then-President Donald Trump .
Mr. Biden’s proposal includes $621 billion to modernize transportation infrastructure, $400 billion to help care for the aging and those with disabilities, $300 billion to boost the manufacturing industry, $213 billion on retrofitting and building affordable housing and $100 billion to expand broadband access , among other investments.
The plan, which requires congressional approval, calls for modernizing 20,000 miles of roadway; building 500,000 electric-vehicle charging stations ; replacing the country’s existing lead pipes and service lines; repairing aging schools; expanding home care for the elderly and disabled; and investing billions of dollars in domestic semiconductor manufacturing . Mr. Biden also proposes mandating that more of the country’s electricity be generated from low-carbon sources, with a goal of eliminating carbon emissions from the power grid by 2035.
Mr. Biden’s plan stresses equity in access to jobs and transportation options, including $20 billion for a new program that would reconnect neighborhoods cut off by past transportation investments as well as research funding for historically Black colleges and universities. The plan calls for a national climate-focused laboratory to be affiliated with an HBCU.
The plan’s rollout will kick off months of negotiations between the White House and Capitol Hill, as well as a wave of lobbying by business and industry groups. White House officials acknowledged that the shape of the package could change as lawmakers—eager to put their stamp on it and score victories for constituents—offer up their own proposals. Mr. Biden’s advisers hope Congress will pass it this summer.
“I’m open to other ideas, so long as they don’t impose any tax increase on people making less than $400,000,” the president said.
Republicans and Democrats have struggled in recent years to pass major infrastructure legislation, disagreeing over how much to spend and how to finance it. Republicans are especially unlikely to agree to reverse the 2017 tax law that they supported enthusiastically.
Given likely GOP opposition, some Biden advisers and congressional Democrats are considering a budgetary maneuver to advance the measure without Republican support—as they did with the Covid-19 aid package—which would require almost every Democrat to stick together.
Keeping the party united could prove complicated as both moderate and progressive lawmakers jockey to see their favored issues addressed in the bill.
Reps. Tom Suozzi (D., N.Y.), Bill Pascrell (D., N.J.) and Josh Gottheimer (D., N.J.) said this week that they wouldn’t back any tax-code changes unless Congress restores the deduction for state and local taxes, which is now capped at $10,000 under the 2017 tax law. Democrats control the House 219-211, so they can lose no more than three votes on legislation that all Republicans oppose.
Progressives said the infrastructure proposal doesn’t meet the scale of the challenges facing the country, including climate change. Congressional Progressive Caucus Chairwoman Rep. Pramila Jayapal (D., Wash.) said on Wednesday that the package “can and should be substantially larger in size and scope.”
She noted that Mr. Biden had campaigned on spending $2 trillion over four years on climate and infrastructure-related projects, half the time frame outlined in his new plan. It “makes little sense to narrow his previous ambition on infrastructure or compromise with the physical realities of climate change,” Ms. Jayapal said.
Even Democrats who broadly agree with the Biden administration’s goals indicated they would seek modifications. Sen. Ron Wyden (D., Ore.), who leads the Senate Finance Committee, said Wednesday that he was preparing his own proposal to overhaul international tax rules.
A senior administration official said the type of spending outlined in the package has garnered bipartisan interest previously, adding that the president was open to ideas on structuring and financing the plan. Mr. Biden will hold his first cabinet meeting on Thursday, the White House said, where he is expected to discuss the infrastructure plan with his senior aides.
Senate Minority Leader Mitch McConnell (R., Ky.) said Mr. Biden called him Tuesday to discuss the plan, which Mr. McConnell said appeared to be only nominally about infrastructure. Mr. Biden said in Pittsburgh that he would invite Republicans to the Oval Office to talk about the proposal.
“If it’s a Trojan horse for a massive tax increase, put me down as highly skeptical,” Mr. McConnell said Wednesday at an event in Kentucky, adding that the proposal appeared to involve “not only significantly more borrowing, but raising taxes on the most productive parts of our economy. This is not a very bipartisan period we’re in right now.”
Sen. Kevin Cramer (R., N.D.) said he was open to working with Democrats on certain measures like expanding the Highway Trust Fund or easing regulations to lower the cost of transportation projects, but added that he thought Mr. Biden’s proposal went beyond just infrastructure.
“I worry that by using one of the most bipartisan policies in Congress as a tool for much more partisan goals like climate and taxes, President Biden will squander whatever remaining goodwill he has with Republicans,” Mr. Cramer said.
It is unknown how much of Mr. Biden’s coming healthcare and education package would be paid for through tax increases, but White House officials are weighing additional proposals.
The first package contains corporate tax proposals and none of Mr. Biden’s main campaign proposals to raise taxes on top earners’ individual income, capital gains, estates and noncorporate businesses.
Under the president’s plan, the corporate tax rate would rise to 28% from 21%, putting it halfway between the previous 35% tax rate and where Republicans set it in 2017. It would push the U.S. corporate tax rate back toward the top of the pack among major economies, a change that business groups are already warning would discourage investment.
“Policy makers should avoid creating new barriers to job creation and economic growth, particularly during the recovery,” Joshua Bolten, president and chief executive officer of the Business Roundtable, said Tuesday.
Democrats contend that the 2017 tax law cut taxes too deeply and contains several features that encourage companies to put profits and operations abroad. The Biden plan would reverse several of those.
Notably, the plan would set the minimum tax on U.S. companies’ foreign income at 21%, up from 10.5% today, and it would set that tax so it applies to profits earned in each country, rather than letting companies combine their income globally. Administration officials said that would limit companies’ ability to book profits in tax havens, while businesses warn of complexities and unforeseen consequences.
White House aides said the proposal is paid for, but not in the way that Congress typically measures such things. It would take 15 years of the corporate tax increases to cover the one-time infrastructure expenses over eight years, though the tax increases would remain after that point.
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Do Corporations really pay taxes? Taxes are nothing other than a business expense like the heat, light, rent, etc. It’s all calculated into the price of a product. So who pays? Oh ya, the consumer. (the middle class)
And how do democrats plan to pass this monstrosity? Another bite of the apple on reconciliation? I recall the Republicans were only allowed to do that once in a year. How does that change?
As opposed to simply increasing taxes of the average citizen? Either way, it's going to cost us.
Not if the Senate Parliamentarian declares that the democrats already reached their reconciliation limit for 2021.
That's for them to decide. But how else do we expect infrastructure to be repaired or improved?
Easy. Sell bridges and roads to the highest bidder who then forces you to pay to use the infrastructure.The Libertarian Dream
Now...whether the roads and bridges actually get built or repaired is another thing
Seems to me that corps were doing just fine before the wonderful (stupid) idea to lower their taxes.
By the way, not all corps actually sell a product.
In other words, you want money going into the economy, but you rather the government decides where, not the people who earned it. Didn't we see this movie before under Obama? What happened to those "shovel ready" jobs?
In other words, the tax break was a stupid idea and was unnecessary.
they took over the republican party and we ended up with the trump fiasco.
Where are all the manufacturing jobs that were supposed to be brought back to the US in 2017?
The same place that the Trump health plan and the infrastructure plan that they bragged about for four years are at, in their minds.
It's Biden's proposal right?
Not in 2017. We were promised that manufacturing jobs were coming back to the US. Where are they? You can't answer that honestly so you you ignore it.
I'm not interested in going down that path. This is about Biden's monster "infrastructure bill. Can you defend it?
smh... Again the Republican Governors didn't want strings attached to the money and many of them put it in the General Fund to balance state debt, like then Rep MN Gov Tim Pawlenty.
LOL but you will bring up Obama. Where are the manufacturing jobs that were promised?
I brought him up in context. Obama advanced a similar bill. Trump never advanced such a bill. If you can't defend Biden's bill or Obama's then you should admit as much.
The Keynes you admired in your other seed would have approved of this plan. So, a question ... is there another plan or do you wait until the foundation crumbles and the roof caves in?
You are right. In times of economic upheaval he would want all the government spending and only in such times. He would have been shocked to know that democrats want to use such policies all the time. Haven't we been doing it for the last 13 years?
I am pretty ignorant on economic issues in DC, but it seems to me, and I could be wrong but the bottom line in paying for this massive plan Biden came up with is jacking the tax rate up significantly to pay for this onto the American taxpayer?
The tax payer already pays for everything. Not something new.
The way I look at it, if we want new roads and bridges, we, gasp, end up paying for it.
He claims that this will be paid by a hike in the Corporate tax rate - up to 28% and per his campaign pledge taxing individuals/couples making over $400,000 per year.
Another $2.3 Trillion bill to be covered with that?
One thing I will kinda agree with some on the right with.
Eventually they are going to have to stop spending money.
Though I do think our infrastructure needs to be brought up to date.
Not at all:
President Obama was sworn into office on January 20, 2009. Let’s look at Congress for the 8 years that President Obama was in office:
From January 3, 2009 to January 3, 2011, Democrats controlled both the Senate and the House.
From January 3, 2011 to January 3, 2013, Democrats controlled the Senate and Republicans controlled the House.
From January 3, 2013 to January 3, 2015, Democrats controlled the Senate and Republicans controlled the House.
From January 3, 2015 to January 3, 2017, Republicans controlled both the Senate and the House.
When Donnie had both houses he promised infrastructure once a month but never delivered ... par for the course when it came to him.
Remember those days?
Eventually they are going to have to stop spending money.
At what point would you draw the line?
Though I do think our infrastructure needs to be brought up to date.
Mayor Pete will be in charge. I predict bicycle lanes like we have in Harvard Sq., Cambridge. Wouldn't that be something?
Not likely. Cutting unnecessary spending will also help.
They all spent like drunken sailors.
I remember the days before Obama when some republicans seemed sane.
Lines have been set and crossed. They don't care. What I think will happen eventually is that they are going to ruin the dollar around the globe. Will not be a US dollar standard.
Nothing wrong with bike lanes. We have them here in my republican enclave...
You should be happy about that, he's both wise and ambitious.
Ocasio-Cortez eyeing $10 trillion over 10 years for infrastructure http:// hill.cm/QrmHOFT
Donnie, Donnie....some just can't give it up. What about the article Tess?
Great plan, hope that it is approved.
Hell, we spend a couple of trillion in two plus years on defense. But rebuilding/improving our infrastructure is a problem?
"Schumer has asked the Senate parliamentarian, the upper chamber’s official adviser on procedural matters, for her OK to essentially recycle the same reconciliation process used to pass Biden’s pandemic aid package earlier this month. But his request, if granted, would further stretch a legislative tool that wasn’t designed for the sorts of policy goals that both parties have used it to pursue."
The one thing that made me look twice was the research and development.
Everything else I agree with.
I am guessing it still does nothing for the electric grid.
Rebuilding infrastructure isn't a problem. But infrastructure is a teeny, tiny part of the proposal. Infrastructure is only a condiment on a shit burger.
Both Democrats and Republicans put together these humongous omnibus spending bills that are little more than earmarks with a smattering of needed spending sprinkled on top.
There isn't any valid reason why all these spending proposals can't be introduced as separate legislation. Both parties smash as much crap together as possible to make the legislation too-big-to-fail. The public ends up rehashing the same stupid arguments that have been made over the last forty years.
And nothing will change.
I am up for improving our infrastructure, but I have zero faith that this funding will be spent wisely. Thus I am categorically against these absurdly massive spending bills which mostly empower federal politicians at the expense of taxpayers (and future taxpayers).
Any plan like this should be tiered with the most important / most likely to succeed actions taken first. Each tier should be further divided into phases and each phase should be evaluated upon completion to determine course changes for the tier and upwards for the strategy. Step-by-step with clear, measurable objectives, quantitative analysis of same and recalibration along the way. I have no expectation that anything like this will take place. Instead, I expect money to be thrown at politically beneficial items and money to be diverted into the pockets of those connected with the federal and state governments.
That said, I very much hope to be proven wrong this time. That is, I would applaud a well-managed major initiative where the funding actually went towards needed infrastructure improvements at competitive rates. I would applaud a properly managed execution of this strategy.
You know they're going to take the easy route. Easier to throw money at something than to sit down and look over what needs to be and develop a plan for it.
I do wish they would stop all the earmarks that go into a spending bill.
Yeah, I know. It is near certainty that these politicians are simply doing what they always do. After all, why would we expect them to do something other than what is in their own best interests? The public never holds them accountable.
The awesome result of Congress having a 12% or whatever approval rating and something like a 90% reflection rate. Thanks gerrymandering, and first past the post elections!
Hard to swallow that anyone actually believes differently. I know there is ongoing federal support, but the infrastructure is largely state and locally owned. Drive around my state, and you can see what you are talking about in action. Some towns have done a good job of maintaining infrastructure, others...not so much...but they have a damn nice and brand new municipal building, state of the art athletic facilities, (but the school house is crumbling). Frankly, I'm opposed to a state increase in taxes to rebuild neglected infrastructure in such places. Obviously, some communities don't have the ability to increase tax revenue, and may need some support, but many are not in that position, and are simply wasteful. I worked in the public works department for a brief stint, several years ago. Answered to the director. I was hired right around the time the departments were preparing their various budgets, and I caused some waves because of the way the budgeting process worked there, and most everywhere else. You have to spend the money in order to budget it for the next year. The result? Each department ends up basically dumping money to justify the next years budget request. It would make more sense to simply save what was not spent, and allocate the same amount the following year. Nope. Spend it all, then when an immediate need arises, create a half cent sales tax increase to raise money that could have been saved up in a matter of years. Cycle never ends, taxes continue to climb, and the infrastructure is really never addressed. That goes on all around the county. I'm opposed to state taxes being used to continue the charade, and I'm damn sure opposed to federal dollars being used for that purpose.
Agreed. What you described is the most common budgeting dynamics in the private sector too. It is as if nobody ever thinks about the processes in place. The machine keeps operating, people keep doing the easy, short-term and personally beneficial actions and we cycle with the same resultant problems.
I'd say you are correct.
Oh, just wonderful. Now we have to rehash the same idiotic arguments that have been made over the last forty years. And nothing will change.
As if the pandemic wasn't enough.
Here's a different argument:
And here it comes. Gonna need taller boots.
Why is any of this surprising? Why are Republicans aghast at Democrats packing omnibus spending bills with poison pills, pork barrel projects, and the lunacy of political ideology? Republicans play the same game, the same way. Of course Democrats are going to turn any good idea into a piece of shit. They're in Congress. Republicans did the same thing with Right to Work; turned a good idea into a piece of shit.
Look Congress reformed itself. The reason these omnibus spending bills include so much crap is because Congress prohibited earmarks. And these omnibus pieces of legislation are too-big-to-fail. Congress took credit for 'draining the swamp' by making everything worse.
I’ve read a little bit about the tax increases, and I am perfectly fine with them. They will impact very few people (and those it effects will be just fine) and I doubt that even if corporate taxes go up you will see any measurable increase in prices at the store.
This is long overdue and the economic benefits of all those projects will far outweigh any minor price increases (that likely won’t materialize) on goods at the store.
How about inflation? All this printing of money has to lead there, does it not?