Biden proposes big $2.25 trillion infrastructure proposal amid corporate opposition

Candidate Joe Biden promised a “big and bold” infrastructure proposal to shore up decaying U.S. infrastructure.

Now President Joe Biden is out with details of that bold plan dubbed the “American Jobs Plan” that would spend at least $2.25 trillion on a wide variety of infrastructure needs, physical and virtual. The plan will likely have to be moved under “reconciliation procedures”—meaning a simple majority—to pass a reluctant Senate.

The Biden administration is trying to take advantage of a small window in Washington in which Democrats control the White House and both houses of Congress as his administration shifts to bolstering the post-pandemic economy.

And it appears the president is open to all ideas on how to pay for it.

“We’ll have good faith negotiations (with Republicans) to get it done,” the president said. “But we have to get it done.”

Details of the proposal were laid out March 31. The plan aims to revitalize U.S. transportation infrastructure, water systems, broadband and manufacturing, among other goals.

“It’s big, yes; it’s bold, yes—and we can get it done,” the president said at a Pittsburgh union hall as he unveiled long-awaited details.

It would be paid for by an increase in the corporate tax rate from 21% to 28%—where it nominally was before the massive $1.8 trillion tax cut enacted in the previous Republican administration.

The administration also wants to boost the global minimum tax for multinational corporations from 13% and ensure they pay at least 21% in taxes in any country.

The White House said the tax hikes, combined with measures designed to stop offshoring of profits, would fund the infrastructure plan within 15 years.

Details of the new infrastructure proposal include:

•  $621 billion into transportation infrastructure such as bridges, roads, public transit, ports, airports and electric vehicles; 
•  $300 billion into improving drinking-water infrastructure, upgrading electric grids and delivering universal broadband for Americans who currently lack access;
•  $300 billion into building and retrofitting affordable housing, along with upgrading schools; and
•  $580 billion in American manufacturing, research and development and job training efforts, including $50 billion for domestic semiconductor manufacturing.

Of the $621 billion for transport, Biden would spend $115 billion to modernize 20,000 miles of highways, roads and main streets, and $20 billion to improve road safety for all users. It would fix the “most economically significant large bridges” and repair the worst 10,000 smaller bridges.

The idea is to revitalize not just America’s decaying infrastructure – which recently received a “C-minus” grade from the American Society of Civil Engineers (ASCE)—but our national imagination as well by putting millions of Americans to work immediately.

While Biden is proposing $2 trillion in new spending over eight years and taxes that spread the cost over 15 years, business interests are signaling they are open to negotiation.

The Business Roundtable, a lobbying group, has long called for infrastructure investment as essential to economic growth.

“And it’s even more important now to ensure a rapid economic recovery,” said Brendan Bechtel, chairman and CEO of Bechtel Group and Chair of the Business Roundtable Infrastructure Committee. “The administration and members of both parties should work together to promote jobs and economic growth by making long overdue investments in our nation’s aging physical infrastructure, and we urge them to do so through a bipartisan, regular orderly process.”

The Business Roundtable estimated an investment of approximately $1 trillion to $1.5 trillion is necessary to return U.S. physical infrastructure to a state of good repair, expand capacity to meet expected demand and invest in new green infrastructure.

Neil Bradley, executive vice president and chief policy officer of the U.S. Chamber of Commerce, called the Biden plan “seriously misguided” on the tax front.

“We need a big and bold program to modernize our nation’s crumbling infrastructure and we applaud the Biden administration for making infrastructure a top priority,” Bradley said.

“Properly done, a major investment in infrastructure today is an investment in the future, and like a new home, should be paid for over time – say 30 years—by the users who benefit from the investment,” he added.

Bradley said the Chamber “strongly opposes” the general tax increases proposed by the administration which will slow the economic recovery and make the U.S. less competitive globally – “the exact opposite of the goals of the infrastructure plan,” he added.

The American Association of State Highway and Transportation Officials (AASHTO) praised the infrastructure and jobs package, including more than half a trillion dollars for transportation, calling it overdue.

“AASHTO applauds the emphasis that President Biden has placed on investing in infrastructure to shore up and modernize our national multimodal transportation system for decades to come,” said Jim Tymon, AASHTO executive director.

“Today’s announcement is a first step in a conversation about a generational investment in transportation infrastructure addressing climate change, resiliency and equity that will support improved quality of life through innovative, safer and cleaner mobility options,” Tymon added.

Biden predicted a “good faith negotiation” with Republicans on Capitol Hill and concluded, “We have to do this; we must do this; we will do this.”