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President Biden’s proposal will invest in the nation’s crumbling infrastructure but also seek to increase U.S. resilience to climate change. Local leaders were quick to embrace the plan.
The White House announced the details of President Biden’s $2 trillion infrastructure plan Wednesday, which seeks to address some of the nation’s most pressing issues while also accelerating the fight against climate change.
The eight-year spending plan would fix 20,000 miles of roadway and economically important bridges, remove lead water pipes from schools and old buildings, establish a national network of electric vehicle charging stations, retrofit affordable housing, invest in broadband expansion to reach all Americans, and modernize the electric power grid.
To help grow the economy, the plan also invests in job training and workforce development and includes initiatives to support providers of in-home healthcare for older and disabled Americans.
Biden called the wide-ranging proposal, dubbed the American Jobs Plan, “a once-in-a-generation investment in America unlike anything we have seen or done since we built the Interstate Highway System and won the Space Race.”
The White House plans to pay for the spending proposal through a series of corporate tax hikes that officials said would offset the cost over 15 years. The tax hikes include raising the corporate tax rate from 21% to 28%, ending tax breaks for fossil fuel companies, increasing the minimum tax on U.S. corporations located outside the country from 10.5% to 21%, and eliminate a rule that allows U.S. companies to pay zero taxes on the first 10% of profits when they locate investments outside the country.
Former President Donald Trump enacted the largest corporate tax cut in U.S. history when he slashed the corporate tax rate from 35% to 21%.
“Across all of these infrastructure investments, there will be a focus on making our infrastructure of the future more resilient to climate change,” a senior administration official said during a call with reporters to discuss the plan on background.
Biden said he hopes the plan can win bipartisan support and that he intends to consult with Republican leaders in Congress. But Republicans were quick to push back against the proposal citing both its cost and broad scope.
“Our nation could use a serious, targeted infrastructure plan. There would be bipartisan support for a smart proposal,” said Senate Minority Leader Mitch McConnell in a statement issued Wednesday. “This plan is not about rebuilding America’s backbone. Less than 6% of this massive proposal goes to roads and bridges. It would spend more money just on electric cars than on America’s roads, bridges, ports, airports, and waterways combined.”
Specific investments outlined in the plan include:
- $621 billion in transportation infrastructure such as bridges, roads, public transit, ports and airports, including $174 billion for electric vehicle development.
- $50 billion to improve infrastructure resilience through additions to FEMA’s Building Resilient Infrastructure and Communities program and HUD’s Community Development Block Grant program.
- $111 billion for water infrastructure improvements, including $56 billion in grants and low-cost flexible loans to states to modernize aging drinking and wastewater systems.
- $100 billion for broadband expansion, prioritizing support for broadband networks owned or operated by local governments, non-profits, and co-operatives.
- $100 billion to improve the nation’s electric grid and invest in clean energy.
- $213 billion to produce, preserve and retrofit more than 2 million affordable homes through a series of targeted tax credits, formula funding, grants and rental assistance.
- $400 billion to care for elderly and disabled Americans through expanding access to quality, affordable home- or community-based care.
Local government leaders, including the National Association of Counties, National League of Cities, and U.S. Conference of Mayors, were quick to embrace the plan. NACO said the American Jobs Plan will provide funding to help counties, which own and operate 45% of the nation’s road miles and 40% of U.S. bridges, pay for needed upgrades.
“We welcome this step toward comprehensive legislation that preserves local decision-making, dedicates investments in locally owned infrastructure and ensures solvency of the Highway Trust Fund,” said NACO CEO/Executive Director Matthew Chase.
Following on the heels of the $1.9 trillion coronavirus relief proposal earlier this month, Biden’s latest proposal will help jumpstart the nation’s post-Covid economic recovery, said Clarence Anthony, CEO and executive director of the National League of Cities.
“Local leaders are ready to rebuild and deliver far more than the bare minimum on infrastructure,” Anthony said.
But business leaders had reservations about the impact the proposal will have on the economy. The U.S. Chamber of Commerce is pushing back against the proposal, concerned that the tax hikes the Biden administration is relying on to pay for the proposal will harm the U.S. economy. Such a major infrastructure investment should be paid for over an extended period of time, like 30 years, by the users who benefit rather than U.S. corporations, the chamber said in a statement.
“We strongly oppose 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,” the chamber said.
Andrea Noble is a staff correspondent at Route Fifty.
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