Economy

White House Details Biden’s Infrastructure Proposal

SK Ashby
Written by SK Ashby

The Biden administration and congressional Democrats have been in discussions about a large infrastructure spending bill for some time and previous reports told us it would cost up to $4 billion, but now we know how that nebulous figure will be divided.

President Biden is visiting Pittsburgh, Pennsylvania today where he plans to unveil the first half of the total package that will cost about $2 trillion or more.

The plans being unveiled today will cover infrastructure, but not just the roads and bridges we all drive on. I will also cover other areas of the economy in addition to transportation.

From Bloomberg:

The four-part, eight-year plan dedicates $620 billion for transportation, including a doubling in federal funding for public transit. It would provide $650 billion for initiatives tied to improving quality of life at home, like clean water and high-speed broadband. There’s $580 billion for strengthening American manufacturing -- some $180 billion of which goes to what’s billed as the biggest non-defense research and development program on record -- and $400 billion to address improved care for the elderly and people with disabilities. [...]

Another key theme is bolstering U.S. competitiveness against China. There’s $50 billion earmarked for domestic semiconductor manufacturing, and $40 billion more in upgrading research capacity in laboratories across the nation.

Climate change is also a major target. The transportation funding proposed specifically directs $174 billion to electric vehicles, including sale rebates and tax incentives for consumers to buy American-made cars.

Biden will also call for paying for the plan by raising taxes on corporations from 21 to 28 percent among other things. That would still leave corporate taxes lower than they were before Trump's tax cut, but higher than they are today.

Critically, centrist Senator Joe Manchin himself has already called for raising the corporate tax rate to pay for the plan so convincing him shouldn't be a problem. The only problem is Republicans, the filibuster, and the necessity of using budget reconciliation. Manchin knows that West Virginia could do quite well for itself if he plays ball.

Republicans are going to throw a fit if Democrats use reconciliation to pass this, but they should be ignored. Ignore the deficit scolds, ignore the cries about "socialism," ignore everything including critical coverage in the political press. Just get it done.

This isn't just a plan for rebuilding the country. It's also a plan for winning the next two elections.