"It's a once-in-a-generation investment in America": Biden unveils ambitious $2 trillion infrastructure plan
President Biden unveiled one of the most ambitious federal spending proposals in American history on Wednesday, a more than $2 trillion plan that would reshape the American economy by renovating some of the nation's most iconic landmarks, rebuilding aging schools and spending billions of dollars to fight climate change.
The proposal formally unveiled by Mr. Biden at a Pittsburgh carpenter's training facility on Wednesday is the first of a two-part infrastructure plan he has spent weeks crafting with aides and outside advisers. In remarks announcing the plan, Mr. Biden said that his legislation would help address economic inequality, and correct the "distorted and unfair" economy that primarily benefits the wealthiest Americans.
"It's time to build our economy from the bottom up and the middle out," Mr. Biden said Wednesday, adding that his plan "rewards work, not just rewards wealth." He said the proposal, called the American Jobs Plan, would allow for the U.S. to become the "strongest, most resilient innovative economy in the world."
"It's a once-in-a-generation investment in America," Mr. Biden said.
The president said that the first prong of his proposal "modernizes transportation infrastructure."
At least $621 billion would be spent to rebuild more than 20,000 miles of highways and roads and repair more than 10,000 bridges. Major airports would undergo significant facelifts and roughly 500,000 new electric vehicle-charging stations would dot the national landscape by 2030. More than $200 billion would be spent to update or build two million affordable housing units. Clean, lead-free drinking water would flow into thousands of schools for the first time at a cost of $111 billion. And $18 billion would be spent to update veterans' hospitals, some of which haven't been significantly updated in more than 50 years.
"Our infrastructure is crumbling," Mr. Biden said. "Put simply, these are investments we have to make. We can afford to. Or put another way, we can't afford not to."
The new Biden proposal would be paid for with an overhaul of the nation's corporate tax policy that would reverse nearly the entire Trump tax plan passed in 2017. Mr. Biden would raise corporate tax rates from 21% to 28% and would renegotiate with other countries a global minimum tax on multinational corporations. The corporate tax overhaul would generate $2 trillion over the next 15 years, according to White House estimates. Mr. Biden pledged on Wednesday that no one making under $400,000 would see a hike in their taxes.
"No one should be able to complain about that. It's still lower than what that rate was between World War II and 2017," Mr. Biden said, referring to the previous corporate tax rate of 35%. He also signaled he would be willing to negotiate with members of Congress.
"There's no reason why it can't be bipartisan. The divisions of the moment shouldn't stop us from doing the right thing for the future," Mr. Biden said, adding that he would be willing to enter "good faith negotiations" with any Republicans.
The Americans Job Plan will be a priority for the White House going forward. In a statement previewing the legislation, the White House compared the proposal to lofty federal spending programs from the 1950s and 1960s such as the interstate highway system and the space race. The administration added that the new Biden plan "will unify and mobilize the country to meet the great challenges of our time: the climate crisis and the ambitions of an autocratic China."
But the White House would not say how many jobs it believes the plan would create. A senior aide who briefed reporters late Tuesday would only say the plan would generate "millions and millions of jobs."
Next month, aides say Mr. Biden will unveil what some call "human infrastructure" ideas, including plans to provide free community college to eligible low-income Americans and expand pre-kindergarten classes nationwide. Mr. Biden referred to this second prong of his proposal as the American Family Plan.
The new plan builds on the nearly $2 trillion pandemic relief package that passed this month with broad national support but no Republican votes. But the senior aide said the two pieces of legislation have "different economic logic." While the rescue plan was designed to bring immediate relief during a crisis, the jobs plan is a multi-year investment paid out over 15 years.
Debate over the new legislation is expected to dominate Washington well into the summer and is already drawing strong Republican opposition. But it also could cleave apart a Democratic Party that has mostly united on economic policy in the opening weeks of the Biden administration.
In the days leading up to the president's formal announcement, White House aides have faced competing ideological concerns: A liberal wing eager for bolder, more expensive proposals to revamp the nation's decaying infrastructure while using the legislation to aggressively combat climate change, versus moderates – many from highly-taxed states – fearful of federal overreach and enacting tax increases on corporations or wealthy Americans that could slow the economic rebound and provide political fodder for anti-tax Republicans seeking to retake control of Congress next year.
Senate Minority Leader Mitch McConnell said Monday that he doesn't want to see tax increases "across the board on America."
"My advice to the administration is if you want to do an infrastructure bill, let's do an infrastructure bill," McConnell said. "Let's don't turn it into a massive effort to raise taxes on businesses and individuals."
The White House is already reaching out to lawmakers in both parties and the president is open to "hearing what others think," the senior aide said, but that Mr. Biden is "uncompromising" about the "urgency of the moment."
But the White House already seems to have hit an early stumbling block for its plan to raise taxes to generate revenue for the proposal. At least five New Jersey and New York Democratic lawmakers are threatening to vote against any tax increases that undo the 2017 Trump tax cuts unless the Biden administration agrees to revisit limits on the state and local tax deduction, known as the "SALT" deduction.
The 2017 bill capped the amount of state and local taxes that could be deducted from federal income taxes at $10,000, a limit that hits particularly hard in states with high local taxes like property taxes. An analysis by the nonpartisan Tax Foundation found that the 10 counties that benefited the most from the deduction were all located in New Jersey, California, New York and Connecticut. Repealing the cap, another Tax Foundation study says, would reduce federal revenue by more than $600 billion over the next 10 years, and primarily benefit the top 20% of earners – a potential problem for a White House that is already looking for ways to reign in the cost of an infrastructure package.
Democratic Representatives Josh Gottheimer and Bill Pascrell of New Jersey and Tom Suozzi of New York argued Tuesday that the cap affects middle and lower income residents in states where the cost of living is high.
"We say 'No SALT, no deal,'" the trio said in a statement. "The SALT cap doesn't just hurt our taxpayers but our communities too, which face savage cuts to vital public services if relief is not enacted. New York and New Jersey are also the largest net donors to the federal government and annually contribute more than we receive. Therefore, we will not accept any changes to the tax code that do not restore the SALT deduction and put fairness back into the system."
Another New Jersey Democrat, Congressman Tom Malinowski, told CBS News on Tuesday that he can only vote for a new jobs plan "that has a meaningful tax impact on families in my district if it also addresses SALT." Congresswoman Mikie Sherrill, a fourth New Jersey Democrat, said in a statement that any changes to the 2017 tax bill "need to address the SALT deduction cap," arguing it has hurt middle-class families in her district. She expressed confidence the delegation would be able to find common ground with the Biden administration.
The group gains more leverage as more members commit to withholding their votes unless the deduction is addressed. With a slim 219-211 majority in the House, Democrats can afford to lose no more than three votes if they have to pass a bill along party lines.
After weeks of behind-the-scenes pressure, the administration appears to be taking their concerns seriously, working to schedule a meeting this week for the bipartisan House Problem Solvers Caucus, co-chaired by Gottheimer, with White House Counselor Steve Richetti and Legislative Affairs Director Louisa Terrell.
Progressive Democrats have also expressed concerns about the bill. In a statement on Wednesday, House Progressive Caucus Chair Pramila Jayapal said the package is a "welcome first step" but called for something "substantially larger in size and scope," citing Mr. Biden's campaign promise to spend $2 trillion over 4 years on infrastructure.
"We believe that our country is ready for an even bolder, more comprehensive and integrated plan that demonstrates the size, scope, and speed required to aggressively slash carbon pollution and avoid climate catastrophe; create millions of good, family-sustaining, union jobs; improve Americans' health and safety; reduce racial and gender disparities; and curb income inequality by making the wealthy and large corporations finally pay their fair share in taxes," Jayapal said.
