What’s in Biden’s infrastructure investment, corporate tax plan

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President Joe Biden on Wednesday will call for a $2 trillion investment in the nation’s roads, waterways, airports, electric grid and broadband, arguing that a literal rebuilding of the nation’s infrastructure would lead to an economic boom, help fight climate change, advance racial equity and advance American competitiveness.

© Provided by Roll Call President Joe Biden’s infrastructure plan includes electric grid investments.

In a speech in Pittsburgh scheduled for 4:20 p.m., Biden will vow to rebuild the bulk of the nation’s built assets and promise to pay for it through a series of business tax code changes, including an increase in the corporate rate, that his administration says will pay for the infrastructure improvements within 15 years.

“We think that is important as a matter of fairness and also as a matter of encouraging domestic investment,” an administration official said ahead of the president’s speech. “So, the focus on corporate tax reform here reflects both the president’s longstanding commitments on the campaign, but also a practical perspective.”

The one-time investment is sweeping, covering everything from climate change to workforce development, and would amount to an investment of about 1 percent of the GDP per year over eight years, according to a fact sheet on the plan.  The price tag could make passage difficult in Congress, especially in the 50-50 Senate.

The plan calls for a $621 billion investment in transportation and resilience, or the construction of infrastructure that can withstand the recent spate of dramatic weather events attributed to climate change. 

But it would also invest in what the administration official called “care” infrastructure, spending  $400 billion toward expanding access to care for the aging and those with disabilities, including long-term care services under Medicaid by expanding home and community- based services. 

Biden would invest $100 billion in workforce development programs and $100 billion in expanding high-speed broadband, as well as $100 billion to build a more resilient electric grid and $213 billion to build, retrofit and preserve more than two million affordable places to live. 

Biden would spend $100 billion in upgrading and building new public schools, paying for half through direct grants and the other half through bonds. And he’d invest $10 billion to modernize and upgrade federal buildings, including through a Federal Capital Revolving Fund, as well as $18 billion to modernize Veterans Affairs hospitals and clinics.

He proposes $12 billion for community colleges, including facilities and access, and calls for $25 billion to upgrade child care facilities and increase child care in high-need areas. To address the latter, the president calls for an expanded tax credit to encourage businesses to build child care facilities at work, with employers receiving 50 percent of the first $1 million in construction costs per facility. 

Biden’s desire to address climate change is threaded throughout the proposal. He calls for a $174 billion investment “to win the EV market,” encouraging automakers to retool their supply chains and factories to accommodate the transition to electric vehicles as well as create sales rebates and tax incentives to buy American-made EVs. His plan includes grant and incentive programs to build a national network of 500,000 EV charging stations by 2030. 

Biden also proposes a $50 billion investment in infrastructure resilience, which would beef up grids, highways and other infrastructure to withstand extreme weather events. And he calls for a $35 billion investment in research into climate science. 

Biden proposes $115 billion to modernize 20,000 miles of highways and roads, rebuild 10,000 of the nation’s most fragile smaller bridges and pour $85 billion into transit, which would double funding for the program. The president would also spend $80 billion for Amtrak’s repair backlog and to upgrade passenger rail service, $25 billion for airports and $17 billion for inland waterways, ports and ferries. 

The plan comes less than a year after Congress spent billions of dollars on transportation systems throttled by the COVID-19 pandemic — but an administration official said the needs remain great. 

“This is a place where the urgency and need for action has been clearly identified again and again in Washington and we now have an opportunity to really do something about it,” the official said.  

The proposal also aims to rebuild the nation’s water infrastructure, which in some cases dates to the 1800s, with a $111 billion investment.  

Biden calls for eliminating all lead pipes and service lines — part of about 6 million 10 million homes nationwide and 400,000 schools and child care facilities — by investing $45 billion in the EPA’s Drinking Water State Revolving Fund and Water Infrastructure Improvements for the Nation Act grants. He’d also invest $56 billion in grants and loans to states to modernize aging wastewater systems.

Biden is bolstered by a Democratic Congress, though the tight margins in the Senate make passing the sweeping proposal more challenging. Congressional Democrats have hinted that if need be, they’ll push through parts or all of the package through the reconciliation process, which would allow Congress to enact legislation on taxes, spending and the debt limit with just 51 votes of the Senate.

“I think there’s about a 96 percent chance we’re on a path to reconciliation for the funding component,” said Rep. Garret Graves, R-La, a member of the House Transportation and Infrastructure Committee.

Graves said he worries that the administration is viewing the package from “a dollar perspective. I think it’s a mistake to come at it from a dollar figure.”

Instead, he said the administration should lay out its federal objectives on infrastructure and fit the price tag to the policy priorities.

Other Republicans have signaled they’d be amenable to some debt if it meant infrastructure investment. 

“I think infrastructure spending not paid for makes sense because the economy has been on its knees,” said Sen. Lindsey Graham, R-S.C., who argued the more appropriate way to handle debt is through an overhaul of entitlements.

Republicans including Rep. Sam Graves of Missouri, the ranking member on the House Transportation and Infrastructure Committee. and Sen. Shelley Moore Capito of West Virginia, the ranking member on the Senate Environment and Public Works Committee, have cautioned against an infrastructure bill that includes more than what has traditionally been considered infrastructure, such as roads and bridges. 

But Democrats such as House Transportation and Infrastructure Chairman Peter A. DeFazio of Oregon have said they’re not willing to cede their shot to meaningfully address climate change in the bill. That has spurred some Republican critics to dub the package “a Green New Deal” — a GOP rallying cry.

The plan makes certain the president is not shying away from proposing sweeping changes to the tax code designed to provide revenue to help pay for the plan. The corporate tax rate would increase to 28 percent, up from the 21 percent levy that took effect as part of the 2017 tax cuts enacted under President Donald Trump.

Biden’s plan is more modest than Sen. Bernie Sanders’ proposal to restore the 35 percent rate, but more aggressive than suggestions from Sen. Joe Manchin III, D-W.Va., a key moderate, to raise the rate to 25 percent.

Last year, the Urban-Brookings Tax Policy Center estimated that Biden’s corporate income tax increase and his plan for taxing multinational companies would each raise more than $700 billion over 10 years.

Biden also “will be putting forward additional ideas in the coming weeks for reforming our tax code so that it rewards work and not wealth, and makes sure the highest income individuals pay their fair share,” according to the plan.

Biden’s promise to not raise taxes on anybody making less than $400,000 annually was widely interpreted by tax experts to mean that he would restore the top individual income tax rate to 39.6 percent from its current 37 percent.

Other expected tax increases would come from limiting the value of itemized deductions taken by those earning more than $400,000 a year, and increasing the current 40 percent tax rate on estates while also slashing the $11.7 million per spouse that can be shielded from estate taxes.

Those tax proposals further suggest Democrats in the House and Senate will likely need the budget reconciliation process to get another one of Biden’s priority agenda items through the Senate.

The office previewing the proposal Tuesday night pointed to broad popularity of many of the components of the president’s proposal and dismissed criticism from Republicans that the plan comes so closely on the heels of another large COVID-19 pandemic response law.

“The rescue plan is helping to speed the recovery, bring us back to full employment faster than would otherwise be the case,” the official said. “The American jobs plan will help to invest in critical areas where we know that our, our productive capacity as a country is being set back.”

Rep. Pramila Jayapal, D-Wash., chairwoman of the Congressional Progressive Caucus, said Tuesday ahead of the White House briefing that while fixing the tax code would be useful, infrastructure is “something that really does not need a pay-for.” 

“I welcome Republicans coming along, but I frankly don’t see it,” Jayapal said.

Jennifer Shutt and Doug Sword contributed to this report.

The post What’s in Biden’s infrastructure investment, corporate tax plan appeared first on Roll Call.

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