White House unveils $2 trillion infrastructure and climate plan, setting up giant battle over size and cost of government

Source: By Jeff Stein, Juliet Eilperin and Michael Laris, Washington Post • Posted: Wednesday, March 31, 2021

Ahead of speech in Pittsburgh, Biden administration releases sprawling effort to revamp U.S. transit, broadband, housing and more

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The White House on Wednesday unveiled an approximately $2 trillion jobs plan focused on infrastructure and the climate, a blueprint that represents President Biden’s vision for how to reshape the U.S. economy.

Under what the administration calls the American Jobs Plan, Biden aims to tackle some of the nation’s most pressing problems — from climate change to decaying water systems to the nation’s crumbling infrastructure.

The administration’s promises are vast and may prove difficult to enact, even if the effort can get through Democrats’ extremely narrow majority in Congress.

The plan, set to be introduced by Biden in Pittsburgh on Wednesday, says it will enable drivers across the country to find electric charging stations for their vehicles on the road. Every lead pipe in the country would be replaced. All Americans would have access to high-speed Internet broadband by the end of the decade. As many as 2 million homes and housing units would be built, retrofitted or renovated.

Biden released the spending plan with a slew of tax hikes on businesses that is likely to be the most contentious part of his proposal. The White House says the proposal would pay for itself over 15 years because many of the tax increases would remain even as the spending proposals only last for eight years. Legislation in Washington is typically evaluated on a 10-year budget window, and it is unclear precisely what the plan would cost over a decade.

On the tax side, Biden’s plan includes raising the corporate tax rate from 21 percent to 28 percent; increasing the global minimum tax paid from about 13 percent to 21 percent; ending federal tax breaks for fossil fuel companies; and ramping up tax enforcement against corporations, among other measures.

The tax measures help Biden address concerns that his spending package would add to an already large federal deficit, but they are likely to provoke a torrent of opposition from lobbyists and business groups who celebrated President Donald Trump’s 2017 tax cuts. Congressional Republicans have also panned the tax increases as damaging to U.S. investment and competitiveness and have pledged to oppose them.

Among Democrats, the plan has been met by objections from lawmakers in the Congressional Progressive Caucus, who say it is insufficient to meet the scale of the threat posed by climate change. Centrist Democrats are balking at another large spending package. Three House Democrats have already vowed to oppose the package because it does not reverse a cap on state and local tax deductions from Trump’s tax law.

And a number of priorities critical to congressional Democrats, including an extension on the expanded child credit, are being left by the White House for a second package, where their fate and timing remain unclear.

The U.S. Chamber of Commerce strongly criticized the proposed tax hikes in a statement on Wednesday, arguing that while infrastructure spending is necessary “the users who benefit from the investment” should pay for it.

While opening the door for negotiations over the details with Congress, the White House is adamant about the need for a sweeping economic program that goes beyond immediate coronavirus relief. It cites the threat posed by climate change, the deterioration of America’s infrastructure and the long decline of U.S. manufacturing. But the White House may face a significantly more difficult path toward enacting the jobs plan than it did with the stimulus plan, Biden’s first legislative priority, which unified congressional Democrats with relatively little dissent.

“It’s about jobs. It’s about investing in the industries of the future. And it’s about rebuilding parts of our communities that have long been forgotten,” White House press secretary Jen Psaki said on Tuesday.

A second economic proposal to be released in April is expected to include a major expansion in health insurance coverage, subsidies for child care and free access to community colleges, among other measures.

Biden’s plan devotes more than $600 billion to rebuilding America’s infrastructure, such as its ports, railways, bridges and highways; about $300 billion to support domestic manufacturing; and more than $200 billion in housing infrastructure. Other major measures include at least $100 billion for a variety of priorities, including creating national broadband, modernizing the electric power grid, upgrading school and educational facilities, investing in research and development projects, and ensuring America’s drinking water is safe.

Biden’s plan also includes measures unrelated to either infrastructure or the climate, such as an approximately $400 billion investment in home-based care for the elderly and disabled that was a top demand of some union groups. Additionally, the plan calls for passage of the Protecting the Right to Organize Act, or the PRO Act, a bill aimed at significantly strengthening workers’ rights to organize.

Biden’s plan lays out a large investment in clean-energy and environmental priorities. The programs include $100 billion to bolster the country’s electric grid and phase out fossil fuels, in part by extending a production tax credit for 10 years that supports renewable energy.

Biden, who has pledged to make the power sector carbon-free by 2035, will also ask Congress to adopt an “Energy Efficiency and Clean Electricity Standard” that would set specific targets to cut how much coal- and gas-fired electricity power companies use over time.

Investing in electric vehicles ranks as one of Biden’s top climate-spending priorities, with $174 billion designated for that market alone. White House officials predicted the federal incentives, paired with spending by state and local governments and private companies, would establish a national network of 500,000 charging stations by 2030, while spurring a domestic supply chain that will support union jobs and American-built cars and trucks.

The plan also will replace 50,000 diesel transit vehicles, while electrifying at least 20 percent of the classic yellow bus fleet that transports children to and from school each day.

Automakers, unions and environmentalists have been pressing the White House to provide support for electric vehicles, which make up only 2 percent of new sales in the U.S. auto market.

Alliance for Automotive Innovation chief executive John Bozzella, who represents major automakers, told reporters on Tuesday, “We need a comprehensive approach that looks at the economy broadly” to make the shift to cleaner cars.

Rep. Debbie Dingell (D-Mich.), who has been working to bring the different parties together on a compromise to cut carbon emissions from cars and trucks, said in an interview this week that funding charging stations and better transmission lines will be key. “People aren’t going to buy electric vehicles until we have the charging infrastructure and the electricity grid to support it,” she said.

In an effort to transition fossil fuel workers to other jobs, Biden’s plan devotes $16 billion to employing Americans to plug abandoned oil and gas wells and restore land that has been used for coal, hard-rock and uranium mining. In his news conference last week, the president said the workers would earn as much money sealing these wells as they would drilling them. Another $10 billion would fund the establishment of a new Civilian Climate Corps, which would employ people to restore landscapes and help prepare communities for global warming’s damaging effects.

The president will also ask Congress to provide $45 billion to replace the remaining lead pipes across the country, while reducing lead exposure in 400,000 schools and child-care facilities. Another $56 billion would go to grants and low-interest loans so state, local and tribal governments can upgrade aging water systems, while $10 billion would be spent on addressing polyfluoroalkyl and perfluoroalkyl (PFAS) chemicals that have contaminated drinking-water supplies across the country.

Some liberal lawmakers have said the plan does not go far enough, noting that Biden’s 2020 campaign plan called for $2 trillion in investments over just four years. “This is not nearly enough,” Rep. Alexandria Ocasio-Cortez (D-N.Y.) said on Twitter about the Biden plan.

On its own terms, the proposal does not solve all of the nation’s infrastructure woes, which have been building for decades. The plan, for example, cites a trillion-dollar backlog of needed road, bridge, rail and transit repairs, but proposes less than that.

But the Biden plan, if it receives congressional backing, would spur far-reaching changes that could begin shifting the trajectory of the nation’s transportation system. It calls for doubling federal funding for public transit, for example, a dramatic increase. Biden’s plan would also modernize 20,000 miles of streets and highways out of the total of 173,000 miles Biden says are in poor condition, and address problems with some of the tens of thousands of bridges that need repairs.

The plan includes more than $200 billion in housing programs, including $40 billion in public housing, although housing advocates say they worry that may be insufficient to meet the nation’s decaying housing stock.

“I worry that only $40 billion for public housing will go too quickly — the backlog at New York City Housing Authority alone is $40 billion — and create winners and losers by underfunding the need,” said Paul Williams, a former policy administrator with Chicago’s Department of Housing.