(Bloomberg) — President Joe Biden will outline his $2.25 trillion U.S. infrastructure plan on Wednesday, setting the stage for a drawn-out battle over his second big economic program after his pandemic-relief package’s relatively smooth sail through Congress.
Biden is unveiling the new plan in Pittsburgh, where he held his first campaign rally nearly two years ago at a Teamsters hall with a pledge to fight for middle-class Americans. Pittsburgh is now being held up as a paragon of a 20th century manufacturing hub revitalized by new industries.
The “American Jobs Plan,” as the administration is calling it, lays out an eight-years package that includes $620 billion for transportation and $650 billion for initiatives such as cleaner water and high-speed broadband. Biden’s plan would also allocate $580 billion to American manufacturing — which would include $180 billion for the biggest non-defense research and development program on record and $400 billion toward care for the elderly and disabled.
But Biden will face fierce opposition from Republican lawmakers, especially over his plan to pay for the package with tax increases. The president wants to raise the corporate income tax to 28% and set a 21% minimum levy on global corporate earnings. While the spending would be temporary, the tax hikes would be permanent — at least until new legislation gets enacted to change them.
The plan is also focused on addressing inequalities, and what the administration vows will be the creation of millions of jobs — many of them in unions.
Biden’s plan will prove far more complex to enact than the $1.9 trillion pandemic-relief bill the president signed into law earlier this month. Republicans are staunchly opposed to tax increases, and the breadth of measures will invite partisan battles as well as discord between moderate and progressive Democrats.
Senate Minority Leader Mitch McConnell said Wednesday that “It’s like a Trojan Horse that’s called infrastructure. But inside the Trojan Horse is going to be more borrowed money and massive tax increases on all of the productive parts of our economy.”
Administration officials say Biden is open to input from lawmakers of both parties on what provisions should be in a final package and how to pay for them. The White House expects to have robust outreach to GOP lawmakers and is committed to a serious discussion with them, a White House official said on the condition of anonymity. That effort began with inviting Republicans from relevant committees to briefings with Brian Deese, the National Economic Council director.
But an infrastructure-spending bill doesn’t necessarily need Republican support to become law. Congressional Democrats could choose to fit many of the president’s proposals into one or more budget reconciliation bills, which require only a simple majority vote in the Senate — though some elements may face parliamentary-rule challenges for inclusion in such legislation.
A key theme of the program 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.
What Biden is laying out in Pittsburgh is the first part of his long-term economic program, and he plans to unveil a second round of initiatives in mid-April. Those will focus on “helping families with the challenges like health care costs, child care, and education,” the White House said.
Pittsburgh has reoriented itself from being the hub of the steel industry to a growing region for modern industries, including health care and technology. The administration wants to help seed similar transformations in working-class cities and towns across the country.
House Speaker Nancy Pelosi told her caucus members Monday that she aims to move the infrastructure bill through her chamber by July 4, though it could slip to later that month, according to a person familiar with the matter. That timeline could allow for the Senate to pass the final version before Congress’s monthlong August recess.
For more articles like this, please visit us at bloomberg.com
©2021 Bloomberg L.P.