U.S. President Joe Biden briefs on the government’s response to coronavirus disease (COVID-19) and vaccination status during an event in the South Court auditorium at the White House in Washington on March 29, 2021.
Jonathan Ernst | Reuters
President Joe Biden will unveil more than $ 2 trillion in infrastructure on Wednesday as his administration shifts focus to strengthening the post-pandemic economy.
The plan, which Biden will outline on Wednesday, will spend around $ 2 trillion over eight years and would raise the corporate tax rate to 28% to fund it, an administration official told reporters on Tuesday evening.
The White House said the tax hike, combined with measures to prevent profit shifting, would fund the infrastructure plan within 15 years.
The proposal would:
- Invest $ 621 billion in transportation infrastructures such as bridges, roads, public transportation, ports, airports and the development of electric vehicles
- Directly $ 400 billion to care for elderly and disabled Americans
- Spend more than $ 300 billion on improving drinking water infrastructure, expanding broadband access and modernizing power grids
- Spend more than $ 300 billion building and retrofitting affordable housing, and building and upgrading schools
- Invest $ 580 billion in American manufacturing, research and development, and training efforts
The president is set to launch his second major White House initiative after passing a $ 1.9 trillion coronavirus relief plan earlier this month. The government intends to approve an initial proposal to create jobs, upgrade U.S. infrastructure, and combat climate change before moving on to a second plan to improve education and expand paid vacation and health insurance.
With the plan announced on Wednesday, the White House aims to show that it can “revive our national imaginations and get millions of Americans to work right away,” the government official said.
The White House plans to fund the spending by increasing the corporate tax rate to 28%. Republicans cut the tax under their 2017 tax bill from 35% to 21%.
The administration is also committed to increasing the global minimum tax for multinational corporations and ensuring that they pay at least 21%. The White House also wants to discourage companies from listing tax havens as an address and, among other things, writing off the costs associated with offshoring.
CNBC policy
Read more about CNBC’s political coverage:
Biden hopes the package will create manufacturing jobs and save flawed American infrastructure as the country tries to get out of the shadow of Covid-19. He and the Congress Democrats also want to tackle climate change and begin a transition to cleaner energy sources.
The president should announce his plans in Pittsburgh, a city where the organized labor force is strong and the economy has transitioned from traditional manufacturing and mining to healthcare and technology. Biden, who has pledged to create union jobs as part of the infrastructure plan, launched his 2019 presidential campaign in a union hall in Pittsburgh.
While the Democrats closely control both houses of Congress, the party faces challenges as it passes the infrastructure plan. The GOP largely supports efforts to rebuild roads, bridges and airports and to expand broadband access. The Republicans, however, oppose tax increases as part of the process.
“We hear that the next few months could bring a so-called infrastructure proposal that could actually be a Trojan horse for massive tax hikes and other job-killing left wing measures,” said Mitch McConnell, Senate Minority Leader, R-Ky. said earlier this month.
Biden said he hoped to win Republican support for an infrastructure bill. If Democrats can’t get 10 GOP Senators on board, they’ll have to try to get the bill passed through a budget vote, which wouldn’t force Republicans to back the plan in a chamber 50-50 split by party.
They would also need to consider combining the physical infrastructure plans with other recovery policies, including universal pre-K and extended paid vacation. Republicans would likely stop supporting spending to bolster the social safety net, especially if Democrats try to raise taxes on the rich to fund programs.
The administrative officer didn’t say whether Biden would try to pass the plan with bipartisan support.
“We will begin, and will have already begun, to fully reach our colleagues in Congress,” said the official.
When asked how the bill could be passed, White House press secretary Jen Psaki said Biden would “leave the mechanics to the bill” [Senate Majority] leader [Chuck] Schumer and other leaders in Congress. “
As of now, Democrats will have two more shots in the budget vote before halfway through 2022. Schumer, DN.Y., is hoping to convince the House MP to allow the Democrats to re-enter the process at least one more time beyond these two possibilities, according to NBC News.
The party passed its $ 1.9 trillion coronavirus aid package without a Republican vote.
– CNBC’s Kevin Breuninger contributed to this report
Subscribe to CNBC on YouTube.
