Infrastructure is a topic that claims to have bipartisan support, as well it should. Not only does infrastructure spending yield positive returns, but our nation’s infrastructure is in terrible shape. The nation must establish an infrastructure capable of taking us into the next century as well as reestablish manufacturing and localize our supply chains. In fact, we just received another reminder about the vulnerability of the global supply chain when a massive cargo ship caused a week long blockage of the Suez Canal. The timing sets up nicely for President Biden to unveil his bold $2 trillion infrastructure package.
Known as “The American Jobs Plan”, the proposal would; modernize 20,000 miles of highways and roads; repair 10,000 bridges, tackle climate change, and invest in manufacturing, workforce development, and research. A break down of the proposed spending:
Transportation:
- Electric vehicle incentives ($174 billion)
- Roads and bridges ($115 billion)
- Public transit ($85 billion)
- Railways, passenger and freight ($80 billion)
- Disaster resilience ($50 billion
- Airports ($25 billion)
- Road safety ($20 billion)
- Underserved communities ($20 billion)
- Waterways and ports ($17 billion)
For a more in-depth paper on what is needed in the transportation sector click here
Buildings and utilities:
- Affordable housing ($213 billion)
- High speed broadband ($100 billion)
- Electric grid and clean energy ($100 billion)
- Public schools ($100 billion)
- Water systems ($66 billion)
- Eliminate lead pipes ($45 billion)
- Child care facilities ($25 billion)
- Veterans hospitals ($18 billion)
- Community colleges ($12 billion)
- Federal buildings ($10 billion)
For a more in-depth paper on what clean energy proposals should look like click here
Manufacturing, workforce development, research and development:
- Domestic manufacturing ($52 billion)
- National Science Foundation ($50 billion)
- Supply chain support ($50 billion)
- Semiconductor industry ($50 billion)
- Workforce development ($48 billion)
- Clean energy manufacturing ($46 billion)
- Research infrastructure & research and development ($70 billion)
- New dislocated worker program ($40 billion)
- Climate technology ($35 billion)
- Small business support ($31 billion)
- Research and development ($30 billion)
- Pandemic preparedness ($30 billion)
- Research at HBUCs ($25 billion)
- Community investment ($20 billion)
- Innovation and competitiveness ($14 billion)
- Underserved communities ($12 billion)
- New rural partnership program ($5 billion)
There is much to like in the package and no doubt initiatives that many Americans can get behind, but due to the large price tag, the issues in how the bill will be paid for becomes tricky. The administration seeks to pay for the package with a substantial increase in corporate taxes. They seek to raise the corporate tax rate to 28 percent from 21 percent and will work to force multinational corporations to pay significantly more in tax to the United States on profits they earn and book overseas. It must be noted that a 28 percent corporate tax rate is still lower than the 35 percent rate that was in place before President Trump cut it to 21 percent. Regardless that is a difficult sell to moderate Republicans and possibly even some moderate Democrats.
More disturbing though is the attempts to tax small business and middle class that the administration is supporting. They gave New York the go-ahead to move forward with their congestion pricing debt scheme and Transportation Secretary Buttigieg floated the idea of a costly and burdensome national vehicles miles traveled tax.
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