Biden’s $2 Trillion Infrastructure and Jobs Plan

April 7, 2021

President Joe Biden proposed his opening bid on Wednesday for a $2 trillion infrastructure package that pushes the US toward a clean energy economy.

The bulk of Biden’s plan involves upgrading America’s roads, bridges, and public transit. But it also takes a sweeping definition of the word “infrastructure,” expanding long-term care for older adults through Medicaid, banning exclusionary zoning, and investing in community-based violence reduction programs, among many other things.

The American Jobs Plan, which he formally introduced Wednesday at a union training center in Pittsburgh, Pennsylvania, will invest about $2 trillion over the next eight years, amounting to about 1 percent of America’s GDP per year over that time, an administration official estimated.

“It’s time to build our economy from the bottom up and the middle out,” Biden said, emphasizing the need for more good paying and union jobs. “Wall Street didn’t build this country; you, the middle class, built this country. And unions built the middle class.”

The plan includes $621 billion in infrastructure spending dedicated to rebuilding the nation’s roads, bridges, ports, and rail systems. It also contains $300 billion to bolster manufacturing, $213 billion for affordable housing, and a collective $380 billion for research and development, modernizing America’s electricity grid, and installing high-speed broadband around the country. The plan also includes $400 billion for home- and community-based health and elder care.

The White House estimates the infrastructure plan will be paid for within the next 15 years, if Biden’s newly proposed “Made in America” tax plan is also passed. That tax plan would raise the corporate tax rate to 28 percent to pay for infrastructure and close a number of loopholes to prevent corporations from stashing their money in offshore banks to evade taxes. It does not, however, raise the capital gains tax — an idea Biden initially floated during his presidential campaign.

Biden plans to argue that revitalizing American infrastructure will create millions of well-paying jobs, lower the country’s carbon emissions, and help the US compete on the world stage, especially with China.

“Part of the economic logic of this plan is that this is not just about infrastructure, but it’s about creating more jobs and more industrial strength in the United States,” a Biden administration official told reporters. “When you make these infrastructure investments and couple it with the president’s commitment to buy American, you’re pulling forward and creating demand that will help accelerate new industries in the US.”

Biden’s infrastructure package will be paired with a second piece of his jobs plan, focused on paid family and medical leave and expanded health insurance, which he’s expected to unveil in the coming weeks.

This wide-ranging list of priorities — with another package yet to come — shows just how much Biden and congressional Democrats are hoping to pass in a relatively short time. With the 2022 midterms on the horizon, Democrats are running against the clock with already razor-thin majorities in the House and Senate. Unless Democrats can convince the Senate parliamentarian otherwise, they have only one more chance to pass a bunch of priorities through budget reconciliation — which requires just 51 votes, rather than the filibuster-proof 60.

Biden’s jobs plan also reveals an administration that is fundamentally rethinking the role of government in America. Rather than the anti-government ethos that has permeated both Democratic and Republican administrations since Ronald Reagan, the Biden administration is embracing the big-government mantle of historic Democratic Presidents Franklin Delano Roosevelt and Lyndon B. Johnson.

Multiple sources told Vox that while the White House plans to make bipartisan overtures to congressional Republicans, they ultimately view budget reconciliation as a reliable fallback plan to get an ambitious package passed.

“I think that is the endgame of all of this, most of this will be done through a reconciliation package,” a Democratic congressional aide told Vox. “That’s what the White House believes at the end of the day.”

Even so, the process will likely drag on much longer than the passage of Biden’s earlier $1.9 trillion Covid-19 stimulus bill. Precisely because the stimulus bill was passed so quickly, there is a lot of pent-up demand from lawmakers to get their state’s and district’s priorities included. Many members will be jockeying for their wish lists to be included in the next budget package.

Infrastructure will dominate conversations on Capitol Hill for months to come. To start, here’s Biden’s next big economic proposal, broken down.

What’s in the American Jobs Act

The Biden administration’s first priority was always to get the pandemic under control. Now that vaccinations are ramping up and Biden’s $1.9 trillion Covid-19 relief package is law, the president is turning to jobs.

The American Jobs Plan is designed to spur job growth in a number of sectors, including construction, clean energy, and long-term care. The plan envisions millions of housing units, school buildings, and veterans’ hospitals being built and retrofitted, lead pipes being eliminated from America’s water infrastructure, and 500,000 electrical vehicle charging stations being installed on the nation’s roadways.

Comparing the plan’s investment to the creation of the American highway system in the 1950s and the space race of the ’50s and ’60s, a Biden administration official said the goal of the plan is to “revitalize our national imagination and put millions of Americans right now in work that’s desperately needed for the nation.”

Here are the toplines of what’s in the American Jobs Plan.

  • The $621 billion in infrastructure spending is the largest chunk of Biden’s plan, aiming to modernize 20,000 miles of highways, roads, and main streets, fix the 10 most economically significant bridges in the country, and repair 10,000 smaller bridges. Biden’s plan calls for $85 billion to modernize public transit and $80 billion to be put toward Amtrak for repairs and improving train corridors.
  • Invests $174 billion in the electric vehicle market, building out a network of 500,000 EV chargers on roads by 2030. The plan also calls for the electrification of 20 percent of the school bus fleet, and using federal procurement to electrify the entire federal fleet, including the US Postal Service. It also talks about giving consumers point of sale rebates and tax incentives to buy American-made electric vehicles, incorporating a plan from Senate Majority Leader Chuck Schumer (D-NY).
  • Eliminates all lead pipes and service lines in drinking water systems, and puts $56 billion in grants and flexible loans to states, tribes, and territories to upgrade drinking, wastewater, and stormwater systems.
  • Invests $100 billion to build out the nation’s high-speed broadband infrastructure to 100 percent coverage, including in remote and rural areas. Biden’s plan also commits to working with Congress to reduce the price of broadband, but doesn’t specify exactly how.
  • Invests $213 billion to build and retrofit over 2 million homes and commercial buildings, including community colleges, aging schools, child care facilities, veterans’ hospitals, and federal buildings. Biden’s plan calls for 1 million affordable housing units to be produced or retrofitted, and over 500,000 homes for low- and middle-income homebuyers to be built or rehabilitated. The plan also calls for the elimination of exclusionary zoning.
  • Puts $16 billion toward plugging old oil and gas wells, abandoned coal and uranium mines, as well as funding environmental resiliency jobs including restoring forests, wetlands, and watersheds. The plan calls for $10 billion to create a Civilian Climate Corps to conserve public lands and waters, one of Biden’s campaign promises. Conservation advocates argued that environmental restoration and resilience jobs like these can put people to work even more quickly than clean energy jobs. “Some of the earliest job wins you’re going to see are going to be in the restoration space,” Collin O’Mara, president and CEO of the National Wildlife Federation, told Vox. “They don’t require materials or construction, new fabrication of different goods and materials. The only thing that’s needed is money.”
  • Invests $100 billion to modernize the nation’s electrical grid, and extend and expand the production and investment tax credits to accelerate clean energy jobs and projects in wind, solar, and other forms of renewable energy.

The bill also includes some ideas that might stretch the traditional definition of infrastructure:

  • Bolsters unions by calling on Congress to pass the pro-union Protecting the Right to Organize (PRO) Act. Biden’s plan similarly asks Congress to tie federal investments in clean energy and infrastructure to prevailing wage laws, and requires that investments in transportation meet existing transit labor protections.
  • Bans “exclusionary zoning” and harmful land-use policies, including minimum lot sizes, mandatory parking requirements, and prohibitions on multifamily housing.
  • Expands long-term care under Medicaid, increasing access to home and community-based services and giving more people the chance to receive care at home. The Biden administration’s plan aims to increase the quality of care-giving jobs and offer home health workers more chances to unionize and increase their wages.
  • As part of a plan to target workforce development in underserved communities, Biden’s plan would put $5 billion over eight years to support evidence-based community violence prevention programs, and invest in job training for formerly incarcerated individuals.

It’s worth repeating that this wide-ranging plan is Biden’s opening bid, not a final product. The next few months of negotiations with Congress will ultimately determine how many of these provisions will make it into a final bill — and it will take even more negotiations to get that bill passed.

Biden’s infrastructure plan is also a climate plan

Biden’s infrastructure plans contain one of his key campaign promises to tackle climate change: getting the nation’s economy to be powered by 100 percent clean electricity by 2035.

“This is something that is part of the president’s plan and that he intends to work with Congress on,” the Biden administration official said of the clean energy standard in the infrastructure plan.

Biden’s administration has been bullish on the potential of wind, solar, and other forms of renewable energy to become the primary source of power in the United States. Wind and solar are becoming attractive to utility companies simply because they’ve become much cheaper forms of power than what’s generated by fossil fuels. Renewables already produced 20 percent of US electricity in 2020 and could be poised to generate a greater share if Biden’s plan is passed by Congress.

Even with the weight of the federal government behind this goal, getting the country to 100 percent clean electricity will be easier said than done. Industry and utility representatives told Vox that getting the nation to 80 percent renewable electricity by 2035 is viewed as doable, but finishing the last 20 percent will be more challenging.

“It’s going to require everything we have from a policy and technology standpoint, and all of the tools we have in our toolbox,” Dr. Karen Wayland, policy adviser to electricity utility coalition group Gridwise Alliance, told Vox.

Congressional Democrats writ large — but especially progressives — view Biden’s infrastructure bill as their best hope to do something meaningful on climate change. Already, the effects of a warming planet are inescapable, with frequent strong storms and historic wildfires and droughts. As Biden releases his plan, progressives are already calling for something much bigger — $10 trillion in spending over the next decade on infrastructure and climate change.

“We think this is a once-in-a-lifetime opportunity to really put forward what we know we need to tackle the climate crisis that we face,” Rep. Pramila Jayapal (D-WA), also chair of the Congressional Progressive Caucus, told Vox in a recent interview.

Progressives have been in constant communication with White House staff, including White House Chief of Staff Ron Klain, communicating their desire for the administration to go even bigger.

“While this plan represents some of the boldest thinking we’ve seen from the Democratic Party in the last decade, the fact is it’s not bold enough to defeat the crises facing our country now,” Evan Weber, political director of youth climate organization Sunrise Movement, told Vox. “We’re definitely communicating with the administration how we’re feeling every step of the way.”

The next few months will be the real test for Democratic unity

With some Democratic lawmakers in the House already threatening to withhold their votes in order for a state and local tax deduction to be included in any tax policy changes to pay for infrastructure, lines are already being drawn within the Democratic caucus.

During Covid-19 relief bill negotiations, Biden was able to get the final product remarkably close to what he originally proposed. That could be much more difficult to replicate with an infrastructure package.

Whatever line the White House had to walk between pleasing moderate and progressive Democrats during the American Rescue Plan process will only be magnified in the coming months. Progressives will push the White House to be bolder, while moderates like Sen. Joe Manchin (D-WV) will push them to work with Republicans — who almost certainly would fight any attempt to raise taxes on corporations or the wealthy to pay for a massive bill.

“The question there is really what’s going to make it through the legislative process,” former Obama climate adviser John Podesta told Vox in a recent interview.

The process of drafting and passing an infrastructure bill and a pay-for structure that the White House, the Senate, and the House all agree on will likely be drawn out through the summer and into the fall. The House Transportation and Infrastructure Committee has laid out a September deadline to pass the approximately $500 billion five-year surface transportation reauthorization bill, and Senate committees are coming up with a topline number for their version of that bill. Still, negotiations over the surface transportation bill could be overshadowed by Biden’s larger infrastructure plan.

While there has been some talk on Capitol Hill about passing a bipartisan roads and bridges infrastructure bill (which is viewed as having the most potential for bipartisan agreement) and then putting the more ambitious pieces of Biden’s infrastructure plan into a budget reconciliation bill, nothing is final yet.

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