President Joe Biden pledged to build a modern, sustainable infrastructure and an equitable, clean energy future during his campaign. At the end of March, he took the first step by introducing a massive spending proposal that includes much more than infrastructure. According to the White House, the $2.3 trillion American Jobs Plan would be the most extensive jobs package of its kind since World War II. It’s so large that it will take 15 years to pay for eight years of spending.
The plan includes traditional infrastructure projects. With a focus on climate change, it also expands electric vehicle use, cleans up water systems, and expands broadband access. The biggest news for manufacturers is that it invests $580 billion in the manufacturing sector, worker training, and R&D.
The provisions include:
A new Commerce Department office dedicated to monitoring domestic industrial capacity.
$50 billion in semiconductor manufacturing and research.
$20 billion for regional innovation hubs.
$52 billion in existing capital access programs.
Support for modernizing manufacturing supply chains, including the auto sector.
For a breakdown of the plan by PoliticoPro, click here.
Unfortunately, the spending proposal came with the Made in America Tax Plan that raises taxes on businesses to help pay for it. The tax plan partially rolls back the low rates former President Donald Trump enacted in the 2017 Tax Cuts and Jobs Act by raising the corporate tax rate from 21% to 28%. It also increases the minimum tax on U.S. multinational corporations to 21% and eliminates the rule that allows U.S. companies to pay no taxes on the first 10% of returns when they locate investments in other countries.
Former Presidents Trump and Obama pledged substantial infrastructure improvements while in office but failed to get a package through Congress. Even though rebuilding the country’s infrastructure is bipartisan, the details are not so straightforward. Biden’s revenue raisers have vocal opponents. Senate Minority Leader Mitch McConnell indicated the plan is dead on arrival, while some Democrats don’t think it goes far enough. Biden signaled a willingness to compromise, but Democrats will not rule out using the same procedural tool, budget reconciliation, used to pass the $1.9 trillion pandemic relief bill in March without Republican support.
Details are still emerging on the president’s infrastructure package. AMT is reviewing and assessing benefits versus costs. While the association supports several aspects of the spending package, it does not support paying for it with tax increases on manufacturers. Please contact your members of Congress to let them know how you feel about the proposal. If you need help, contact me at athomas@AMTonline.org.
Biden will introduce part two of his economic recovery plan in the coming weeks. Dubbed the American Families Plan, it will include child care and health care reforms.