President Joe Biden is set to introduce a sweeping infrastructure package Wednesday in Pittsburgh, Pennsylvania, which senior administration officials say will cost upwards of $2 trillion and is primarily fueled by re-raising the corporate tax rate set in the Trump administration’s 2017 tax cuts.
Biden’s package, called the “American Jobs Plan,” centers around setting a new corporate tax rate at 28%, a compromise between the 21 percent set by 2017’s Tax Cuts and Jobs Act and the previous rate of 35 percent, a senior official told the press ahead of Biden’s Wednesday speech. (RELATED: Biden Administration Reportedly Crafting First Major Tax Hike Since 1993)
The New York Times reported that the rates are expected to last for 15 years and will cover eight years worth of construction and growth.
In total, Biden’s plan focuses on four core areas:
- Transportation infrastructure, including “investments in our roads, bridges, rails, and other elements” ($620 billion)
- Improving the quality of home life by modernizing public utilities like “water, Internet, our homes themselves, and the electricity that we rely on” ($650 billion)
- Investing in care infrastructure for the “millions” of elderly and disabled Americans, their families, and home care workers ($400 billion)
- Providing incentives to jumpstart private sector innovation, research and development, and domestic manufacturing of semiconductors, clean energy projects, and other areas that we identified as important to American supply chains” ($580 billion)
The administration official noted that the United States must make rapid improvements to each of the aforementioned areas to compete with China, which has already invested heavily in the space.
The plan Biden will unveil Wednesday focuses primarily on infrastructure and changes to the corporate tax rate, the official added, suggesting that any adjustments to the individual and family tax rates will be included in a followup package set to be introduced in May.
That plan is expected to include numerous human investments favored by progressive members of the Democratic party, including paid family leave, enhanced child care provisions, and improvements to unemployment relief.
Still, Republican lawmakers — and even some moderate Democrats — have expressed concern about launching such a massive spending package so soon after approving Biden’s coronavirus stimulus package, the $1.9 trillion American Rescue Plan.
Given the potential lack of support from Republicans, a senior administration official suggested that Biden and Democratic leadership could pass the plan through reconciliation but would still seek to “solicit input” from the opposition party.
“Elements of this investment package are places where we have seen a lot of enthusiasm in the past to make progress,” the official told reporters. “They’re issues that are — that have broad support among the American people, and there has been a lot of eagerness to move in Congress on them as well.”
“We thought it’s an important initiative to start the process with the President being very clear that he’s got a plan and that he’s open to hearing what others think, the official continued. “But what he is uncompromising about is the urgency of the moment and the need to really deliver for the American people and make good on building back better in this moment.”