Adds President Joe Biden's remarks
President Joe Biden has unveiled a $2 trillion bill to rebuild infrastructure and invest in climate-focused projects over the next eight years, funded by raising corporate tax rates and removing tax breaks for oil companies.
The bill, dubbed the American Jobs Plan, would spend $621bn on transportation infrastructure and electric vehicles, $480bn on manufacturing and research, and $100bn to the electric grid. Biden says the proposal would create millions of jobs, increase US competitiveness and support ambitious climate goals.
"It is not a plan that tinkers around the edges," Biden said today in Pittsburgh, Pennsylvania. "It is a once-in-a-generation investment in America, unlike anything we have seen or done since we built the interstate highway system and the space race decades ago."
The administration plans to pay for the bill over the next 15 years by raising the corporate tax rate to 28pc from 21pc, increasing a global minimum tax on corporations and cracking down on tax avoidance. Another revenue source would come from eliminating "subsidies, loopholes and special foreign tax credits" for fossil fuels companies that are worth roughly $4bn/yr.
Biden said he is open to other ideas to pay for the bill, so long as it would not raise taxes on families earning more than $400,000/yr.
The bill will pose a test for Biden's ability to attract Republican votes for major legislation, since infrastructure spending generally has the most bipartisan support.
"I am going to bring Republicans into the Oval Office, listen to them and what they have to say, and be open to their ideas," Biden said. "We will have a good faith negotiation with any Republican who wants to help get this done, but we have to get it done."
The proposed tax increases could address concerns from moderate Democrats worried about deficit-financed spending, after Congress already spent $5 trillion on pandemic relief over the last year. But the proposed tax hikes are drawing opposition from business groups and harsh criticism from Republicans.
"This proposal appears to use 'infrastructure' as a Trojan horse for the largest set of tax hikes in a generation," Senate minority leader Mitch McConnell (R-Kentucky) said. "These sweeping tax hikes would kill jobs and hold down wages at the worst possible time."
If the White House is unable to find 10 Republican votes in the US Senate that could break a filibuster, proponents could still pass the bill using a process known as budget reconciliation. But that would force Democrats to strip out language that does not directly affect the budget, making it more difficult to pursue policies like creating a national clean electricity standard.
Vast spending
Biden's plan aims to deliver on dozens of campaign promises that stray far from traditional transportation infrastructure, such as expanding housing, bringing high-speed internet service to more areas and even making land more resilient to wildfires and drought.
The bill aims to help the electricity system reach net-zero emissions by 2035 with a Energy Efficiency and Clean Electricity Standard. The White House plans to negotiate details on how the standard would work with Congress. Another section would expedite construction of high-voltage power lines by offering tax credits and giving federal officials more power over siting.
The bill would also seek a 10-year extension and phase-down of federal investment tax credits and production tax credits for clean energy generation, which were extended last year.
The transportation section of the bill aims to modernize 20,000 miles of roads and highways, repair public transit facilities, improve rail service and upgrade ports and airports. It would also request $174bn to accelerate the switch to electric vehicles, such as installing 500,000 vehicle charging stations, electrifying transit vehicles and school buses, and electrifying the entire federal vehicle fleet. It would make electric vehicle subsidies worth $7,500 per vehicle available at the point of sale, lowering the sticker price of those vehicles.
Biden's plan calls for creating 10 "pioneer" projects to retrofit carbon capture equipment on steel, cement and chemical plants. Another part of the bill would support carbon capture by expanding and modifying the "section 45Q" tax credit. The bill would also offer $16bn in new funds to plug thousands of orphaned oil and gas wells and reclaim abandoned mines. Plugging wells would "pay the exact same rate that a union man or woman would get having dug that well in the first place," Biden said.
The proposed $480bn in manufacturing subsidies and research support could win support from "Rust Belt" states where the manufacturing base has declined. The funding includes $35bn for technology breakthroughs on climate change, $15bn for clean energy demonstration projects and $46bn for the federal government to spend on clean energy procurement from domestic manufacturers.
