Biden's $2-trn proposal: $174 bn for EVs, new funds for clean power

President Joe Biden will unveil a $2.25 trillion US infrastructure plan on Wednesday that the administration says will prove the most sweeping since investments in the 1960s space program and 1950s interstate-highway system.
 
“Like great projects of the past, the president’s plan will unify and mobilize the country to meet the great challenges of our time: the climate crisis and the ambitions of an autocratic China,” the White House said in a statement before Biden’s afternoon speech in Pittsburgh.
 
The four-part, eight-year plan dedicates $620 billion for transportation -- including a doubling in federal funding for public transit -- and $650 billion for initiatives tied to improving quality of life at home, like clean water and high-speed broadband. There’s $580 billion for strengthening American manufacturing -- some $180 billion of which goes to what’s billed as the biggest non-defense research and development program on record -- and $400 billion to address improved care for the elderly and people with disabilities.

 

Tax increases will be “fully paying for the investments in this plan over the next 15 years,” the White House said. The U.S. corporate income tax will go up to 28% from 21%, and a 21% minimum tax will be set on global corporate earnings.
 
What Biden lays out Wednesday is just the first part of his long-term economic program, with a second round of initiatives to be announced in mid-April. Those will focus on “helping families with the challenges like health care costs, child care, and education.”
 
The program will prove far more complex to enact than the $1.9 trillion pandemic-relief bill signed earlier in March, given staunch Republican opposition to tax increases and the breadth of measures that will invite partisan and even internal Democratic battles.

 
As seen with the Covid-19 bill, Biden’s initial plans are coming in much bigger than what economists had anticipated. The shift to a major expansion in fiscal policy has already driven up forecasts for growth this year, and sent Treasury yields climbing. While stocks have reacted with some volatility in recent weeks, the S&P 500 index hit a record high on Friday.
 
Biden’s plan will create millions and millions of jobs, an administration official told reporters, while declining to provide a specific figure.
 
Biden will present his “American Jobs Plan” Wednesday in Pittsburgh, a city the White House views as a prime example of an old manufacturing hub revitalized by new industries from health care to technology.

 
The administration wants the same type of reorientation that Pittsburgh saw to provide fresh opportunities to working-class cities and towns across the country. The plan envisions an expensive political gambit carried out over the next decade to try to create well-paying jobs by both updating the country’s infrastructure and preparing for the coming weather patterns wrought by climate change.
 
A major undercurrent through the infrastructure plan is addressing inequality and expanding help for segments of society that the administration judges have been left out in the past. For example, in addition to fixing the “ten most economically significant bridges in the country in need of reconstruction,” there’s $20 billion for a new program that will “reconnect” neighborhoods that were cut off by past investments. And all lead pipes will be replaced, to address water-quality issues.

 
Another key theme is bolstering US competitiveness against China. There’s $50 billion earmarked for domestic semiconductor manufacturing, and $40 billion more in upgrading research capacity in laboratories across the nation. Climate change is also a major target. The transportation funding proposed specifically directs $174 billion to electric vehicles, including sale rebates and tax incentives for consumers to buy American-made cars. While infrastructure has traditionally been a bipartisan endeavor, Republicans have warned they’re not in favor of the major tilt toward renewable energy in the administration’s approach. Senate GOP leader Mitch McConnell also said his party wouldn’t vote for tax increases.