The Biden Infrastructure Plan and Your Wallet

• Author: Michael Bordonada
• Posted: 2024-09-27

Fresh off of one win, President Joe Biden is looking for another. His enactment of the wildly popular American Rescue Plan may have created the momentum for it to happen. At the beginning of April, the President traveled to Pittsburgh to discuss his new infrastructure plans. The package - which totals over $2 billion - would be one of the largest investments in American infrastructure

What's In It

The two trillion plan contains...a lot. Perhaps most interesting is the way that it expands upon the traditionally accepted definitions of infrastructure. First, the legislation obviously contains hundreds of billions for what is traditionally agreed to as infrastructure, including hundreds of billions for roads, bridges, public transportation, and more. A huge theme of this legislation is that it helps to shift the country to a clean and green economy, and it invests $174 billion in green infrastructure.
Then, the definition changes. The legislation invests over half a billion in affordable housing, high-speed broadband, a green energy grid, removing lead from water systems, and improving energy efficiency and ventilation in public schools. It also invests heavily in the labor market, with the stated goal of the President being to ensure that Americans can compete with China in jobs of the future. This means billions to manufacturing, the National Science Foundation, Historically Black Colleges & Universities, and more. Furthermore, the plan also invests billions in elder care, ensuring that Americans can care for their aging parents and other older citizens.

Who Pays For It

One of the reasons that the American Rescue Plan was so popular was because it didn't actually raise taxes on anyone. Instead, it cut taxes, gave direct stimulus payments, and created a variety of other popular cash grant programs. That won't be the case for the proposed infrastructure plan, which would be fully paid for by a series of tax increases.
President Biden would raise the revenue to pay for the plan in a few different ways. First, he would eliminate tax changes that create "incentives" to move jobs and businesses overseas, as well as changes that make it easier for private companies to shift their profits to other nations and avoid taxes.
The President has also proposed increasing the corporate tax rate from 21% to 28%, reversing some of the changes of the major tax plan incurred during the Trump presidency. This plan has already run into some objections, with a few Democrats objecting to the proposed corporate tax hike. Given the narrow margins by which Democrats control Congress, this essentially requires that at least some of the plan will have to be changed. The President has also said that he is open to raising taxes on individuals who make more than $400,000 a year, but is not willing to tax anyone who makes less than that.
This plan - if enacted as proposed - would mean that no national debt would be incurred in order to pay for the infrastructure improvements.

Odds of Success

Democrats control both the House of Representatives (barely) and the United States Senate (by the thinnest of all possible margins), which would mean, in theory, that the White House should have a very good chance of passing the package. It polls well, with polls indicating that a significant majority of Americans favoring both the basic contours of the plan and his proposed method of paying for it. Republicans have also said that they are not explicitly ruling out the chances of working with the President, although many have said that the price tag for such a plan is too high.
Furthermore, Democrats appear set to use a budgetary process known as reconciliation to pass the plan. Use of reconciliation would mean that Democrats needed only a majority of votes - 51 - instead of the full 60 that is typically needed to overcome a filibuster.
In theory, the plan has the momentum to get done. However, exact language hasn't been proposed, and there have been no hearings on the bill, as of yet. There is plenty of time for things to go wrong, but at least for now, the plan is popular, Democrats overwhelmingly support it, and President Biden appears to be on the right track for another major legislative victory.