Joe Biden launches $ 2 trillion plan to renovate infrastructure funded by corporate tax hike

United States President Joe Biden will propose this Wednesday to invest around $ 2 billion in infrastructure with the aim of creating jobs and launching a plan he wants to become the emblem of his administration.

The first phase of “Build Back Better” program, that he will deliver in a speech in Pittsburgh, Pennsylvania, will detail these investments planned over eight years.

The plan includes the attribution $ 620,000 million to the transportation sector to modernize more than 32,000 kilometers of roads and highways.

Biden wants this plan to be one of the hallmarks of his tenure, which began on Jan.20. The president “believes his role is to offer a bold perspective on how we can invest in our country, our communities, our workers,” said his spokesperson, Jen Psaki.

The investments would be financed in particular by an increase in the corporate tax, which would go from 21% to 28%. The new figure, however, would remain historically low. According to the White House, the rate would remain at its lowest level since World War II; Except for the years in which Trump’s tax reform, approved in 2017, was in effect, which provided significant tax breaks for businesses.

The new legislative offensive comes shortly after Congress passed a $ 1.9 trillion plan to undo the damage caused by the COVID-19 pandemic to the economy.

Wednesday’s speech will be the starting point for a battle in Congress that is expected to be as tough as it is uncertain. The Democratic majority is very tight and tough negotiations are expected, with fierce resistance from the business community that could thwart any attempt to work with Republican lawmakers. “It seems President Biden has an insatiable appetite to spend more money and raise people’s taxes,” Rep. Steve Scalise of Louisiana, House Republican Party leader, said in an interview.

The coming months will test Biden’s negotiating skills, former senator described as “Old Lion” of politics by Barack Obama, of which he was vice-president in his two terms.

“Urgency to act”

“The president clearly wants to show that he has a plan and that he is open to discussion,” a senior White House official said. “But he will not make commitments under the urgency of acting” and the need to be ambitious to “reinvent” a “new American economy”, he added.

The plan considers develop “the electric car revolution” with, for example, the switch to electric buses for 20% of those intended for school transport.

Also consider build infrastructures that are more resistant to changes linked to climate change.

Repairing or building roads, bridges, railroads, ports and airports, is an idea that speaks volumes to Americans in general, because Much of the country’s infrastructure dates back to the 1950s and its deterioration is indisputable.

An additional $ 111 billion would be used to replace lead water pipes and improve sewers. Broadband internet would cover the whole country with $ 100 billion. In contrast, $ 100 billion would be used to improve the power grid and provide clean electricity. The plan, which also aims to strengthen the manufacturing industry in the United States, includes rehabilitating homes, upgrading schools, training workers and renovating hospitals.

The tax code would also be updated so that companies could not merge with a foreign company and avoid taxes by moving their headquarters to a tax haven. And among other provisions, it would increase IRS audits of companies.

But beyond the hackneyed phrase “Democrats and Republicans can agree on this issue”, reaching consensus will not be easy.

Trump and Obama, Biden’s two predecessors, also made similar phrases about possible deals and made big promises in this area, which ended up being a dead letter.

Transportation Secretary Pete Buttigieg, who will be on the front line of the plan, believes the stars will align this time around. “We have a tremendous opportunity to win the support of both sides to think big and be bold in infrastructure,” Buttigieg said.

“There is no need to explain to Americans that we have to work on infrastructure and the reality is that the climate dimension cannot be separated” from this challenge, he said.

Biden’s choice of Pittsburgh to unveil the plan has significant economic and political resonance. Not only did he win Pittsburgh and its surrounding county to help secure the presidency, but he launched his campaign there in 2019. The city famous for the steelworks that fueled America’s industrial boom has steadily pivoted towards technology and health care., Attracting university graduates from the West. Pennsylvania, a sign of how economies can change.

(With information from AFP and AP)

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