Biden’s infrastructure plan includes higher corporate tax and transportation spending

President Joe Biden will unveil an infrastructure package worth more than $ 2 trillion on Wednesday as his administration focuses on strengthening the post-pandemic economy.

The plan Biden will present on Wednesday will include roughly $ 2 trillion in spending over eight years and raise the corporate tax rate to 28% to fund it, an administration official told reporters on Tuesday evening.

The White House said the tax hike, combined with measures designed to stop the offshoring of profits, would fund the infrastructure plan within 15 years.

Proposal:

• Invest $ 621 billion in transportation infrastructure such as bridges, roads, public transit, ports, airports and the development of electric vehicles
• Leading $ 400 billion to care for elderly and disabled Americans
• Inject more than $ 300 billion in improving drinking water infrastructure, expanding broadband access and modernizing electricity grids
• Investing over $ 300 billion in the construction and upgrading of affordable housing, as well as the construction and upgrading of schools
• Invest $ 580 billion in U.S. manufacturing, research and development, and vocational training efforts

The president will launch his second major White House initiative after adopting a $ 1.9 trillion coronavirus relief plan earlier this month. The administration aims to approve a first proposal to create jobs, revamp America’s infrastructure, and tackle climate change before turning to a second plan to improve education and expand paid vacation and care coverage. health.

Through the plan announced Wednesday, the White House intends to show that it can “revitalize our national imagination and put millions of Americans to work now,” said the administration official.

The White House plans to fund the spending by raising the corporate tax rate to 28%. The Republicans reduced the levy from 35% to 21% as part of their 2017 tax law.

The administration also aims to raise the global minimum tax for multinational companies and ensure they pay at least 21%. The White House also aims to discourage companies from listing tax havens as addresses and canceling offshoring-related expenses, among other reforms.

Biden hopes the package will create manufacturing jobs and save failed U.S. infrastructure as the country tries to emerge from the shadows of Covid-19. He and the Democrats in Congress are also aiming to tackle climate change and begin a transition to cleaner energy sources.

The president was due to announce his plans in Pittsburgh, a city where labor unions have a strong presence and the economy has shifted from traditional manufacturing and mining to healthcare and technology. Biden, who pledged to create union jobs as part of the infrastructure plan, launched his presidential campaign in a Pittsburgh union hall in 2019.

As Democrats tightly control both houses of Congress, the party faces challenges pushing through the infrastructure plan. The GOP broadly supports efforts to rebuild roads, bridges and airports and expand broadband access, but Republicans oppose tax increases as part of the process.

“We hear that the next few months could bring a so-called infrastructure proposal that could in fact be a Trojan horse for massive tax hikes and other job-killing left policies,” the head of the government said. minority in the Senate, Mitch McConnell, R-Ky. said earlier this month.

Biden said he hoped to gain Republican support for an infrastructure bill. If Democrats can’t get 10 GOP senators on board, they’ll have to try to pass the bill through budget reconciliation, which wouldn’t require Republicans to back the plan in a 50-split chamber. -50 per party.

They should also consider whether to combine physical infrastructure plans with other recovery policies, including pre-K universal paid leave and extended paid leave. Republicans probably wouldn’t support more spending to strengthen the social safety net, especially if Democrats decide to raise taxes on the rich to fund programs.

The administration official did not say whether Biden would seek to pass the plan with bipartisan support.

“We will start and have already started doing a lot of outreach to our counterparts in Congress,” the official said.

Asked on Monday how the bill might be passed, White House press secretary Jen Psaki said Biden “would let the mechanism of the bill go to [Senate Majority] Leader [Chuck] Schumer and other congressional leaders. “

From now on, Democrats will have two more attempts at budget reconciliation before the 2022 midterm. Schumer, DN.Y., hopes to convince the House MP to allow Democrats to use the process at least once more beyond those two opportunities, according to NBC News.

The party passed its $ 1.9 trillion coronavirus relief package without a Republican vote.

– CNBC’s Kevin Breuninger contributed to this report

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