Biden’s Infrastructure Plan: Where the Money Is Going

Source: By Andrew Duehren, Wall Street Journal • Posted: Sunday, April 4, 2021

The $2.3 trillion proposal includes spending on bridges, roads, mass transit and water infrastructure

Roughly $620 billion of the proposal goes toward surface transportation like highways, rail and roads. Photo: jim lo scalzo/EPA/Shutterstock

The White House rolled out a $2.3 trillion plan that makes major investments in the nation’s infrastructure, along with a series of tax increases on corporations. President Biden detailed the proposal in a speech in Pittsburgh on Wednesday afternoon.

The broad outline now goes to Capitol Hill. Republicans have indicated that they would be opposed to a large package accompanied by tax increases, meaning Democrats will likely need to leverage their slim majorities in Congress to pass it along party lines.

What is in Biden’s infrastructure plan?

Much of the money in the plan goes toward upgrading roads, bridges and other parts of the nation’s infrastructure. But it also provides for large chunks of funding in other areas like caring for elderly and disabled Americans. It includes hundreds of billions in investments in manufacturing, workforce development and research and development.

Much of the money in the plan goes toward upgrading roads, bridges and other parts of the nation’s infrastructure. Photo: Gene J. Puskar/Associated Press

Does it raise taxes?

Yes. Along with the spending, the White House has proposed a number of tax increases, including raising the corporate tax rate to 28% from 21% and tightening a series of international tax rules. White House officials have said the tax increases would, over 15 years, cover the cost of the package.

The plan doesn’t call for increases on individual income taxes, though the White House is looking at increasing the top marginal income-tax rate and raising taxes on capital gains in future legislation. Increasing the gas tax, an idea often raised as a way to finance infrastructure spending, also isn’t in the plan.

What does the plan do for transportation?

Roughly $620 billion of the proposal goes toward surface transportation like highways, rail and roads. The funding would modernize 20,000 miles of road and fix hundreds of bridges across the country, according to the White House.

Of that money, $85 billion would go toward mass-transit systems, while $80 billion is set aside for addressing Amtrak’s repair backlog.

The plan would also spend $25 billion on airports and $17 billion on ports, waterways and ferries.

Of the funds for surface transportation, $85 billion would go toward mass-transit systems. Photo: mike blake/Reuters

What about other types of infrastructure?

The White House proposal also includes major funding sources for other types of infrastructure. In the plan, $111 billion is geared toward water infrastructure, with the goal of replacing all of the lead pipes in the country, and $100 billion is aimed at expanding broadband internet access, particularly in rural communities.

How does the plan address climate change, electric vehicles and carbon emissions?

The White House and Democrats view the bill as their marquee effort to address climate change, and several provisions are aimed at reducing carbon emissions in the U.S.

The plan invests $174 billion in electric vehicles, offering tax incentives to consumers to buy the vehicles and proposing new grant and incentive programs to build 500,000 electrical-vehicle chargers by 2030. It also calls for shifting the federal fleet, including the Postal Service, to fully electric vehicles, and mandating that federal buildings only use clean energy sources.

The plan includes incentive programs to build 500,000 electrical-vehicle chargers by 2030. Photo: Steve Helber/Associated Press

For the electrical grid, the plan calls for $100 billion in new investments, incentivizing the construction of higher voltage capacity lines, and the expansion of tax credits for producing clean energy. The plan also proposes the creation of a national electricity standard that would move the U.S. to carbon-free electricity by 2035.

More than $200 billion in funding goes toward housing, with the goal of building and retrofitting more than one million homes and making them more energy efficient. The plan would also invest $40 billion in existing public housing.

What else does Biden’s plan spend money on?

The plan provides $400 billion for expanding access to care for elderly people and disabled people, calling for an expansion of Medicaid to cover long-term care services. More than $100 billion would fund workforce development programs, including a new program to train workers to find work in the clean energy, manufacturing and caregiving industries.

The White House also wants to send $100 billion toward upgrading and building new public schools.

What does the plan do for manufacturing and research and development?

With the proposal, the White House is asking Congress to provide $180 billion in new funding for research and development efforts. The administration wants to see money poured into research on semiconductors and advanced computing, along with ideas that spur job creation in rural areas and fight climate change.

For domestic manufacturing, the plan offers $300 billion to make investments seeking to mitigate the damage from future pandemics, bolster the production of semiconductors and support domestic manufacturers.

How does the plan address labor and workforce issues?

Many of the investments come with the stipulation that the workers on projects in the plan earn a high wage and receive labor protections. The White House also included in the plan legislation that would establish penalties on employers who violate the National Labor Relations Act and make it easier for gig workers to form unions.

Write to Andrew Duehren at andrew.duehren@wsj.com

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