President Joe Biden will unveil a more than $2 trillion infrastructure package on Wednesday as his administration shifts its focus to bolstering the post-pandemic economy.
The plan Biden will outline Wednesday will include roughly $2 trillion in spending over eight years and would raise the corporate tax rate to 28% to fund it, an administration official told reporters Tuesday night, speaking on condition of anonymity in advance of the announcement.
The White House said the tax hike, combined with measures designed to stop offshoring of profits, would fund the infrastructure plan within 15 years.
The proposal would:
- Put $621 billion into transportation infrastructure such as bridges, roads, public transit, ports, airports and electric vehicle development
- Direct $400 billion to care for elderly and disabled Americans
- Inject more than $300 billion into improving drinking-water infrastructure, expanding broadband access and upgrading electric grids
- Put more than $300 billion into building and retrofitting affordable housing, along with constructing and upgrading schools
- Invest $580 billion in American manufacturing, research and development and job training efforts
The announcement will kick off Biden’s second major initiative after passage of a $1.9 trillion coronavirus relief plan earlier this month. In the new move, the administration aims to approve a first proposal designed to create jobs, revamp U.S. infrastructure and fight climate change before it turns toward a second plan to improve education and expand paid leave and health-care coverage.
Through the plan announced Wednesday, the White House hopes to show it can “revitalize our national imagination and put millions of Americans to work right now,” the administration official said.
The White House plans to fund the spending by raising the corporate tax rate to 28%. Republicans slashed the levy to 21% from 35% as part of their 2017 tax law.
The administration also wants to boost the global minimum tax for multinational corporations and ensure they pay at least 21% in taxes in any country. The White House also aims to discourage firms from listing tax havens as their address and writing off expenses related to offshoring, among other reforms.
Biden hopes the package will create manufacturing jobs and rescue failing American infrastructure as the country tries to emerge from the shadow of Covid-19. He and congressional Democrats also plan to combat climate change and start a transition to cleaner energy sources.
The president was set to announce his plans in Pittsburgh, a city where organized labor has a strong presence and the economy has undergone a shift from traditional manufacturing and mining to health care and technology. Biden, who has pledged to create union jobs as part of the infrastructure plan, launched his presidential campaign at a Pittsburgh union hall in 2019.
While Democrats narrowly control both chambers of Congress, the party faces challenges in passing the infrastructure plan. The GOP broadly supports efforts to rebuild roads, bridges and airports and expand broadband access, but Republicans oppose tax hikes as part of the process.
“We’re hearing the next few months might bring a so-called infrastructure proposal that may actually be a Trojan horse for massive tax hikes and other job-killing left-wing policies,” Senate Minority Leader Mitch McConnell, R-Ky., said earlier this month.
Biden has said he hopes to win Republican support for an infrastructure bill. If Democrats cannot get 10 GOP senators on board, they will have to try to pass the bill through budget reconciliation, which would not require any Republicans to back the plan in a chamber split 50-50 by party.
They would also have to consider whether to package the physical infrastructure plans with other recovery policies including universal pre-K and expanded paid leave. Republicans likely would not back more spending to boost the social safety net, especially if Democrats move to hike taxes on the wealthy to fund programs.
Democrats are looking to pass the package this summer. House Speaker Nancy Pelosi told the Democratic caucus in the chamber that she would like to have it passed by July 4, according to a source familiar with the matter. The source, who declined to be named because the remark was made in private, added that it was not intended as a deadline.
The administration official did not say whether Biden would seek to pass the plan with bipartisan support.
“We will begin and will already have begun to do extensive outreach to our counterparts in Congress,” the official said.
Asked Monday about how the bill could pass, White House press secretary Jen Psaki said Biden would “leave the mechanics of bill passing to [Senate Majority] Leader [Chuck] Schumer and other leaders in Congress.”
As of now, Democrats will have two more shots at budget reconciliation before the 2022 midterms. Schumer, D-N.Y., hopes to persuade the chamber’s parliamentarian 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 and Ylan Mui contributed to this report