President Biden’s “Build Bank Better Plan” for infrastructure has morphed into “The American Jobs Plan,” a fact sheet for which was released on March 31, 2021.
Many of the details of The American Jobs Plan remain to be developed, including funding mechanisms and the role of the private sector. The Plan contains a section entitled “The Made in America Tax Plan” that provides an outline as to how the Plan is proposed to be financed, including (i) increasing the corporate tax rate from 21% to 28%, (ii) modifying the global minimum tax for U.S. multinational corporations, (iii) strengthening provisions making it more difficult for corporations to avoid U.S. taxes by claiming to be a foreign company, (iv) modifying provisions that allow expense deductions from off-shoring jobs and that provide incentives for shifting assets abroad, (v) enacting a minimum tax on the book income of large corporations, (vi) eliminating special preferences for the fossil fuel industry and restoring payments to the Superfund Trust Fund, and (vii) enhancing Internal Revenue Service enforcement. Although not mentioned, but expected by some sources, changes also include an increase in capital gains taxes for affluent Americans and the re-imposition of the individual tax rate of 39.6% for individuals earning more than $400,000 per year.
Battle lines are already forming and the enactment of legislation creating and funding The American Jobs Plan is far from certain. Key elements of the Plan are outlined below.
1. TRANSPORTATION INFRASTRUCTURE AND RESILIENCE – $621 billion investment in transportation infrastructure and in programs to promote resilience, including:
• Roads and Bridges – $115 billion to modernize bridges, highways, roads and main streets that are in most critical need of repair, including funding to improve air quality, limit greenhouse gas and reduce congestion and $20 billion for road safety.
• Public Transit – $85 billon to modernize existing transit and to help agencies expand systems to meet rider demand.
• Passenger and Freight Rail Service – $80 billion to address Amtrak’s repair backlog, modernize the Northeast corridor, improve existing corridors and enhance grant and loan programs that support passenger and freight rail safety, efficiency and electrification.
• Electric Vehicles – $174 billion investment in the electric vehicle market with funds for auto makers to spur domestic supply chains, retool factories and to make batteries and electric vehicles, including point-of-sale rebates and tax incentives to consumers to facilitate the acquisition of electric vehicles, funds to build a national network of 500,000 electric vehicle chargers and funds to replace 50,000 diesel transit vehicles and at least 20% of the school bus fleet.
• Ports, Waterways and Airports – $25 billion in funding for airport improvements, including upgrades to existing assets, terminal road renovations and multi-modal connections and $17 billion investment in inland waterways, coastal ports, land ports of entry and ferries.
• Redress of Historic Inequities – $20 billion for a new program that will reconnect neighborhoods cut off by historic investments and to help ensure new projects increase opportunity, advance racial equity and environmental justice and promote affordable access and $25 billion for a fund to support “ambitious projects” that will have tangible benefits to the regional or national economy but are too large or complex for existing funding programs.
• Resilience – $50 billion in dedicated investments to improve infrastructure resilience to address problems caused by wildfires, coastal or sea level rise, hurricanes and other climate matters.
2. DRINKING WATER INFRASTRUCTURE, RENEWED ELECTRIC GRID AND HIGH SPEED BROADBAND – Investments in the delivery of clean drinking water, electricity and broadband services, including
• Drinking Water – Programs to eliminate all lead pipes and service lines in the nation and for other water system upgrades and improvements, including:
$45 billion investment in the Environmental Protection Agency’s Drinking Water State Revolving Fund and the Water Infrastructure Improvements for the Nation Act,
$56 billion in grants and loans to states, Indian Tribes, territories and disadvantaged communities, and
$10 billion for small water systems and household wells and wastewater systems.
• Digital Infrastructure – $100 billion for broadband infrastructure, with priority for networks owned, operated or affiliated with local governments, non-profits and co-operatives and including a set-aside for infrastructure on tribal lands.
• Power Infrastructure – $100 billion investment with the goal of creating a more resilient electric grid, lower energy bills and achieving 100% carbon free electricity by 2035, including:
the creation of a targeted investment tax credit that incentivizes the buildout of at least 20 gigawatts of high voltage capacity power lines,
the extension of direct pay investment tax credit and production tax credit for clean energy generation and storage,
$16 billion for plugging oil and gas wells and restoring abandoned coal hard rock and uranium mines,
$5 billion investment in the remediation and redevelopment of brownfield and Superfund sites, and
activities to promote 15 decarbonized hydrogen demonstration projects in distressed communities, 10 pioneer facilities that demonstrate carbon capture retrofits for large steel, cement and chemical production facilities, and the creation of a Civilian Climate Corp.
3. DEVELOPMENT, PRESERVATION AND RETROFIT OF HOMES AND BUILDINGS; MODERNIZE SCHOOLS, COLLEGES AND EARLY LEARNING CENTERS; UPGRADE OF VETERAN’S HOSPITALS AND FEDERAL BUILDINGS –
• Development, Preservation and Retrofit of Homes and Buildings -$213 billion to produce, preserve and retrofit more than 2 million affordable homes, including:
Targeted tax credits, funding, grants and other project based rental assistance to support more than 1 million affordable housing units,
$20 billion in Neighborhood Homes Investment Act tax credits to support the development of more than 500,000 homes for low and middle income homebuyers,
$40 billion to improve public housing capital needs, and
$27 billion to establish a “Clean Energy and Sustainability Accelerator” to promote private investment in distributed energy resources, retrofits of buildings and clean transportation, with a focus on communities not yet benefitting from clean energy investments.
• Schools, Community Colleges and Early Learing Facilities –
$100 billion to upgrade and build new public schools, including $50 billion in grants and $50 billion in bonds,
$12 billion in community college facilities and technology, and
$25 billion to help upgrade child care facilities and to increase the supply of child care in areas of need.
• Veterans Affairs Hospitals and Federal Buildings –
$18 billion for the modernization of Veterans Affairs hospitals and clinics, and
$10 billion in the modernization, sustainability and resilience of federal buildings.
4. INVESTMENT IN CARE ECONOMY – $400 billion investment for the expansion of access to affordable home or community based care for aging relatives and people with disabilities, including the expansion under Medicaid of access to home and community based services. Objectives include increasing job opportunities for and the pay of care workers.
5. INVESTMENT IN RESEARCH & DEVELOPMENT, MANUFACTURING AMD SMALL BUSINESS JOB TRAINING –
• Research and Development (R&D) – $180 billion public investment in research and development programs allocated across a number of federal agencies, with funds being reserved for Historically Black Colleges and Universities (HCBUs), including:
$50 billion to the National Science Foundation to focus on fields such as semiconductors and advanced computing, communications technology, energy technology and biotechnology,
$30 billion for R&D that spurs innovation and job creation, including in rural areas,
$40 billion to upgrade research infrastructure in laboratories,
$35 billion for technology to address climate issues and position America in clean energy technology and clean energy jobs,
$15 billion in demonstration projects for climate R&D priorities, and
$15 billion in creating up to 200 centers of excellence that serve research incubators at HCBUs and Minority Serving Institutions.
• American Manufacturers and Small Businesses – $300 billion investment for programs to support manufacturing and small business, including:
$50 billon for semiconductor manufacturing and research,
$30 billion for medical countermeasures manufacturing, research and development and biopreparedness and biosecurity,
$46 billion investment to help achieve net zero emissions by 2050 to support electric vehicles, charging ports and electric heat pumps for residential heating and commercial buildings,
$20 billion for a Community Revitalization Fund and at least 10 regional innovation hubs intended to leverage private investment in fuel technology development and the linkage of urban and rural economies beyond current high growth centers,
$14 billion investment in National Institute of Standards and Technology to advance technology and competitiveness,
$52 billion investment in domestic manufacturers to support debt and equity investments to strengthen the resilience of supply chains,
$31 billion in programs that give small business access to credit venture capital and R&D funds, and
$5 billion to establish a new Rural Partnership Program to help rural regions including tribal nations for inclusive community and economic development.
• Workforce Development – $100 billion investment to promote workforce development programs, targeted at underserved groups including:
$40 billion investment in a new dislocated worker’s program and sector-based training,
$12 billion investment to target workers facing challenges such as job training for formally incarcerated persons, and
$48 billion in workforce development infrastructure and worker protection including such as greater apprenticeships and literacy programs.
6. CREATION OF JOBS THAT PAY PREVAILING WAGES IN SAFE AND HEALTHY WORKPLACES WHILE ENSURING WORKERS HAVE A FREE AND FAIR CHOICE TO ORGANIZE, JOIN A UNION AND BARGAIN COLLECTIVELY – Investment in programs that empower workers and support labor standards with a commitment to increase jobs through Buy America and Ship American provisions, including $10 billion investment in program enforcement to support workforce proposals, together with increased penalties when employers violate workplace safety and health rules.