Here's what's in Biden's counteroffer on infrastructure

·10 min read

Nearly two months after President Joe Biden laid out his massive plan to upgrade the nation’s infrastructure, White House officials presented a slimmed-down version as a counteroffer to Republican lawmakers who are seeking a much smaller program.  

The new plan would reduce the size of Biden’s initial proposal, known as the American Jobs Plan, from $2.25 trillion to $1.7 trillion and make four key concessions, according to the counteroffer document obtained by CNN. 

  • Biden is prepared to take off the table the manufacturing, research and development and innovation elements and pursue them in separate legislative processes.

  • Biden will accept the GOP proposed funding level of $65 billion in broadband investments. His plan called for spending $100 billion on broadband, but the White House still believes they can achieve universal access to affordable high-speed internet at the lower funding level, though it will take longer. 

  • Biden is willing to reduce his request for $159 billion in funding above current levels in roads, bridges, and major infrastructure projects to just $120 billion in new investment. The Senate Republican framework called for $48 billion. 

  • The White House says it is willing to find common ground on a financing facility with a range of infrastructure projects eligible, including energy infrastructure. The Biden plan included $27 billion for a facility that would leverage private capital into energy infrastructure projects and another $10 billion for a facility that would offer debt and equity capital to small and medium-sized manufacturers. 

However, the White House also pointed to nine other areas that they consider important but that the GOP lawmakers either left out or funded at lower levels.

These include the $400 billion measure to bolster caregiving for aging and disabled Americans and improve the wages of home health workers, which is the second largest piece of Biden’s plan, as well as investments in the remediation of brownfields and other environmental sites, the construction and modernization of veterans’ hospitals, the enhancement of workforce development programs, the expansion of electric vehicle infrastructure, the elimination of lead pipes and the strengthening the resilience of transportation and other physical infrastructure to better extreme weather, among others.

Also, the President opposes funding the proposal through an increase on gas taxes and user fees, which the White House says will increase the financial burden on working Americans, the counteroffer stressed.

Biden’s infrastructure plan is the first of a two-part proposal to help the nation’s economy recover from the coronavirus pandemic. Biden unveiled the second part, dubbed the American Families Plan, last month. It calls for spending $1.8 trillion to invest in things like education, child care and paid family leave.

The President plans to pay for the infrastructure portion by raising corporate taxes – a core campaign promise the administration says would raise more than $2 trillion over the next 15 years. The American Families Plan would be paid for by raising taxes on the wealthy. 

Here’s what was included in the original Biden infrastructure proposal: 

Transportation: $621 billion

Funding improvements to roads, bridges, railways and other infrastructure has been a central piece of Biden’s recovery plans. He has said that it will create “really good-paying jobs” and help the nation compete better.

Biden would spend $621 billion on roads, bridges, public transit, rail, ports, waterways, airports and electric vehicles in service of improving air quality, reducing congestion and limiting greenhouse gas emissions. But this is one of the funding areas Biden is willing to reduce.

His proposal calls for allocating $115 billion to modernize 20,000 miles of highways, roads and main streets, and $20 billion to improve road safety for all users. It would fix the “most economically significant large bridges” and repair the worst 10,000 smaller bridges.

Biden would also invest $85 billion to modernize existing transit and help agencies expand their systems to meet demand. This would double federal funding for public transit.

Another $80 billion would go to address Amtrak’s repair backlog and modernize the Northeast Corridor line between Boston and Washington DC – the line Biden relied on for decades to get home to Delaware – as well as to connect more cities.

Also, the President would funnel $25 billion to airports and $17 billion to inland waterways, ports and ferries.

Biden is also proposing to accelerate the shift to electric vehicles with a $174 billion investment in the electric vehicle market. It includes giving consumers rebates and tax incentives to buy American-made electric vehicles and establishing grant and incentive programs to build a national network of 500,000 charging stations by 2030. It would also replace 50,000 diesel transit vehicles and electrify at least 20% of yellow school buses.

Home care services and workforce: $400 billion

Biden would provide $400 billion to bolster caregiving for aging and disabled Americans.

His plan would expand access to long-term care services under Medicaid, eliminating the wait list for hundreds of thousands of people. It would provide more opportunity for people to receive care at home through community-based services or from family members.

It would also improve the wages of home health workers, who now make approximately $12 an hour. One in six live in poverty, the administration says. It would put in place an infrastructure to give caregiving workers the opportunity to join a union.

During his presidential campaign, Biden said he would devote $450 billion to allow more older Americans and their families to receive care at home or in their communities, as opposed to nursing homes and other institutions.

Manufacturing: $300 billion

Biden wants to put $300 billion toward boosting manufacturing — though this is another of the concessions he’s ready to make. 

Under his plan, $50 billion of the money would be invested in semiconductor manufacturing and another $30 billion would go towards medical manufacturing to help shore up the nation’s ability to respond to a future outbreak.

Some of the funds would be carved out for manufacturers that focus on clean energy, rural communities, and programs that give small businesses access to credit. About $20 billion would be used to create regional innovation hubs that would support community-led projects.

Biden is asking Congress to include $46 billion that would be used to make federal purchases of things like electric cars, charging ports, and electric heat pumps for housing and commercial buildings that would boost the clean energy industry.

Biden has already signed an executive order aimed at boosting American manufacturing. It set in motion a process that would change the rules regarding federal spending on American-made goods, equipment, vehicles and materials for infrastructure projects – with a 180-day deadline that comes up in July.

Housing: $213 billion

The plan would invest $213 billion toward building, renovating and retrofitting more than two million homes and housing units.

Biden is calling on Congress to produce, preserve and retrofit more than a million affordable and energy efficient housing units. The plan would also build and rehabilitate more than 500,000 homes for low- and middle-income homebuyers.

The proposal would eliminate exclusionary zoning laws, which the White House says inflates housing and construction costs. Biden is calling on Congress to enact a new grant program that awards flexible funding to jurisdictions that take steps to eliminate barriers to creating affordable housing.

Homes would be upgraded though block grant programs, extending and expanding home and commercial efficiency tax credits and through the Weatherization Assistance Program.

Research and development: $180 billion

This is another investment Biden is prepared to take off the table. His original plan called on Congress to invest $180 billion to advance US leadership in critical technologies, upgrade the US’s research infrastructure and establish the US as a leader in climate science, innovation and research and development.

His plan would also aim to eliminate racial and gender inequities in research and development and science, technology, engineering and math. Biden is calling on Congress to make research and development investments in historically Black colleges and other minority-serving institutions.

Water: $111 billion

Biden’s plan allocates $111 billion to rebuild the country’s water infrastructure.

It would replace all of the nation’s lead pipes and service lines in order to improve the health of American children and communities of color. The White House says replacing the pipes would reduce lead exposure in 400,000 schools and childcare facilities.

The proposal would upgrade the country’s drinking water, wastewater and stormwater systems, tackle new contaminants and support clean water infrastructure in rural parts of the country.

Schools: $100 billion

Biden calls for $100 billion to build new public schools and upgrade existing buildings with better ventilation systems, updated technology labs, and improved school kitchens that can prepare more nutritious meals.

Another $12 billion would go to states to use towards infrastructure needs at community colleges.

The President is calling for an additional $25 billion to help upgrade child care facilities and increase the supply of child care in areas that need it the most. The plan also calls for expand a tax credit to encourage employers to build care facilities at places of work.

Digital infrastructure: $100 billion

Biden wants to invest $100 billion in order to give every American access to affordable, reliable and high-speed broadband – but is willing to reduce this ask to $65 billion. 

The proposal would build a high-speed broadband infrastructure in order to reach 100% coverage across the nation. The plan would aim to promote transparency and competition among internet providers.

Biden says he is committed to working with Congress to reduce the cost of broadband internet and increase its adoption in both rural and urban areas.

Workforce development: $100 billion

The President would allocate $100 billion to workforce development – helping dislocated workers, assisting underserved groups and getting students on career paths before they graduate high school.

It would provide $40 billion to retrain dislocated workers in high-demand sectors, such as clean energy, manufacturing and caregiving.

It would invest $12 billion in programs to train the formerly incarcerated, create a new subsidized jobs program, eliminate sub-minimum wage provisions and support community violence prevention programs.

The proposal would also funnel $48 billion into apprenticeships, career pathway programs for middle and high school students and job training programs at community colleges.

Veterans’ hospitals and federal buildings: $18 billion

The plan would provide $18 billion to modernize the Veterans Affairs’ hospitals, which are on average more than 40 years older than a private sector hospital, according to the White House.

It also calls for $10 billion to modernize federal buildings.

Here’s how Biden plans to pay for it:

Corporate tax hike: Biden would raise the corporate income tax rate to 28%, up from 21%. The rate had been as high as 35% before former President Donald Trump and congressional Republicans cut taxes in 2017.

Global minimum tax: The proposal would increase the minimum tax on US corporations to 21% and calculate it on a country-by-country basis to deter companies from sheltering profits in international tax havens.

Tax on book income: The President would levy a 15% minimum tax on the income the largest corporations report to investors, known as book income, as opposed to the income reported to the Internal Revenue Service.

Corporate inversions: Biden would make it harder for US companies to acquire or merge with a foreign business to avoid paying US taxes by claiming to be a foreign company. And he wants to encourage other countries to adopt strong minimum taxes on corporations, including by denying certain deductions to foreign companies based in countries without such a tax.

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