Biden kicks off effort to reshape US economy

1 April, 2021 12:00 AM printer

NEW YORK: President Joe Biden on Wednesday will call for a dramatic and more permanent shift in the direction of the U.S. economy with a roughly US$2 trillion package to invest in traditional projects like roads and bridges alongside tackling climate change and boosting human services like elder care.

He also aims to put corporate America on the hook for the tab, which is expected to grow to a combined US$4 trillion once he rolls out the second part of his economic plan in April.

Coupled with his recently enacted US$1.9 trillion coronavirus relief package, Biden’s infrastructure initiative would give the federal government a bigger role in the U.S. economy than it has had in generations, accounting for 20per cent or more of annual output.

The effort, to be announced on Wednesday at an event in Pittsburgh, sets the stage for the next partisan clash in Congress where members largely agree that capital investments are needed but are divided on the total size and inclusion of programs traditionally seen as social services. Just how to pay for them will be a fractious issue in its own right.

Biden for now is ignoring a campaign promise and sparing wealthy Americans from any tax increase. The plan would increase the corporate tax rate to 28per cent from 21per cent and change the tax code to close loopholes that allow companies to move profits overseas, according to a senior administration official.

It does not include expected increases in the top marginal tax rate or to the capital gains tax. The plan would spread the cost for projects over an eight-year period and aims to pay for it all over 15 years, the senior administration official said.

The plan also includes US$621 billion to rebuild the nation’s infrastructure, such as roads, bridges, highways and ports, including a historic US$174 billion investment in the electric vehicle market that sets a goal of a nationwide charging network by 2030.

Congress will also be asked to put US$400 billion toward expanding access to affordable home or community-based care for aging Americans and people with disabilities.

There is US$213 billion provided to build and retrofit affordable and sustainable homes along with hundreds of billions to support U.S. manufacturing, bolster the nation’s electric grid, enact nationwide high-speed broadband and revamp the nation’s water systems to ensure clean drinking water.

Biden is moving forward with the massive job and infrastructure effort as he navigates an ambitious time line to provide enough COVID vaccines for all adults by the end of May and the deployment of pandemic relief.

The White House is also dealing with a rise in the number of migrants at the southern border, the fallout from back-to-back mass shootings and a looming showdown over the Senate filibuster.


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