Biden, Yellen Promote $2.3tn Infrastructure Package

19 May 2021 · 3rd Party Analysis

Biden, Yellen Promote $2.3tn Infrastructure Package

WRITTEN BY ThorFX

In Summary

  • President Biden seeks support for electric-vehicle funding in a Ford Motor Co. facility
  • Treasury Secretary Janet Yellen pushes higher taxes in a speech to the US Chamber of Commerce

President Joe Biden and Treasury Secretary Janet Yellen renewed their push for the approval of the proposed $2.3tn infrastructure package yesterday. The plan, proposed by the White House, is still met with disapproval by Republican lawmakers, who frown upon its price tag and some of the included measures.

Mr. Biden, however, alongside Treasury Secretary Janet Yellen, remains committed to seeking bipartisan backing, saying the infrastructure plan and the increase of taxes are vital for the ability of the US to compete globally.

On Tuesday, the President visited the Ford Motor Co. Rouge Electric Vehicle Center and made a pitch for his $2.3tn spending package. The American Jobs Plan, as the package is called, includes funding for electric vehicles as a way to help make the transition toward a sustainable and green future.

“The future of the auto industry is electric. There’s no turning back,” Mr. Biden said at Ford’s electric vehicle plant in Dearborn. “The real question is whether we’ll lead or we’ll fall behind in the race to the future – whether we’ll build these cars and the batteries that go in them here in the United States or rely on other countries.”

Substantial Infrastructure Package in the Pipeline

The administration’s infrastructure package has an electric vehicle component which includes $174bn for electric vehicle expansion. About $15bn are going to be used to build 500,000 EV charging stations across the US by 2030. Another $25bn are set aside to electrify city buses, and $20bn would go to convert 20% of the country’s school buses to electric.

Some Republican leaders have said the package includes too much funding focused on the electric-vehicle industry. Instead, they want Mr. Biden to give priority to fixing roads, bridges, and other public infrastructure. Democrats and Republicans remain at odds over what should be included in a joint infrastructure package.

Senate Republicans have proposed a $568bn counteroffer that would focus predominantly on roads, bridges, ports, airports and make general physical infrastructure improvements. The GOP plan leaves out more ambitious and forward-looking investments such as electric vehicles, home caregiving, and innovation toward tackling climate change.

Mr. Biden said he has rejected the counterproposal and expects Republicans to offer another one by Wednesday. White House representatives said there was “encouraging” progress in the negotiations.

Meanwhile, Treasury Secretary Janet Yellen yesterday sought backing from business leaders and urged them to accept paying higher taxes to support the President’s infrastructure spending. In a speech to the US Chamber of Commerce on Tuesday, Ms. Yellen reiterated the White House administration intends to raise taxes, including the corporate tax rate to 28% from 21%.

“We are confident that the investments and tax proposals in the jobs plan, taken as a package, will enhance the net profitability of our corporations and improve their global competitiveness,” Ms. Yellen said.

“We believe the corporate sector can contribute to this effort by bearing its fair share,” she continued. “At the same time, we want to eliminate incentives that reward corporations for moving their operations overseas and shifting profits to low-tax countries.”

Administration officials have been working with business leaders from every area to convince them to back the plan, saying the spending will benefit US companies both on US soil and on the global scale. On the issue of higher taxes, Mr. Biden has said he is open to a compromise. “We believe we can find a bipartisan deal,” Mr. Biden said. “But doing nothing is not an option.”

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