American Jobs Plan: V2, a compromise

This White House link takes you to the Fact Sheet for the bipartisan compromise of the American Jobs Plan. There you will see that this plan is still enormous, still containing two-thirds of the original resources dedicated to the “clean transportation infrastructure, clean water infrastructure, universal broadband infrastructure, clean power infrastructure, remediation of legacy pollution, and resilience to the changing climate”.

The framework lists 10 areas of concentration:

  • modernize and expand transit and rail networks across the country; the largest public investment in railroads since the creation of Amtrak;
  • repair and rebuild roads and bridges; the largest public investment in bridges since the construction of the interstate highway system;
  • creation of a national network of Electric Vehicle (EV) charging stations with a goal of 500,000;
  • electrification of thousands of school and transit buses;
  • replacement of thousands of miles of lead service and water supply lines;
  • connection of every American household to reliable high-speed internet; a scope not seen since the Rural Electrification Project 100 years ago;
  • upgrading the American power infrastructure by creating a Grid Authority bringing renewable energy sources online and creating new efficiencies in power transmission;
  • creating an Infrastructure Finance Authority leveraging billions of dollars for investment in clean energy projects;
  • addressing legacy pollution by investing billions of dollars in cleanup efforts that will, in turn employ millions in high-pay union jobs;
  • preparation of much of our infrastructure for the effects of climate change, extreme weather and protection from cyber attacks.

The V2 Plan details the spending in two categories; Transportation and Other Infrastructure. Transportation budgets $579B in 10 areas; Other budgets $266B in 6 areas. Financing the ambitious plan comes from 13 areas beginning with “reducing the IRS tax gap” and ending with “macro-economic impact of infrastructure spending”. There is also public-private partnerships, private activity bonds, a repurposing of unused unemployment compensation of the Rescue Plan, and many others. Noteworthy absent from the revenue sources is the increase in the corporate tax rate that was in V1. The macro-economic impact revenue source is interesting in that it is indirect but of significant possibility. This refers to the efficiencies of commerce that is created with new infrastructure. It anticipates an increase in the Gross National Product; i.e. the value of all goods and services sold in the country. Production of enormous additional goods and services adds wealth to the nation that, in part become government revenue It is to the Biden Administration’s credit that this compromise was created. It is now up to the Republican leadership in Congress to see it through.