Biden Proposes Part Two of $4 Trillion Dollar American Jobs and Families Plan

Chloe Duncan-Wald, Contributing Writer

On March 31st, President Biden unveiled the first part of the American Jobs Plan: a broad $4 trillion dollar investment proposal into American infrastructure, jobs, social programs, and clean energy. In his announcement speech, Biden called this plan a “once-in-a-generation investment in America.” The following month, on April 28th, he announced the second part of the ambitious plan: the American Families Plan. According to a New York Times breakdown of the bill, the first part focuses on more traditional infrastructure such as buildings, transportation, jobs, and innovation, while the second part focuses on human infrastructure, including tax credits, child and family support, and education. 

Those in favor of the American Jobs plan cite the C- grade that the American Society of Civil Engineers (ASCE) recently gave on the country’s infrastructure. Upon Biden’s announcement, articles published in support of such a large bill outline major, dangerous failures in America’s infrastructure that require vast spending to address: the deteriorating tunnels under the Hudson River, earthquake-vulnerable elementary schools in Puerto Rico, and the recent water crisis in Mississippi reminiscent of the infamous Flint Michigan water crisis, where pipes also posed an issue. Parent advocacy groups have voiced support for the second part of the plan. The co-director of the advocacy group ParentsTogetherAction, Justin Ruben, embraces the American Families plan stating that it is a “bold proposal to support American families and help eradicate child poverty in the United States. The expanded fully-refundable child tax credit, delivered monthly, and to the parents who need it most […] are critical steps in strengthening the social safety net and helping American families thrive.” 

Despite the argued benefits, the American Jobs and Families Plan is an immense undertaking. If passed as proposed, the plan would not only be the biggest investment in a single generation—it would be the most significant investment of its kind in American history. The official White House brief highlights this: “[The plan] will invest in America in a way we have not invested since we built the interstate highways and won the Space Race.” This is not an overstatement. Tallying the cost of the Space Race and the interstate highway system (adjusted for inflation) totals $618 billion. The first part of the proposal alone, $2.3 trillion, is nearly four times this number. 

If passed as proposed, the plan would not only be the biggest investment in a single generation—it would be the most significant investment of its kind in American history.”

Some inclusions in the American Jobs plan depart from the traditional definition of infrastructure, such as electric vehicle incentives, expansion of eldery care, clean energy grid expansion, and free community college tuition. This irregularity, along with the unprecedented spending, unclear feasibility, and lack of specific policy details, has caused critics across the aisle to voice a myriad of concerns. Senate Minority Leader, Republican Mitch McConnell, focused his criticism on the non-traditional nature of the proposal, stating: “This plan is not about rebuilding America’s backbone. Less than 6% of this massive proposal goes to roads and bridges. It would spend more money just on electric cars than on America’s roads, bridges, ports, airports, and waterways combined.” This position is consistent with the counter-plan subsequently released by several Republican Senators on April 22nd, which solely addresses traditional infrastructure—a fraction of Biden’s bill. This $568 billion dollar plan mainly targets roads and bridges and splits the rest of the budget up among eight other categories. In contrast, Biden’s bill has over 35 categories with comparable spending allotments. Still, Democratic Congresswoman Alexandria Ocasio-Cortez tweeted that Biden’s infrastructure bill “is not nearly enough. The important context here is that it’s $2.25T spread out over 10 years”. 

Due to the breadth of the bill, conservatives have other fiscal concerns, particularly Biden’s plan to pay for the bill by raising corporate taxes from 21% to 28% over the next 15 years. In reaction to the American Families Plan, the Republican House Judiciary Committee tweeted “Hey, @JoeBiden. How are you going to pay for all of this?” Economists like Larry Summers, the Former Director of the US National Economic Council, added that such a rise in taxes could cause inflation, the opposite of what America’s economy needs after the most significant economic crash in well over a decade. Yet, Biden’s team still defends this prospective raise, stating that the “The 2017 tax law (the Trump-signed bill that cut corporate taxes from 28% to 21% in the first place) only made an unfair system worse. A recent independent study found that 91 Fortune 500 companies paid $0 in federal corporate taxes on U.S. income in 2018 […] The (current) President’s tax plan will ensure that corporations pay their fair share of taxes.” 

Controversy aside, pundits predict that the bill could pass much sooner than expected. Senate Majority Leader, Democrat Chuck Schumer, is leading the effort to fast-track the vote, vying to use the budget reconciliation process again this year. Budget reconciliation exists to expedite the passage of the federal budget so necessary changes to spending areas such as Social Security, transportation, and defense can be made in a timely fashion. Per the nature of an annual budget, this is typically done only once a year. This method is appealing since it bypasses the filibuster, which would require a 60-vote supermajority in the Senate, instead merely requiring a simple majority (51 votes). In the past, budget reconciliation has served as a vehicle to enact consequential and controversial bills without the need for supermajority approval, like Biden’s recent $1.9 trillion dollar American Rescue Plan that addresses the pandemic. This path, however, does not preclude a likely reduction of the bill’s budget or scope. Dissenters like the Republican Senators who wrote the counter-proposal and the three moderate House Democrats threatening to halt the process to negotiate the corporate tax increase make the fate of the American Jobs and Families Plan unclear. Given such potent support and opposition, time will be the best judge.