On Wednesday, President Joe Biden introduced the American Jobs Plan that seeks to revitalize the American economy with humanitarian improvements, job creation and innovation, and an injection for transportation. In the spending plan for transportation, $621 billion is being committed to road and infrastructure improvements and electrification initiatives that the White House sees as America’s future.
Of the $621 billion earmarked for transportation, the American Jobs Plan designates around $174 billion on electrification. Another $115 billion is slated for repairing bridges and roads, while air and road transit systems would see $165 billion for repairs and upgrades.
Electrification gets major investment in plan
The statement released by the White House on Wednesday indicates that the “US market share of plug-in electric vehicle (EV) sales is only one-third the size of the Chinese EV market”, and President Biden’s administration appears committed to pushing electrified transportation forward, starting with government fleets.
It’s proposed that 50,000 of the diesel vehicles in use in the transit department will be replaced with electric vehicles, and “electrify at least 20 percent of our yellow school bus fleet through a new Clean Buses for Kids Program at the Environmental Protection Agency”.
As well, the plan will provide rebates and EV incentives to consumers who purchase models made in the US, encouraging higher adoption rates for electrified models, however, the monetary levels for those incentives are not spelled out in the spending plan. Automakers will also be supported from material procurement and battery development through to retail.
An aggressive component of the electrification plan is to establish a network of 500,000 EV chargers nationally by 2030 by providing grants and incentives for “state and local governments and the private sector”. Of course, a struggling electric grid will need to be revitalized to power those stations, and $100 billion of spending is being committed to revamp power infrastructure elsewhere in the American Jobs Plan.
Roads, bridges, and railways repaired
To stem the growing tide of deteriorating transportation infrastructure, Biden’s administration aims to inject $115 billion to fix bridges and roads, prioritized based on condition and impact on the economy. The overwhelming undertaking encompasses 20,000 miles of roads, and more than 10,000 bridges.
In the plan, President Biden acknowledges the effect that past infrastructure projects have had in cutting off neighborhoods that exacerbate racial inequities. A component of the plan seeks to reconnect those neighborhoods and help transform ailing communities with better, more affordable access.
How the American Jobs Plan will be funded
The question that arises with major spending plans like this is always, “Where will the money come from?” Reversing Trump’s tax cuts to major corporations is the primary target for the Biden administration, increasing the corporate tax rate to 28% and increasing “the minimal tax on US multinational corporations to 21%”. Other tax havens and loopholes will be closed. The White House reports that of Fortune 500 companies, 91 did not pay a single dollar in federal corporate taxes in US income in 2018, a trend they seek to reverse.
With the tax increases and reforms, it’s expected that this spending will be paid off in 15 years, then will begin to pay down deficits subsequently.
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