What's in President Biden's American Jobs Plan?
On Wednesday, President Joe Biden unveiled the second part of his "Build Back Better" agenda – the American Jobs Plan – focused on upgrading and repairing America's physical infrastructure, investing in manufacturing, research and development, and expanding long-term health care services. President Biden is expected to unveil the third part of his agenda focused on investments in health care and child care next month.
The plan has approximately $2.65 trillion in new costs concentrated over the next eight years. Over the traditional 10-year budget window, we estimate the net increase in the deficit would be approximately $900 billion. The plan appears deficit-neutral over 15 years and it would reduce deficits over the long-term.
The following table breaks down the $2.65 trillion proposal, including $2.25 trillion in spending identified in the White House's fact sheet, as well as tax credits listed in the fact sheet without a cost that reportedly total $400 billion.
Provisions in the American Jobs Plan
| 10-Year Estimate | ||
|---|---|---|
| Invest in Transportation Infrastructure | $621 billion | |
| Invest in Electric Vehicles (EV), including consumer rebates to purchase EVs, grants and incentives to build 500,000 new charging stations, and replacing and electrifying federal vehicle fleet | $174 billion | |
| Modernize bridges, highways, roads, and main streets in critical need of repair | $115 billion | |
| Modernize public transit | $85 billion | |
| Improve passenger and freight rail service | $80 billion | |
| Improve infrastructure resilience by safeguarding critical infrastructure and services, defending vulnerable communities, and maximizing resilience of land and water resources | $50 billion | |
| Improve airports | $25 billion | |
| Establish dedicated fund for beneficial projects to regional or national economy | $25 billion | |
| Improve road safety and establish Safe Streets for All program | $20 billion | |
| Establish program to reconnect neighborhoods and ensure new projects increase opportunity | $20 billion | |
| Improve ports and waterways | $17 billion | |
| Other spending | $10 billion | |
| Invest in Domestic Manufacturing, Research & Development, and Job Training Initiatives | $590 billion | |
| Provide additional funding for domestic manufacturing, investing in capital access programs, supporting modernizing supply chains, and creating a new financing program to support debt and equity investments | $52 billion | |
| Provide additional funding to the National Science Foundation | $50 billion | |
| Establish Department of Commerce office to monitor domestic industrial capacity and to fund investments in the production of critical goods | $50 billion | |
| Provide funding for semiconductor manufacturing and research | $50 billion | |
| Provide funding for workforce development infrastructure and worker protection | $48 billion | |
| Support clean energy manufacturing with federal procurement | $46 billion | |
| Provide funding to upgrade research infrastructure in laboratories | $40 billion | |
| Establish Dislocated Workers Program and invest in sector-based training | $40 billion | |
| Provide additional funding for climate change research and development | $35 billion | |
| Provide funding for community-based small business incubators and innovation hubs | $31 billion | |
| Provide additional funding for research and development to spur innovation and job creation | $30 billion | |
| Protect against future pandemics through medical countermeasures | $30 billion | |
| Establish regional innovation hubs and Community Revitalization Fund | $20 billion | |
| Create centers of excellence that serve as research incubators for HBCUs and MSIs | $15 billion | |
| Provide additional funding to National Institute of Standards and Technology (NIST) | $14 billion | |
| Provide funding for workforce development in underserved communities | $12 billion | |
| Provide funding for research and development at HBCUs and other MSIs | $10 billion | |
| Provide funding for enforcement of workforce protections | $10 billion | |
| Establish Rural Partnership Program | $5 billion | |
| Other manufacturing investments | $2 billion | |
| Expand Home Care Services and Provide Additional Support for Care Workers | $400 billion | |
| Expand access to long-term, home and community-based care services under Medicaid and extend the Money Follows the Person program | $400 billion | |
| Clean Energy Tax Credits | ~$400 billion | |
| Improve Housing Stock, Modernize Schools and Child Care Facilities, and Upgrade VA Hospitals and Federal Buildings | $328 billion | |
| Build over a million energy efficient housing units and eliminate certain zoning & land use policies | $126 billion | |
| Provide direct grants to upgrade and build new public schools, with an additional $50 billion leveraged through bonds | $50 billion | |
| Provide funding to improve public housing system | $40 billion | |
| Establish Clean Energy & Sustainability Accelerator | $27 billion | |
| Establish Child Care Growth and Innovation Fund and provide tax credits to encourage businesses to build child care facilities | $25 billion | |
| Incentivize the building or rehabilitation of over 500,000 homes for low- and middle-income homebuyers with a Neighborhood Homes Investment Act (NHIA) tax credit | $20 billion | |
| Modernize VA hospitals and clinics | $18 billion | |
| Improve community college facilities and technology | $12 billion | |
| Modernize federal buildings through bipartisan Federal Capital Revolving Fund | $10 billion | |
| Invest in Broadband, Electrical Grid, and Clean Drinking Water | $311 billion | |
| Provide funding to build high-speed broadband, reduce the cost of broadband internet service, and promote transparency and competition | $100 billion | |
| Invest in power infrastructure | $100 billion | |
| Upgrade and modernize drinking water supplies through grants and low-cost flexible loans to states, Tribes, territories, and disadvantaged communities | $56 billion | |
| Replace all lead pipes and service lines | $45 billion | |
| Provide funding to monitor PFAS substances in drinking water and invest in rural small water systems & household well & wastewater systems | $10 billion | |
| Total | ~$2.65 trillion | |
Sources: White House, press reports
To offset the nearly $2.7 trillion of new proposals, the American Jobs Plan includes a number of tax increases on corporations. The plan would raise the corporate rate, raise the minimum tax rate on the foreign income of U.S. corporations, and impose a new corporate minimum tax, among other changes. We find these provisions would fully offset the bill's cost within the next 15 years, enough to pay for the new investments being proposed, albeit over a longer time period than the spending itself.
Our estimates are based on the Tax Policy Center's estimates of President Biden's campaign plan, as well as a Joint Committee on Taxation estimate of one proposal which was not included in Biden's campaign plan to repeal the deduction for Foreign-Derived Intangible Income (FDII). These estimates are very rough and rounded, as they are based on a campaign plan which may differ from what is currently being proposed. Estimates over a longer time-period are also less certain.
Tax Increases in the American Jobs Plan
| 10-Year Savings | 15-Year Savings | ||
|---|---|---|---|
| The Made in America Tax Plan | |||
| Raise corporate income tax rate from 21 to 28 percent | $850 billion | $1.3 trillion | |
| Strengthen the global minimum tax (GILTI) for U.S. multinational corporations | $500 billion | $750 billion | |
| Eliminate deduction for Foreign-Derived Intangible Income (FDII) | $250 billion | $400 billion | |
| Enact a 15 percent minimum tax on corporate "book" income | $100 billion | $200 billion | |
| Prevent U.S. corporations from inverting or claiming tax havens as their residence | $25 billion | $50 billion | |
| Eliminate tax preferences for fossil fuels | $25 billion | $30 billion | |
| Eliminate deductions for U.S. corporations related to offshoring jobs and create tax credits related to onshoring jobs | unknown | unknown | |
| Ramp up corporate tax enforcement | unknown | unknown | |
| Achieve global agreement on a strong corporate minimum tax through multilateral negotiations | unknown | unknown | |
| Total | ~$1.75 trillion | ~$2.75 trillion | |
Sources: Tax Policy Center, Joint Committee on Taxation, CRFB calculations
