Committee for a Responsible Federal Budget
Concept_Digging

What's in President Biden's American Jobs Plan?

Apr 2, 2021 | Other Spending

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