Here’s a roundup of some initial reaction to and analysis of Biden’s $2.25 trillion plan.
Critics find plenty to dislike: “While there’s widespread support across the political aisle to upgrade the nation’s infrastructure, critics of Biden’s plan ― and even some of its supporters ― have raised questions whether all the spending in the plan is truly needed, whether the tax increases on corporations are excessive and why the White House is using an unusual accounting approach to capture the deficit impact,” The Washington Post’s Heather Long writes.
Biden is making a big bet on the benefits of tackling climate change: The president is trying to make the case that fighting climate change can create jobs, not destroy them. “For decades, Democrats have insisted ‘jobs versus the environment’ is a false choice. But in the scale of his proposal and the audacity of his promises, Mr. Biden may be laying his political future on that idea,” The New York Times reports. “He faces a lot of skepticism.” Union leaders, the Times adds, “are skeptical that the well-paying union jobs the president promises will materialize, noting that, so far, the ecosystem of manufacturers, contractors and utility developers that has grown up around the green economy has often been low-paying and hostile to unions.”
And he’s challenging GOP orthodoxy on taxes and economic growth: The 2017 Republican tax cuts were based on the argument that lowering taxes on businesses would spur investment and job creation. But gross domestic product grew at a 2.4% rate in the two years before the tax overhaul and 2.4% in the two years after, writes Patricia Cohen of The New York Times.
“By contrast,” Cohen says, “the animating idea behind the tax plan put forward by the Biden administration on Wednesday is that the best way to increase America’s competitiveness and foster economic growth is to raise corporate taxes to finance huge investments in transportation, broadband, utilities and more. … By shifting the tax burden, the Biden administration is saying corporations — among the biggest winners the last time around — should pick up more of the tab this time.”
Not surprisingly, that’s drawn strong opposition from the business community. “We strongly oppose the general tax increases proposed by the administration, which will slow the economic recovery and make the U.S. less competitive globally — the exact opposite of the goals of the infrastructure plan,” Neil Bradley, chief policy officer of the U.S. Chamber of Commerce said in a statement Wednesday.
He’s also taking sides in a Democratic Party argument: In announcing his infrastructure plan Wednesday, Biden said he wants to build from the “middle out.” Bloomberg Businessweek’s Peter Coy explains that the phrase is more than just a rhetorical flourish. Biden, he says, “was taking sides in a long-running argument inside the Democratic Party. He was siding with the populist, liberal wing of the party and implicitly distancing himself from the low-tax, pro-business wing associated with former Treasury secretaries Robert Rubin and Lawrence Summers, among others.”
The phrase, Coy explains, was coined by Nick Hanauer, a wealthy entrepreneur and venture capitalist who now advocates for liberal causes, and it indicates an economic approach focused on building a prosperous middle class in order to juice broad-based growth. “It’s the left’s alternative to top-down, or trickle-down economics, which is based on the concept that cutting taxes and reducing regulation on the rich will unleash their entrepreneurial energies and benefit all,” Coy writes. And Biden’s use of the term is another indication that while he has long been seen as a centrist, he’s taking a more progressive approach to the economy than Bill Clinton or Barack Obama did.
“The Biden administration is the first administration in my lifetime to actually believe that the neoliberal framework is wrong and to advance a counter-narrative and new agenda,” Hanauer tells Coy. “It’s incredibly exciting and will lead to ridiculous prosperity for everyone.”
Tax hikes on the rich are popular. Corporate tax hikes less so: A Morning Consult/Politico poll released Wednesday found that more than half of voters support tax hikes to fund infrastructure spending — and voters by a two-to-one margin prefer infrastructure improvements paired with tax increases on the rich and corporations to those without tax hikes.
But the tax hikes on individuals earning more than $400,000 a year and those on corporations aren’t seen the same, with a 10 percentage point drop in support for the business taxes.
The survey of 2,043 registered voters was conducted March 26 to 29 and has a margin of error of 2 points.