‘Car Guy’ Biden Pitches Electric Vehicles in Race Against China

By Yuval Rosenberg

Biden Pitches His Infrastructure Plans as Necessary to Win Race
Against China

President Joe Biden promoted his $2.3 trillion infrastructure
plan and his proposal to invest $174 billion to grow the U.S.
electric vehicle market with a visit Tuesday to the Ford Rouge
Electric Vehicle Center in Dearborn, Michigan.

“My name is Joe Biden, and I’m a car guy,” the president said at
the start of his speech. He later got behind
the wheel of an all-electric Ford F-150 Lightning pickup
truck.

Biden has proposed spending upwards of $2.3 trillion on a wide
variety of projects, ranging from standard items like highways and
bridges to more wide-ranging issues such as job training, eldercare
and green energy. To help pay for those investments, Biden has also
proposed a package of tax hikes, including an increase of the
corporate tax rate from 21% to 28% and a new minimum tax on foreign
earnings, as well as a crackdown on tax cheats by the IRS.

In his speech, Biden said his proposed investments are necessary
to catch up to China in the race to lead the electric vehicle
sector. Biden’s plan includes funding to expand the network of
electric charging stations and would provide rebates and incentives
for Americans to buy electric cars. Biden said that the United
States used to lead the world in research and development
investments, but that the country now ranks eighth, and China is
No. 1.

“The future of the auto industry in electric. There’s no turning
back,” Biden said. “The real question is whether we’ll lead or
we’ll fall behind in the race to the future. Or whether we’ll build
these vehicles and the batteries that go in them here in the United
States or rely on other countries. Or that the jobs to build these
vehicles and batteries are good-paying union jobs with benefits,
jobs that will sustain and grow the middle class.”

Biden slams Trump: Biden also knocked former President
Donald Trump for not passing an infrastructure bill and for
allowing his administration’s series of “infrastructure weeks” to
become a joke. “They announced infrastructure week,” Biden said.
“And they announced it and announced it and announced it and
announced it. Every week for four years, didn’t do a damn
thing.”

Touting a bipartisan approach: Biden touted his Oval
Office meetings with Republicans and said he believes he can reach
a bipartisan deal on an infrastructure package and was waiting for
a revised counterproposal from GOP senators, which is expected to
be delivered today or tomorrow. “We made on thing clear: We’ll
compromise, but doing nothing is not an option,” he said.

Some Republicans have objected to Biden’s proposed funding for
electric vehicles and the initial $568 billion counteroffer
presented by a group of GOP senators focused more on fixing roads
and bridges. Republicans have also rejected Biden’s proposal to pay
for infrastructure spending by raising corporate taxes.

Negotiations on an infrastructure package continued even while
Biden was in Michigan, as a group of administration officials
including Transportation Secretary Pete Buttigieg and Commerce
Secretary Gina Raimondo were slated to meet with Republicans on
Capitol Hill Tuesday afternoon, according to White House Press
Secretary Jen Psaki.

White House Links Infrastructure Plan to Cybersecurity

In the wake of a cyberattack on a key pipeline that caused fuel
shortages and soaring gas prices in parts of the U.S. last week,
the Biden administration is saying that its infrastructure proposal
includes significant funding for cybersecurity.

Although the total figure is undefined, the White House says
that Biden’s $2.3 trillion American Jobs Plan includes tens of
billions for cybersecurity, Bloomberg News
reports.

The proposal calls for $20 billion to fund state and local
efforts to modernize energy systems and another $2 billion for grid
resilience, upgrades that would include cyber defenses. The
administration also says its proposal to spend $100 billion on
broadband infrastructure is a component of upgrading
cybersecurity.

“Cybersecurity is one of the preeminent challenges of our
time, which is why President Biden has made strengthening U.S.
cybersecurity capabilities a top priority,” a White House document
reviewing the issue said.

Nearly 60 House Democrats Warn Against Bipartisan
Infrastructure Deal

As Senate Republicans were preparing to deliver their updated
proposal to the White House, a group of nearly 60 House Democrats
was pushing party leaders to avoid scaling back the size and scope
of any infrastructure legislation. In a letter to House Speaker
Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY)
obtained by
ABC News, the Democrats said that achieving
legislative priorities should come before bipartisanship.

“While bipartisan support is welcome, the pursuit of
Republican votes cannot come at the expense of limiting the scope
of popular investments,” they wrote. The signatories were
led by Congressional Progressive Caucus Chair Rep. Pramila Jayapal
(D-WA). “On a host of priorities that can be delivered by this
Congress, the trade-offs for Republican votes are stark. We ask
that you work with the White House to prioritize transformative
legislation that our voters were promised, which may require
reforming or even eliminating the Senate filibuster as well as
wielding the full powers available of the presidency, vice
presidency, and relevant federal agencies to achieve these
goals.”

The letter urged lawmakers to "pursue a larger
up-front investment that truly meets this historic moment," calling
for a package even larger than Biden has proposed. The Democrats
said they “strongly support” Biden’s campaign proposal for some $7
trillion in investments in health, energy, infrastructure and
child-care.

The group also called for passing their legislation in a
single package, even as Biden appears to be open to passing a
bipartisan package for physical infrastructure such as roads and
bridges and then following up with another package that Democrats
could look to pass on their own via the budget reconciliation
process.

‘An Outbreak of Major Bipartisanship’ on
Infrastructure Financing

The challenges Biden faces in reaching a bipartisan
infrastructure deal were on display at a Senate Finance Committee

hearing Tuesday on financing options for such a
package.

“Right now in Washington, D.C, it would be hard to get members
of Congress to agree on the proper way to butter toast, but I think
everybody understands the importance of upgrading infrastructure,”
Sen. Ron Wyden (D-OR), the committee chair, said in his opening
remarks.

But Wyden also said that, to his mind, the “obvious answer” to
the tough question of how to pay for infrastructure in a fair way
was to have businesses pick up the tab: “It is long past time for
mega-corporations to pay a fair share for building and repairing
roads and bridges. They drive trucks across America’s roads and
highways. They send products to market through our airports and our
waterways. They rely on our power grids and communication systems.
And it seems to me to be just basic fairness that they ought to
pitch in for the infrastructure that makes our country an economic
superpower.”

Wyden said that “mega corporations” have never in modern history
contributed less to federal revenues than they do now, and he again
cited Congressional Budget Office data indicating that in the wake
of the 2017 GOP tax overhaul, corporate income tax revenue is down
nearly 40% from the 21st century average. He also rejected the
Republican idea of having user fees pay for infrastructure, arguing
that those fees suggest that “middle class workers are supposed to
pay what mega-corporations will not.”

Moments later, Sen. Mike Crapo (R-ID), the top Republican on the
Finance Committee, called the idea of corporate tax increases
“counterproductive and a non-starter on my side of the aisle.”
Crapo defended looking to user fees, including those on electric
vehicle drivers, to pay for infrastructure.

“There is no silver bullet for how to pay for transportation
infrastructure, but historically it has been paid for by user fees,
which makes sense,” he said. “To maximize use of taxpayer dollars,
we should consider proposals to attract private capital for
infrastructure projects, repurpose unused federal funds, and
improve and expand upon existing infrastructure loan programs.”

Both senators agreed on one possible funding option: Wyden and
Crapo both expressed openness to renewing the Build America Bond
program created under the Obama administration.

The Hill’s Naomi Jagoda
explains that under that program “state and local
governments could issue taxable bonds in 2009 and 2010 and receive
a subsidy from the federal government for a portion of their
interest costs. The program was popular, with about $180 billion of
bonds issued, but was not renewed when it expired.”

"This is an approach that Congress has to return to because it
works," Wyden said. Crapo agreed, saying the bonds “can be a
significant way of incentivizing private capital into our
infrastructure.”

Wyden called that “an outbreak of major bipartisanship.”

Read more about the Build America Bond program and a
similar new proposal at
The Hill.

Yellen Pitches Corporate Tax Hike to Business Group

Treasury Secretary Janet Yellen on Tuesday attempted to drum up
support among business owners for President Biden’s plans for
infrastructure investments and tax increases.

Speaking at a U.S. Chamber of Commerce event, Yellen argued that
the Biden proposals would benefit American companies and make them
more competitive internationally. “We are confident that the
investments and tax proposals in the jobs plan, taken as a package,
will enhance the net profitability of our corporations and improve
their global competitiveness,” Yellen said. “We hope that business
leaders will see it this way and support the jobs plan.”

In her pitch, Yellen asked businesses to contribute more to
government spending than they have in recent years. “With corporate
taxes at a historical low of one percent of GDP, we believe the
corporate sector can contribute to this effort by bearing its fair
share: we propose simply to return the corporate tax toward
historical norms,” she said.

Yellen also spoke about the lack of power of workers in the U.S.
and the effect that has had on economic inequality. “Workers,
particularly lower-wage earners, have seen wage growth stagnate
over several decades, despite overall rising productivity and
national income,” she said. “There are several contributors to this
troubling trend, but one important factor is an erosion in labor’s
bargaining power.”

A chilly response: While expressing
support for new investment in infrastructure, Suzanne Clark, who
leads the chamber, said the organization opposes raising taxes to
pay for it. “The data and the evidence are clear: the proposed tax
increases would greatly disadvantage U.S. businesses and harm
American workers, and now is certainly not the time to erect new
barriers to economic recovery,” Clark said in a statement. “The
administration is right to champion infrastructure, and we want to
be there with them to do that, but there are other ways to finance
it.”

3 Signs the US Is Beating
Covid-19

The U.S. is winning the war against Covid-19,

says Paige Winfield Cunningham of The
Washington Post, citing three key indicators showing significant
progress:

  • Average new cases per day dropped nearly 20% in the last
    week and are now below 35,000, down from a peak of more than
    250,000 in January.
  • Average hospitalizations per day have fallen 12.6%, to
    10 per 100,000.
  • Average deaths per day are down by 16.5% and are now
    below 580, a level not seen since the pandemic lull early last
    summer.

In addition, the vaccination effort has been a remarkable
success, with about 60% of all U.S. adults receiving at least one
dose, and 47% now fully vaccinated.

Still, this is no time to grow complacent, health experts
say. The rate of vaccinations is slowing, recently dropping below 2
million per day, and more infectious variants of the virus are
continuing to spread.

“We remain in a race between vaccines and the variants so
we need to continue to overcome hesitancy and ramp up vaccination
rates here and, at least as important, do much better to get
vaccines produced and distributed worldwide,” Jesse Goodman,
professor of medicine and infectious diseases at Georgetown
University, told Winfield Cunningham.

Send your feedback to yrosenberg@thefiscaltimes.com.
And please tell your friends they can
sign up here for their own copy of this
newsletter.

News

Views and Analysis