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The Guardian view on the US infrastructure plan: Joe Biden's bold bet | Editorial


President Joe Biden is governing like a man in a hurry. Three weeks ago, he persuaded the US Congress to pass his $1.9tn Covid stimulus package. This week, he began the task of building congressional support for an even larger jobs and infrastructure renewal plan. The package is worth at least another $2tn. It involves massive investment in transport, housing and commercial buildings, green jobs, social care and much else besides. Further spending plans on “human infrastructure” – in the shape of aid to the poor, to parents and to women – are expected in a few weeks’ time. The total cost may end up close to £4tn.

This week’s package involves several bold bets whose outcomes should be closely watched in America and beyond. Mr Biden’s central proposition is that the federal government can resume the activist role in economic growth that it played in the mid-20th century under leaders from Franklin Roosevelt to Richard Nixon. This comes with a second twist, that the activist role can deliver tens of thousands of well-paid and unionised climate change and clean-technology jobs, rather than those that involve pouring concrete or boosting fossil fuel consumption. Wrapped into this is a third gamble, that the United States can take on and defeat China and other Asian economies to become a global leader in the semiconductor, electric battery and electric vehicle industries.

Spending of $213bn on energy-efficient housing and construction, and of $174bn on electric vehicle incentives are the centrepieces of the package. Given that the US is the planet’s second largest fossil fuel emitter, these are the right priorities. Whether they go far enough is more doubtful. In a country with more than 276m vehicles, the planned 500,000 vehicle charger points by 2030 will not go far, for example. But improved high-speed broadband in rural and urban America is desperately needed, not least to reduce inequality. More traditional infrastructure projects such as roads and bridges, rail and disaster resilience are part of the package. Airports, on the other hand, come low down the pecking order.

The president is also making a big gamble on taxation. Unlike the stimulus package, the new spending will be paid for by new corporate taxes and taxes on the wealthy, not by new borrowing. Eight years of planned new spending will demand 15 years’ worth of new taxes, the White House says. Mr Biden plans to raise corporate tax rates from 21% to 28%. This falls well short of the 35% rate that was slashed by Donald Trump in 2017. The top rate of income tax is expected to rise from 37% to 39.6%, precisely reversing a Trump cut. Even so, Mr Biden’s initiative offers a huge ideological and fiscal challenge to the small state, low tax orthodoxies that have shaped politics in the US and beyond since the Ronald Reagan era 40 years ago.

Partly for that reason, Mr Biden faces an even tougher road in getting Congress to back him. While many Democrats say that the plan does not go far enough, others cavil at its size and implications. With wafer-thin Democratic majorities in both houses, and the Republican party obdurate in its opposition, the president is unlikely to get his way without concessions on both wings.

If this suggests an ultimately doomed effort to re-energise bipartisan politics in an era of ideological confrontation, it is important at the same time to recognise the historic nature of the president’s basic proposition. Mr Biden may be acting like a man who is aware his congressional base may not outlast 2022. But he is also trying to show that government is still capable of doing big things, and even of proving that democratic capitalism can work.



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