Biden Administration Unveils $2 Trillion Infrastructure Plan, Including $213B For Affordable Housing
The Biden administration has rolled out its proposal for roughly $2 trillion in infrastructure spending. The plan calls for funding to repair basic infrastructure, such as roads and bridges, but also a host of other priorities, including upgrades to the U.S. housing stock, electrical grid and water systems, as well as expanding access to broadband internet and improving the pay of home healthcare workers.
The plan calls for $213B to preserve and retrofit more than 2 million affordable housing units and commercial buildings and build more than 500,000 new low-cost housing units. As part of the spending on affordable housing, the president is calling on Congress to pass the Neighborhood Homes Investment Act, which would offer $20B in tax credits for affordable housing over the next five years.
Another part of the Biden proposal would be to enact a grant program that awards money to jurisdictions that eliminate barriers to producing affordable housing, such as exclusionary zoning laws.
The plan would also use $10B to modernize federal buildings, including through the Federal Capital Revolving Fund, with the aim of making the structures more sustainable. The greening of federal properties, which was a focus of the Obama administration, was de-emphasized under President Donald Trump.
As part of spending more on federal facilities, the plan calls for $18B for the modernization of Veterans Affairs hospitals and clinics. The administration points out that the median age of U.S. private sector hospitals is about 11 years, while the facilities in the VA hospital portfolio have a median age of 58 years. The plan calls for upgrading U.S. schools as well.
The president is expected to start stumping for the plan in a speech in Pittsburgh on Wednesday afternoon, framing it as an economic recovery package, especially one that will create union jobs, but also as a way to compete with China.
In the statement released by the White House on Wednesday morning, China was specifically mentioned as a prime U.S. rival in the world economy, and the new infrastructure spending was characterized as critical to competing with "the ambitions of an autocratic China."
Much of the funding for the plan would come via tax increases, which the administration will outline in a separate proposal called the Made in America Tax Plan. Among other measures, that proposal is expected to include raising corporate taxes to 28% from the 21% rate enacted by the Tax Cuts and Jobs Act of 2017, which replaced a tiered structure from 15% to 39%, the Wall Street Journal reports. The tax proposal would also increase taxes on U.S. companies’ foreign earnings to help cover the cost of the infrastructure package.
As an indication of the Biden administration's infrastructure priorities, the Department of Transportation announced in mid-March that it was seeking applicants for the fiscal year 2021 round of the Infrastructure for Rebuilding America grant program, which will fund national and regional transportation projects. The funding available totals about $889M.
For the first time, DOT will look for projects that address climate change and environmental justice, and the department will consider racial equity as a selection criterion. It will also consider whether a project is in a federally designated community development zone, including opportunity zones.