Biden’s Infrastructure Plan Would Make America Outsource Again

April 10, 2021 Updated: April 12, 2021

Commentary

President Joe Biden is in the midst of a media blitz to garner support for his so-called infrastructure plan, the American Jobs Plan.

At a recent press conference, Biden said his plan “is a blueprint for infrastructure needed for tomorrow, not just yesterday, tomorrow. For American jobs, for American competitiveness.”

There are two problems with that statement. First, Biden’s plan is light on infrastructure, as it’s typically and traditionally defined. Second, it would make America less competitive. In fact, it would almost assuredly make America outsource jobs again.

According to the Cambridge Dictionary, infrastructure is defined as “the basic systems and services, such as transportation and power supplies, that a country or organization uses in order to work effectively.”

As it’s currently constructed, Biden’s American Jobs Plan would cost about $2.2 trillion. Yet only a tiny amount would be spent on what the Cambridge Dictionary defines as “infrastructure.”

Senate Minority Leader Mitch McConnell (R-Ky.) issued a press release detailing how little Biden’s American Jobs Plan spends on what Americans commonly refer to as infrastructure.

“This plan is not about rebuilding America’s backbone. Less than 6 percent of this massive proposal goes to roads and bridges. It would spend more money just on electric cars than on America’s roads, bridges, ports, airports, and waterways combined,” McConnell said.

McConnell is correct. Biden’s plan is less about roads and bridges and more about social programs and big government boondoggles.

Consider: The American Jobs Plan allocates $621 billion to what can be broadly called infrastructure under the loosest definition.

The other $1.4 billion would be spent on what is called “soft infrastructure.” This includes $400 billion for home health care workers. And $580 billion for government research and development projects.

However, according to Biden, anything and everything is now deemed infrastructure.

“The idea of infrastructure has always evolved to meet the aspirations of American people and their needs, and it’s evolving again today,” Biden said.

He added infrastructure now includes “expanded services for seniors. … It’s better wages and benefits and opportunities for caregivers who are disproportionately women, women of color and immigrants.”

Aside from the debate over whether or not the American Jobs Plan is really about infrastructure, one should also question Biden’s claim that his plan would improve American competitiveness.

For starters, Biden’s plan includes several tax hikes, most notably increasing the corporate income tax rate to 28 percent.

This alone would make the United States less competitive.

As the Tax Foundation notes: “An increase in the federal corporate tax rate to 28 percent would raise the U.S. federal-state combined tax rate to 32.34 percent, higher than every country in the OECD, the G-7, and all our major trade partners and competitors including China. This would harm U.S. economic competitiveness and diminish our role in the world.

“When the U.S. last had the highest corporate tax rate in the OECD, prior to tax reform in 2017 with the Tax Cuts and Jobs Act (TCJA), the U.S. experienced several years of economic malaise, including chronically low levels of investment, productivity, and wage growth, as well as major distortions and avoidance schemes in the corporate sector. This included corporate inversions to lower-tax countries, migration out of the corporate sector and into the noncorporate sector, and a decline in business dynamism. This is why the U.S. lowered the corporate tax rate, to compete with other countries around the world that lowered theirs long ago.”

The Tax Foundation estimates “raising the federal corporate tax rate to 28 percent would reduce long-run economic output by 0.8 percent, eliminate 159,000 jobs, and reduce wages by 0.7 percent.”

Although the Biden administration is trying to paint the American Jobs Plan as a once-in-a-generation infrastructure overhaul that will refurbish our nation’s crumbling roads and bridges while creating millions of jobs, the facts say otherwise.

Perhaps McConnell put it best when describing the reality of Biden’s American Jobs Plan: “This proposal appears to use ‘infrastructure’ as a Trojan horse for the largest set of tax hikes in a generation. These sweeping tax hikes would kill jobs and hold down wages at the worst possible time, as Americans try to dig out from the pandemic.”

Chris Talgo is senior editor at The Heartland Institute. Talgo writes op-eds, articles for Health Care News and Environmental and Climate News, and hosts podcasts.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.