Biden meets with bipartisan group on $2.3 trillion infrastructure plan, saying he’s open to negotiate

Joe Biden Oval Office
President Joe Biden.

  • Biden held his first official meeting with eight bipartisan lawmakers to discuss infrastructure.
  • He told reporters that he is willing to negotiate on both the size and the scope of his plan.
  • Republican lawmakers argue his plan is too focused on things aside from physical infrastructure.
  • See more stories on Insider’s business page.

For the first time since unveiling his $2.3 trillion infrastructure package two weeks ago, President Joe Biden met with a bipartisan group of lawmakers on Monday to discuss the proposal.

Eight lawmakers, including Chair of the Senate Committee on Climate, Science, and Transportation Maria Cantwell, ranking member of the House Committee on Transportation and Infrastructure Sam Graves, and Rep. Don Young of Alaska, joined Biden and Vice President Kamala Harris in the Oval Office to kick off bipartisan discussions.

“I’m prepared to negotiate as to the extent of my infrastructure package, as well as how we pay for it,” Biden told reporters after the meeting.

He also dismissed the idea that the meeting was just “window dressing,” and said he was “prepared to negotiate as to the extent of the infrastructure project as well as how we pay for it,” citing broadband and clean-water access as important parts of his definition of infrastructure.

This meeting followed a press briefing earlier in the day, when White House Press Secretary Jen Psaki said Biden is “absolutely” willing to negotiate on the size and scope of the package.

With regard to scope, Republican lawmakers have argued that it’s too focused on things besides rebuilding physical infrastructure, like roads and bridges. For example, Senate Minority Leader Mitch McConnell said in a statement two weeks ago that while Biden could have drafted a “serious, targeted infrastructure plan” that would have received bipartisan support, “the latest liberal wish-list the White House has decided to label ‘infrastructure’ is a major missed opportunity by this Administration.”

And with regards to the size of the plan, Republican lawmakers have said the $2.3 trillion price tag, along with Biden’s proposed tax hikes, are too high.

Ranking member of the Senate Committee on Commerce, Science and Transportation Roger Wicker, who attended the meeting, told ABC News in an interview on Sunday, “We are willing to negotiate with him [Biden] on an infrastructure package, and this trillion-dollar number is way too high for me.”

He added that negotiations on the plan have to look different than the $1.9 trillion stimulus plan that passed in February without any Republican votes.

Some Democrats have said they’d like to see some changes to the package. Moderate Democratic Sen. Joe Manchin of West Virginia said on a West Virginia radio talk show last week that he does not support Biden’s proposed corporate tax increase to 28%. “Well, the bill basically is not going to end up that way,” he said.

Psaki emphasized in the Monday press briefing that Biden genuinely wants to work with both parties to create a bipartisan infrastructure bill.

“You don’t use the president of the United States’ time, multiple times over … if you did not want to authentically hear from the members attending about their ideas about how to move forward this package,” she said.

Also in the meeting were Democratic Rep. Donald M. Payne, Jr. of New Jersey, Republican Sen. Deb Fischer of Nebraska, Democratic Sen. Alex Padilla of California, and Democratic Rep. David Price of North Carolina, who all sit on committees relevant to rebuilding infrastructure.

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Corporate America wants to avoid higher taxes and social issues. That’s not likely to happen.

Biden
President Joe Biden.

  • For years, America’s biggest companies have steered clear of politics, except for hefty donations.
  • Now, there’s more of an expectation for them to speak out, just as they face a big tax increase.
  • Companies probably don’t want a tax increase, and seem mixed on responding to it.
  • See more stories on Insider’s business page.

Corporate America is going through growing pains on political activism – but it’s still trying to fight off higher taxes. In the Biden era, the two may go hand in hand.

Long apolitical, the dynamic that emerged during the Trump years of big business weighing in on hot-button social issues has, if anything, accelerated in 2021, as reflected in the recent corporate outcry against Georgia’s recent legislation to restrict voting rights.

At nearly the same time, corporate America has been far less aligned with the progressive agenda of funding a large infrastructure and jobs plan with a boost to the corporate tax rate. In fact, only fours ago, in 2017, the business community cheered its biggest win on taxes in decades under former President Donald Trump, when the corporate rate was slashed from 35% all the way down to 21%.

As part of his $2.3 trillion infrastructure package. Biden wants to jack the corporate tax rate up to 28%. It represents a hit to corporate profits and many influential business groups are staunchly opposed to it, along with congressional Republicans.

The Chamber of Commerce’s chief policy officer, Neil Bradley, said the organization “agrees with the Biden administration that there is a great need to invest in American infrastructure and that ‘inaction is simply not an option.'” However, he added, “that doesn’t mean we should proceed with tax hikes that will hurt American businesses and cost American jobs.”

And Josh Bolten, chief executive officer of Business Roundtable, told Bloomberg TV on Thursday that Biden should stick with “real infrastructure” like roads and bridges – and he was “strongly against” the corporate tax hike.

Some individual business leaders are coming out in favor of Biden’s tax increase. Amazon CEO Jeff Bezos has said that the company is supportive of a rise in the corporate tax rate, although he didn’t specify what rate he supports. Lyft president and cofounder John Zimmer has thrown his support behind the 28% rate.

Many other companies are staying tight-lipped about how, exactly, they feel – while perhaps complaining in private, as reported by Politico.

Jeff Bezos
Amazon CEO Jeff Bezos.

Corporate taxes seen as a ‘less charged issue’

The corporate response on taxes is a sharp break from the outcry over Georgia. An open letter from 72 Black executives last week was quickly followed by another joint statement from over 170 business leaders urging state lawmakers against “imposing barriers that result in longer lines at the polls or that reduce access to secure ballot dropboxes.”

Companies in the latest letter included Microsoft, HP and Dow.

Vanessa Burbano, an assistant professor of management at Columbia Business School, said the phenomenon of companies taking political stances is relatively new. She said what companies do choose to speak out publicly about varies – although a handful of companies releasing their own statements does put pressure on others.

Doug Schuler, a professor of business and public policy at Rice University, argued the letter from Black CEOs opened the door for other prominent business figures to take a similar step.

He told Insider that his sense of what CEOS were trying to do was “to make statements to their customers, to their workforce, and perhaps investors they are sensitive to these social issues – it’s an issue they should be on the right side of.”

Agreeing to pay more in taxes to fund Biden’s plan to “build back better,” though? Many CEOs don’t want to be on the right side of that.

The corporate tax rate is “a less charged issue than some of the others that we’ve seen companies take stances on in the past, like including what happened in Georgia, including things related to immigration or LGBTQ rights or things like this that are sort of influence the individual stakeholder much more directly,” Burbano said.

Rep. Don Beyer
Rep Don Beyer.

Politicians are also divided

Sen. Joe Manchin, a moderate Democrat who’s a key vote in the Senate, has expressed his concerns over raising the rate to 28%. He’s more in favor of a 25% rate – and his support will prove pivotal to the eventual passage of any plan as Democrats grapple with slim majorities in Congress.

“Claims that American businesses cannot compete with a corporate tax rate above 28% ignore the clear and indisputable evidence to the contrary,” Rep. Don Beyer (D-VA), Chairman of the US Congress Joint Economic Committee and member of the House Ways and Means Committee, said in a statement to Insider.

He added: “It’s good to see support for a reasonable increase in the rate from business leaders as well as former top Republican economic adviser Gary Cohn,” referring to remarks made just last year by Trump’s former National Economic Council director that, actually, 28% would have been a decent place to arrive at in the 2017 tax law.

Republicans have repeatedly made their opposition to tax hikes clear. Top Republicans also blasted companies for wading into the country’s hot-button issues like voting rights.

“From election law to environmentalism to radical social agendas to the Second Amendment, parts of the private sector keep dabbling in behaving like a woke parallel government,” Senate Minority Leader Mitch McConnell said in a statement. “Corporations will invite serious consequences if they become a vehicle for far-left mobs to hijack our country from outside the constitutional order.”

Experts like Schuler said large companies won’t weigh into every social issue unless the pressure to do so becomes impossible to cast aside. He pointed out that large businesses hadn’t weighed in on another set of proposed voting restrictions in Texas.

“To some extent, I think businesspeople want these issues to go away,” he said. “They hate it when the spotlight is on them.”

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Amtrak’s $80 billion plan to connect the US is the latest step in a rail revolution but has a glaring omission: high-speed rail

Amtrak Acela
Amtrak’s Acela service runs between Washington D.C., New York City, and Boston.

  • Amtrak has unveiled a plan to further connect the US by rail but it doesn’t include high-speed rail.
  • New routes will be added and current routes will be upgraded as Amtrak aims to repair its network.
  • Private companies and states have taken up the costly task of building high-speed rail on their own.
  • See more stories on Insider’s business page.

Americans are all-aboard for high-speed rail but Amtrak’s new rail plan is putting the brakes on bullet train dreams.

Amtrak is getting ready to spend $80 billion of the federal government’s money as part of President Joe Biden’s planned $4 trillion infrastructure bills. The “Amtrak Connects US” plan calls for greater rail connectivity across the US with the addition of new routes and improvement of old ones in a major step forward for America’s rail system.

But one phrase is notably missing from Amtrak’s proposal: high-speed rail. Amtrak’s fact sheet doesn’t mention the phrase even once.

Rather, Amtrak is using the billions to give service to rail-strapped cities like Phoenix, Las Vegas, and Nashville, Tennessee, and upgrade existing lines. Not one penny will be spent towards building a clean-slate high-speed rail line even though getting America’s high-speed rail network in line with those in Europe and Asia is a desire for many Americans.

Jim Mathews, president and CEO of the Rail Passengers Association, told Insider that Amtrak may still be decades away from true high-speed rail and is still readjusting from an era of extreme cost-cutting.

“As recently as three years ago, Amtrak senior leadership was out talking about how routes have to make a profit and long-distance routes shouldn’t exist,” Mathews said, referring to the tenure of former Delta Air Lines chief executive officer Richard Anderson that saw Amtrak’s most nostalgic offerings cut in a bid to save costs.

Read More: Here are 9 hurdles Biden’s infrastructure plan would have to overcome in Congress before it can become law

Before Amtrak can even consider a brand-new high-speed rail network, there’s still a backlog of repairs to work through on its existing lines. And unlike regional transit authorities, Amtrak’s network stretches from sea to shining sea, leaving a lot to maintain and update.

“There’s all these sort of boring infrastructure investments that you got to do,” Mathews said.

On the Northeast Corridor, where Amtrak has its only high-speed service with the Acela, Mathews said that it would cost around $50 billion just to get the line to a “state of good repair.” That’s 62.5% of Amtrak’s proposed $80 billion funding from the infrastructure bill in just repairs alone and not even laying the foundation for true high-speed rail in the Northeast.

True high-speed rail would require new infrastructure, including straight lines of track so trains can achieve their top speeds. In congested regions like the Northeast, that means spending millions if not billions just to purchase property along the line’s planned route.

“Politically, high-speed has a different ring to it and I think Amtrak is probably unwilling to step into that,” Mathews said. “From their point of view, they’re like, ‘Hey, we just want to run our trains. We want to run more trains and we want them to be on time.'”

Amtrak is already spread thin in its languishing nationwide network. Existing infrastructure across the US has fallen into disrepair and battles with freight railroads prohibit Amtrak from being competitive on existing lines.

Private companies have instead spearheaded the effort to bring high-speed rail to the US. Brightline built a high-speed line to connect West Palm Beach and Miami in Florida that will soon be connected all the way to Orlando. In Texas, the Texas Central Railroad is developing a high-speed rail line that will connect Dallas and Houston in only 90 minutes.

California has even taken up the mantle with a new high-speed rail line between Los Angeles and San Francisco. Construction is currently underway with the 800-mile line taking at least 14 years to complete at an estimated cost of at least $68 billion, according to Architect Magazine.

Amtrak is introducing new trains to the Acela line but those will only travel slightly faster than the current train sets. And pre-pandemic non-stop service between New York and Washington still took two hours and 30 minutes, despite being a comparable distance to the planned route between Dallas and Houston.

“What about grandma?”

Critics of Amtrak and its money-losing ways look too much at the big picture, according to Mathews, and not at the smaller journeys that are more in line with Amtrak’s original congressional charter. Only around 10% of riders take the full length of a long-distance service like the Empire Builder between Chicago and Seattle, for example, whereas most customers are taking the train between intermediary stops.

“The vast majority of trips take place in between,” Mathews said. And those short-distance trips between say Staples, Minnesota and Wolf Point, Montana, where convenient air service is a distant dream, is Amtrak’s bread and butter. Fares are comparatively lower than flying and trains can better accommodate passengers that face issues when flying, whether it be because they require medical devices or the nearest airport is hours away.

Keeping those smaller cities connected is also the reason why Amtrak rushed to get long-distance trains back to daily service after they were reduced to three-times-weekly service during the pandemic. Restoring them to daily service may have seemed counter-intuitive from a revenue perspective but the move ensures more Americans that rely on the rails have access to it.

When Amtrak does eventually enter the high-speed rail realm, it may be relegated to the lines that private companies haven’t already scooped up. But Mathews believes that’s alright because the rail corporation’s purview, after all, is to serve the entire country – profitable or not.

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Rep. Katie Porter calls Biden’s move to split up his infrastructure package ‘a big mistake’

katie porter
Representative Katie Porter (D-CA).

  • Rep. Katie Porter of California called Biden’s move to split his infrastructure plan ‘a big mistake.’
  • She argued Democrats should merge family policies into a large infrastructure plan.
  • Last month, Biden noted that 2 millions women had left the workforce since the pandemic started.
  • See more stories on Insider’s business page.

Democratic Rep. Katie Porter of California called President Joe Biden’s decision to split up his infrastructure plan into separate jobs and family components a major error.

“This idea that there are two separate buckets, a bucket of American Jobs Plan … and this idea he has a second plan coming soon that he’s called the American Families Plan. I told the White House, ‘I think this is a big mistake,'” she said in an Axios interview published Friday.

She continued: “I think it’s mislabeling what you know as president to be true, which is that all of this is about our economy and economic recovery.”

“Strong family policy is strong jobs policy,” she said. Porter previously expressed a fear that women could be left behind in the Biden plan, CNBC reported.

Biden recently unveiled a $2.3 trillion public-works plan, the first of two plans aimed at upgrading the nation’s infrastructure. The plan contains new funds to repair deteriorating roads and bridges, eliminate lead pipes from water systems, and widen the reach of broadband networks.

The second part will be known as the American Family Plan, a package expected to contain a multi-trillion investment into childcare and education. Republicans are strongly critical of the Democratic infrastructure push, arguing that its tax hikes would slam into the economy.

Last month, Biden noted that 2 millions women had left the workforce since the pandemic started.

“A lot of that is because so much extra weight of caregiving and responsibility is falling on their shoulders,” he said at a White House event. “It causes women to miss work, cut hours, and leave their jobs and care for their children and aging loved ones.”

“How many men are staying home and doing it, and the woman’s staying in the workforce?” he asked.

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CEO group says Biden should stick to ‘real infrastructure’ and ‘leave the rest of the stuff for something else’

Joe Biden
President Joe Biden.

  • Business Roundtable’s CEO told Bloomberg that Biden’s infrastructure plan should stick to roads and bridges.
  • The lobbying group also opposes raising the corporate tax to 28% as a way to fund the plan.
  • Biden expressed willingness to work with Republicans on negotiating the size of the tax hike.
  • See more stories on Insider’s business page.

President Joe Biden’s $2.3 trillion infrastructure plan is ambitious. It includes funding for things like climate change and research initiatives, and an influential business lobbying group wants Biden to scale things way back.

Josh Bolten, chief executive officer of Business Roundtable, which represents CEOs of the largest US companies, said in an interview with Bloomberg TV on Thursday that the organization wants Biden to limit the scope of the package to mainly address roads and bridges and “leave the rest of the stuff for something else.”

Bolten, who was former President George W. Bush’s chief of staff for almost three years, did not clarify what he was referring to as “something else.”

“It’s the real infrastructure that can attract bipartisan support,” Bolten said, adding that “more modern infrastructure” also needs investment, citing broadband as an example. In this regard, Bolten is slightly more positive on Biden’s plan than Republican leadership, which has argued that very little of Biden’s plan fits the definition of infrastructure. In fact, Bolten said the Business Roundtable favors a “substantial amount” of what Biden has proposed. For his part, Biden has argued that infrastructure has always periodically undergone reinventions, in step with technology.

Biden’s plan also includes a proposed corporate tax rate increase to 28%, and Bolten said the group, which includes the CEOS of Apple and Amazon, is “strongly against” that proposal. Former President Donald Trump’s 2017 tax cut slashed the rate from 35% to 21%.

“It’s a massive tax increase on US business, which is really damaging, not just to the shareholders of all those businesses but to the employees and customers as well,” he said. The hike, he added, “would make us once again the least competitive in the developed world.”

Earlier this week, Bolten issued a statement criticizing Treasury Secretary’s related efforts to establish a global corporate minimum tax rate, saying it “threatens to subject the U.S. to a major competitive disadvantage.”

Insider reported on Thursday that while 65% of voters support corporate tax hikes to pay for infrastructure, Republican lawmakers, and even some Democrats, are opposed to doing so.

For example, Senate Minority Leader Mitch McConnell said Biden’s plan will get no Republican support in the Senate because “the last thing the economy needs right now is a big, whopping tax increase,” and Democratic Sen. Joe Manchin of West Virginia said on a West Virginia radio show that he would not support a corporate tax increase to 28%. Manchin does want an increase, though, and seems more comfortable with 25%.

The 28% rate seemed reasonable last year to Gary Cohn, the former head of Trump’s National Economic Council. He said at the time he was “actually OK at 28%.”

In a speech on Wednesday, Biden said he would be willing to negotiate with Republicans on the size of the corporate tax increase.

“I’m wide open, but we got to pay for this,” Biden said. “I am willing to negotiate that.”

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AOC says Biden’s infrastructure plan is way too small – she wants a $10 trillion package

alexandria ocasio-cortez aoc
Rep. Alexandria Ocasio-Cortez (D-NY).

  • An ideal infrastructure plan would spend $10 trillion, Rep. Alexandria Ocasio-Cortez said.
  • The plan Biden unveiled Wednesday is “encouraging” in scope but can be bigger, she said on MSNBC’s “Rachel Maddow Show.”
  • A larger plan could create tens of millions of jobs and vastly improve housing and health care, she said.
  • See more stories on Insider’s business page.

President Joe Biden has repeatedly said he aims to “go big” with plans to revitalize the US economy. For Rep. Alexandria Ocasio-Cortez, the administration’s $2 trillion infrastructure plan isn’t big enough.

The president unveiled the American Jobs Plan on Wednesday as a follow-up to the $1.9 trillion stimulus approved in March. The package includes spending on traditional infrastructure projects like roads and bridges as well as measures to cut down on carbon emissions and address the country’s housing shortage. The bill’s massive price tag is meant to be spread out over eight years, completely paid for over 15 years by tax hikes for corporations.

“It’s big, yes. It’s bold, yes. And we can get it done,” Biden said in a speech announcing the plan.

More progressive members of the Democratic party see room to be even more ambitious. The package’s scope is “really encouraging,” she said, but to really get to a plan that tackles America’s challenges, “we’re talking about realistically $10 trillion over 10 years.” That would cover the “ideals” sought by progressive lawmakers, Ocasio-Cortez said Wednesday on MSNBC’s The Rachel Maddow Show.

“I know that may be an eye-popping figure for some people, but we need to understand that we are in a devastating economic moment,” she said. “We have a truly crippled health-care system and a planetary crisis on our hands, and we’re the wealthiest nation in the history of the world.”

Such a plan would create tens of millions of “good union jobs,” improve the country’s health care, revamp infrastructure, shore up housing supply, and bring carbon emissions in line with standards set by the Intergovernmental Panel on Climate Change, the representative from New York added.

To be sure, the American Jobs Plan is only half of Biden’s latest spending push. The White House plans to unveil a package aimed at upgrading care facilities and education, named the American Families Plan. The proposal will likely include measures for universal pre-K, free community college, and extending child tax credits included in the March stimulus bill.

The White House is reportedly willing to spend $4 trillion across the two packages, a sum that would bring recovery spending under his term to nearly $6 trillion. Democrats so far have accepted the plan.

Democratic Sen. Joe Manchin of West Virginia – a moderate member of the party with a huge influence on Senate agenda – backed $4 trillion in infrastructure spending in January, saying such spending is necessary to bring back the nearly 10 million jobs still lost to the pandemic.

Manchin’s support marks a shift from the intraparty disagreements seen just years ago. More moderate members of the party increasingly support economic policy that centers working-class Americans, Ocasio-Cortez said.

“People really are starting to understand that these issues are no longer fringe progressive demands, but they are consensus builders,” she added.

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Biden’s infrastructure plan is a ‘green tidal wave’ that will revive the EV sector after its recent pullback, Wedbush says

president joe biden

President Biden’s infrastructure plan is set to be released on Wednesday afternoon and some analysts argue it will help revive the EV sector after its recent pullback.

Wedbush’s Dan Ives said in a note to clients on Wednesday morning that he expects a “green tidal wave” from the plan to boost EV stocks.

The analyst said around $200 billion or roughly 10% of President Biden’s plan could go towards electric vehicle initiatives “based on chatter out of the Beltway.”

That’s good news for EV stocks that have been battered recently by a rotation away from highly valued growth and tech names into more value-oriented plays.

Tesla stock is down some 28% from its January 26 highs, while EV names like Nikola and Lordstown Motors are down roughly 22% and 42%, respectively, over the past month alone.

In his Wednesday note, analyst Dan Ives said that “the Street” needs to see two specific components of the infrastructure bill pass through the House and get enacted in order to “change the game” for the EV sector in the US after the pullback.

First, Ives said he hopes to see an expansion of tax credits for EVs “to the $10k range or potentially higher in a tiered system.”

Second, the analyst said he expects to see Biden lift the 200,000 vehicles per manufacturer ceiling on EV credits which would restore the incredibly valuable tax credits for veteran manufacturers like Tesla and GM.

Ives also said that an expansion of charging stations around the US over the next decade would help support a “groundswell EV green tidal wave for consumers/trucking.”

The Wedbush analyst highlighted EV battery companies, recyclers, supercharging infrastructure firms, and commercial EV plays that are set to benefit from the infrastructure plan and EV boom as well.

Ives noted a considerable runway of growth for EVs in the US. EV sales represent just 2% of auto sales in the US compared to 4.5% in China and 3% globally.

According to Ives, the EV market represents a $5 trillion total addressable market over the next decade, which means “many EV OEMs/supply chain players are poised to be major winners over the coming years.”

One thing that wasn’t mentioned in the Wedbush note was that the infrastructure bill is set to be funded by tax hikes for corporations, which may hurt earnings.

Some reports say Biden’s upcoming tax plan could contain up to $3.5 trillion in tax hikes for wealthy individuals and corporations.

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