Biden’s plan to spend $775 billion on childcare and eldercare could create millions of jobs, study says

taking temperature childcare daycare
In this May 27, 2020 photo, Aaron Rainboth, a teacher at the Frederickson KinderCare daycare center in Tacoma, Wash., wears a mask as he takes the temperature of Benjamin Simpson, 4, after he complained of feeling hot following an outdoor play period, but found it to be normal. In a world weary of the coronavirus, many working parents with young children are now struggling with the decision on when or how they’ll be comfortable returning to their child care providers. Frederickson KinderCare, which has been open throughout the pandemic to care for children of essential workers, removed carpets and spaced out tables and chairs as part of their measures to control the spread of the coronavirus.

    • Spending $775 billion on care could create millions of jobs, per a study from UMass’ Political Economy Research Institute.
    • Across 18 states, it could result in 5.3 million new jobs, the study by Lenore Palladino found.
    • Biden is proposing $400 billion for home and community care and $25 billion for upgrading childcare.
    • See more stories on Insider’s business page.

Spending $775 billion on three different forms of care infrastructure – childcare, home healthcare, and residential care – could create 5.3 million jobs in 18 states over 10 years, a new study found.

The research, from Lenore Palladino at the Political Economy Research Institute at University of Massachusetts, Amherst, models a $775 billion investment in care infrastructure, something that President Joe Biden campaigned on. Currently, the American Jobs Plan, the first part of Biden’s two-pronged infrastructure package, contains $400 billion for home and community care for the elderly and disabled, along with $25 billion for upgrading childcare facilities and making them more accessible.

“As the mother of a son who experiences severe disabilities, I really know firsthand the difference these services can make, and I’m going to work with the administration and members of Congress on the details for significant investments in home and community-based care,” Sen. Maggie Hassan (D-NH) said in a press conference about the study.

In the 18 states studied, labor force participation by women fell by 3.2% from 2019 to 2020. According to the study, there are 1.7 million care workers in those states, and 87% are female. They are disproportionately women of color.

The study also notes that “median hourly wages are extremely low” for those working as nursing assistants, home healthcare or personal care aides, as well as those working in childcare, coming in at an average of $13.09 an hour.

“Wages are extremely low for the care workforce, based in the structural racism and sexism that has consigned care work as ‘women’s work,’ and disproportionately work by women of color that is not seen as economically valuable,” Palladino writes.

Tina Tchen, the president and CEO of TIME’S UP Foundation, said in the press conference that low wages in the industry are “a legacy that goes all the way back to slavery in our country, right, where caregiving, this kind of work was not compensated for.” That marginalization continued, Tchen said, as caregivers were left out of labor protections in the New Deal; wages still remain low today.

“Advocates have been calling for, in some cases, $15 an hour,” Palladino said. “I think that the concept of a family supporting wage is an incredibly important concept because we know that so many people in the care workforce are supporting their families.”

The next part of the infrastructure package, the American Family Plan, is expected to be announced in the coming weeks. That plan will also invest highly in childcare and education. However, Rep. Katie Porter has called it a mistake to split up the two packages. Politico reported that some childcare advocates were disappointed to see that some measures – like raising wages and benefits – weren’t bundled together. Goldman Sachs projects the likeliest scenario is a single bill worth about $3.3 trillion.

On the whole, while there’s been some recovery, women workers have been hit hard during the pandemic. And, following the K-shape of the recovery, low-wage female workers have faced down income losses while risking their lives to work in person.

“You can’t go to work if you don’t have a road to get there. You can’t go to work if you don’t have a safe place for your kid Right. These are like synonymous things,” Jasmine Tucker, the National Women’s Law Center’s director of research, previously told Insider. “Childcare is infrastructure and we need to treat it that way.”

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Top GOP senator says it’s ‘an impossible sell’ for Republicans to strike a deal on an infrastructure package that rolls back Trump tax cuts

Sen. Roger Wicker
Sen. Roger Wicker

  • Sen. Roger Wicker downplayed the odds of an infrastructure deal that included rolling back Trump’s tax cuts.
  • He called it ‘an impossible sell’ among Republicans on Monday.
  • Wicker met with Biden to discuss his jobs plan along with other Republicans and Democrats.
  • See more stories on Insider’s business page.

Sen. Roger Wicker of Kansas, the ranking Republican on the Senate Commerce Committee, downplayed the prospect of a bipartisan deal on President Joe Biden’s infrastructure plan that included rolling back the 2017 Trump tax cuts.

“It would be an almost impossible sell from the president to come to a bipartisan agreement that included the undoing of that signature [law],” Wicker said. “And I did tell him that.”

He described the 2017 tax cuts as “one of my signature achievements in my entire career” and said he supports keeping the corporate tax rate at 21%. The law slashed it to that level from 35%, and Biden wants to lift it to 28% to generate federal dollars for his infrastructure plan.

The remarks came after a bipartisan meeting between the White House and a centrist group of eight lawmakers, which Wicker called “a good meeting.” Biden administration officials said it was part of an effort to shore up support for their infrastructure plan.

“He looks forward to hearing their ideas, and his objective is to find a way forward where we can modernize our nation’s infrastructure so we can compete with China,” Psaki said hours before the meeting. The White House also released an ‘infrastructure report card‘ on Monday that hit a majority of states with Cs and Ds.

The Biden infrastructure plan includes major funding to repair roads and bridges and set up clean energy incentives. It also contains federal dollars for in-home elder care, public transit, broadband, and schools, among others.

Republicans are lining up in opposition to the Biden infrastructure plan. They argue its tax hikes on multinational corporations would hurt job growth and their global competitiveness at a vulnerable period in the economic recovery.

Senate Majority Leader Mitch McConnell slammed the size and scope of the Democratic plan on Monday.

He said during a floor speech that Democrats were “embarking on an Orwellian campaign to convince everybody that any government policy whatsoever can be labeled ‘infrastructure.’ Liberals just have to believe in it hard enough.”

Still, some Democrats are seeking changes to the plan. Sen. Joe Manchin of West Virginia says he is opposed to a 28% corporate tax rate and favors 25% instead.

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4 reasons the Democratic push for a huge infrastructure package will be tougher than the stimulus scramble

Pelosi Biden Harris
President Joe Biden and Vice President Kamala Harris meet with Speaker Nancy Pelosi at the White House to discuss the stimulus package.

  • The path ahead for Democrats on infrastructure looks different from the one that produced a $1.9 trillion stimulus.
  • Democrats want to pay for some of it, and they’re not rushing to meet a deadline.
  • It’s also more complex than a package to stimulate the economy, and compromises over it could take months.
  • See more stories on Insider’s business page.

Congress is returning from a two-week Easter recess and now it’s set to tackle other parts of President Joe Biden’s legislative agenda. Likely the biggest piece of it will be an infrastructure package – A $2.3 trillion part of which has been unveiled, and a second part which will be rolled out in several weeks.

Yet the path ahead for Democrats looks very different from the one that produced a $1.9 trillion pandemic relief package, which Biden signed into law in March. They are aiming to implement a sweeping public-works to demonstrate that their control of Washington produces tangible benefits for ordinary people.

For now, they are still attempting to draw Republican support, but that already looks a vain hope. The day Biden unveiled his plan, Senate Majority Leader Mitch McConnell blasted it as a “Trojan Horse” for liberal priorities that go beyond traditional roads and bridges definition of infrastructure.

It only gets more complicated for Democrats from there.

Here are four reasons Democratic push for a huge infrastructure package will be tougher than their scramble to pass stimulus.

(1) Democrats want to pay for at least some of it

The entire $1.9 trillion rescue plan was deficit-financed, meaning it was not paid for and grew the debt. Many economists had been urging lawmakers to finance a package this way if it meant getting the pandemic under control and accelerating the distribution of vaccines.

However, Congress has now approved $6 trillion in emergency spending since the pandemic broke out last year, per the Committee for a Responsible Federal Budget. Many Democrats want Biden’s jobs package to be offset with tax hikes on wealthy Americans and large companies.

“At some point we’ve got to start paying for things,” Sen. Angus King, an independent from Maine who caucuses with Democrats, told Politico last month.

Biden has proposed offsetting the cost of his $2.3 trillion American Jobs Plan, just the first of his two-part package, by increasing the corporate tax rate to 28% from 21%. That has met with resistance from both Republicans and many business leaders.

(2) There is no hard deadline

Earlier this year, Democrats rushed to approve an pandemic aid package plan by March 14, the date when federal unemployment benefits were set to expire for millions of laid-off workers.

Now, there is no similar deadline hovering over the delicate infrastructure negotiations, which many in Congress expect to stretch for months. A possible date for action could be September, when lawmakers must act to fund the government and keep it open beyond the end of that month.

Speaker Nancy Pelosi has suggested she wants the House to approve an infrastructure plan by July 4. Then it would head to the evenly divided Senate, where its odds of clearing the chamber rest on centrist lawmakers like Sen. Joe Manchin of West Virginia.

(3) It’s aimed at creating jobs and growing the economy

Another key difference is the nature of the plan. The coronavirus relief package was geared to provide immediate relief to cash-strapped families and laid-off workers.

Biden’s infrastructure plan forms a pillar of his Build Back Better agenda, designed to be a series of long-term initiatives. Much of it is aimed at overhauling the economy and leveling the playing field between the wealthy and average Americans, and incorporate racial justice.

It includes provisions to create jobs through repairing roads and bridges, clean energy incentives, and substantially expanding broadband access. A follow-up plan will also include education and childcare spending.

(4) Big parts of the plan could get scrapped in the Senate

Democrats are starting to eye budget reconciliation as their likeliest course, given staunch GOP opposition to the plan’s scope and price tag. It’s a legislative tactic to pass certain bills with a simple majority of 51 votes in the Senate instead of 60.

But it has strict rules overseen by the Senate parliamentarian who mandates measures be closely related to the federal budget.

That means some parts of the plan like a paid family leave program many Democrats support could get ruled out by the parliamentarian.

Goldman Sachs projected that $700 billion could be cut from Biden’s overall proposal reported to be worth $4 trillion, leading to a final, single package worth $3.5 trillion that passes sometime between July and September.

Biden met with a bipartisan group of lawmakers on Monday, kicking off the infrastructure negotiations. He insisted after the meeting that it wasn’t just “window-dressing” and that he is willing to negotiate on aspects of the package.

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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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Secretary Pete on Biden’s remark that his infrastructure plan will create 19 million jobs – it’s more like 2.7 million

Pete Buttigieg
Secretary of Transportation Pete Buttigieg.

    • President Joe Biden said April 2 that his new infrastructure package could create 19 million jobs.
    • Transportation Sec. Pete Buttigieg clarified on Sunday that it will probably directly create 2.7 million jobs.
    • The stat came from a Moody’s report projecting 16.3 million jobs from natural growth and the $1.9 trillion stimulus.

President Joe Biden said on April 2 that his new American Jobs Plan – the first of a two-part package – could lead to the creation of 19 million new jobs.

But Secretary of Transportation Pete Buttigieg clarified on Sunday that the plan would create 2.7 million jobs – not 19 million.

In a Fox News interview with Chris Wallace, Buttigieg said he and the Biden administration “should have been more precise” when saying that the infrastructure plan would create 19 million new jobs, given that the economy was already on track to add millions of new jobs from natural job growth and the $1.9 trillion stimulus package.

“It will create 2.7 million more jobs than if we don’t do it, and that’s very important because there are people on this network and others saying with a straight face that this would somehow reduce the number of jobs,” Buttigieg said.

According to Bloomberg, Biden seemed to be citing a recent Moody’s Analytics report that projects 19 million jobs could be added over the next decade if the infrastructure plan passes; however, it also estimates that 16.3 million jobs would be added over the next decade from a combination of organic job growth jobs and the already-passed American Rescue Plan.

In his remarks, Biden also said that almost 90% of the infrastructure jobs could be filled by people without a college degree.

A March analysis from Morning Consult found that, during the coronavirus pandemic, more educated Americans saw their confidence rebound and grow. The same could not be said for lower-wage, less-educated workers, who feared for their ability to hold onto a job. Higher-educated Americans felt confident enough to ask for pay increases, the analysis showed.

Biden’s remarks were tied to the prior jobs report, which saw the economy add 916,000 jobs, far outpacing economists’ expectations of 660,000.

While different unemployment measures dropped amidst the good jobs news, the country still has a long way to go before returning to pre-pandemic levels. In a blog post, Cecilia Rouse, the chair of the Council of Economic Advisers, said there were still 8.4 million fewer jobs in March 2021 than in February 2020.

Insider’s Andy Kiersz wrote that, if the March growth rate continues, employment could reach pre-pandemic levels by January 2022. Areas like movie theaters and hotels still have a long way to go, as they continue to lag in recovery.

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Amtrak Joe: A brief look at President Biden’s long history of supporting America’s railroad

Vice President Joe Biden Amtrak Logo 2009.JPG
President Joe Biden at an event announcing funding for Amtrak as part of the American Recovery and Reinvestment Act in 2009.

  • President Joe Biden’s long political history included years of advocating for Amtrak funding.
  • Biden earned the nickname “Amtrak Joe” as he commuted between Delaware and Washington for decades.
  • The nickname hit mainstream media in 2008, starting with CNN.
  • See more stories on Insider’s business page.

When President Ronald Reagan in 1981 moved to trim $884 million from a budget used by Amtrak, Senator Joe Biden was the only member of the Senate Budget Committee to vote against Reagan’s plan.

“You can’t come back next year or the next year and change it,” Biden said, according to a report from United Press International. “Those railroads will have gone.”

Now, four decades later, Biden’s in the seat once held by Reagan. And he’s announced a $2 trillion infrastructure plan, which would include $80 billion for Amtrak. The money would go toward expanding and fixing the country’s crumbling railway infrastructure, which he’s fought in favor of for his whole career in Washington.

It’s often said that Biden’s nickname is “Amtrak Joe,” although it’s difficult to pinpoint when that nickname started to solidify.

In the late 2000s, as Biden joined Barack Obama on the presidential ticket, the nickname started popping up regularly on CNN. The first record that Insider could find of a prominent news outlet using “Amtrak Joe” was from August 2008, when CNN’s Soledad O’Brien called him by the nickname on air.

“Coming up next, more on the Washington insider who is also a proud Delaware outsider. They called him the Amtrak Joe Biden. God, I have seen him on Amtrak a lot,” O’Brien said as she threw to a commercial, according to a transcript.

The following month, The New York times published a blog post using the nickname.

We’ve combed newspaper archives dating back to Biden’s early days as a senator, pulling some of his long-ago quotes about Amtrak. Here’s a brief history of Biden’s interactions with Amtrak.

In October 1970, President Richard Nixon signed the Rail Passenger Service Act to create Amtrak, which was then called the National Railroad Passenger Corporation, according to Amtrak’s official history.

Three years later, Biden entered office.

2011 02 08T120000Z_1641923879_GM1E7281QJQ01_RTRMADP_3_BIDEN.JPG
Biden wearing aviators on a train.

During his decades in the Senate, Biden commuted home to Delaware each day via Amtrak to be home with his sons at night. CNN estimated he took about 8,000 round trips on the same route.

Throughout the 1980s, Biden’s name popped up in budget stories about Amtrak. He often butted heads with Reagan about railroad spending. In May 1985, for example, Reagan had proposed slashing Amtrak’s budget. Biden at the time said the cuts were “a creeping regionalism,” according to The Providence Journal.

“I’m really beginning to wonder if we’re seven regions or one country,” he said. “Why should we help? I’ll tell you why we should help: We’re Americans. A simple reason.”

In 1987, when Biden launched his bid for the Democratic nomination for president, he chose a Delaware train station as his backdrop, according to UPI.

Amtrak Acela Announcement.JPG
This artist’s 1999 rendering of the Acela.

Amtrak announced in the late 1990s that it was developing a high-speed rail for the north-east, called the Acela. Biden said it was “the single most important transportation need in America,” according to an article in the Philadelphia Inquirer.

“That would be hundreds of thousands of tons of pollution,” Biden said, according to the report. “Amtrak is important not only because it helps our quality of life. It literally impacts our health.”

A few years later, after Obama won the presidential election, the first and second families travelled together via the railway to the inauguration.

Bidens and Obamas on a Train in 2009.JPG
The Obamas and Bidens on their way to Washington for Obama’s inauguration in 2009.

As vice president, Biden was often sent to blue-collar states to campaign for Obama’s reelection, using the political skills he’s honed riding the train for all those years, as The Daily Beast reported in 2012.

“This is, after all, a guy famous for making friends with anyone and everyone – fellow travelers, train conductors, red caps – he crossed paths with on his old Amtrak commute from Delaware,” the magazine said.

Biden’s 2020 presidential campaign was also interwoven with Amtrak. During 2020, he travelled by train to several states, making whistle-stop speeches as he went.

Biden Speaking in front of Amtrak Train Ohio 2020.JPG
Biden speaks to supporters during a campaign stop in Ohio in 2020.

He’d planned to take a train to Washington, as he’d done with Obama 12 years earlier but cancelled the trip amid security concerns, after rioters mobbed the Capitol.

In a statement, Biden’s team said: “In the week since the attack on Congress by a mob that included domestic terrorists and violent extremists, the nation has continued to learn more about the threat to our democracy and about the potential for additional violence in the coming days, both in the National Capital Region and in cities across the country. This is a challenge that the President-elect and his team take incredibly seriously.”

When Biden and UK Prime Minister Boris Johnson held their first trans-Atlantic phone call, some of their conversation reportedly focused on a mutual love of train travel.

More recently, a few days after announcing the infrastructure deal, he said. “Imagine a world where you and your family can travel coast to coast without a single tank of gas, or in a high-speed train, close to as fast as you can go across the country in a plane.”

Amtrak Connect US Map 2021 March
Amtrak Connects US, the railway’s vision for train travel in the US in 2035.

Amtrak published a map of an expanded US rail network based on Biden’s funding proposal. Materials prepped for the announcement said the plan would bolster transportation options for diverse populations throughout the country.

The new routes include cities that haven’t before been connected to the national rail service, including western outposts like Las Vegas and Phoenix.

It would also break ground on routes throughout the southern US, including ones to Nashville, Tennessee; Montgomery, Alabama; and Macon, Georgia. Materials prepped for the announcement said the plan would bolster transportation options for diverse populations throughout the country.

“Millions of people, including large populations of people of color, do not have access to a reliable, fast, sustainable, and affordable passenger rail option. This is neither fair nor equitable,” the railway said.

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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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