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.

Read the original article on Business Insider

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.

Read the original article on Business Insider

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.”

Read the original article on Business Insider

Biden is trying to derail China’s effort to build the world’s fastest supercomputer needed for unstoppable missiles

China hypersonic missiles
Military vehicles carry DF-17 missiles, a weapon armed with a hypersonic glide vehicle, during an October 1, 2019 military parade in Beijing.

  • The US added seven China supercomputer entities to its economic blacklist.
  • China is using supercomputers to speed up the development of hypersonic (unstoppable) missiles.
  • The US is in a global arms race with China and Russia to build the most advanced hypersonic missile.
  • See more stories on Insider’s business page.

The Biden administration is taking steps to undermine China’s effort to build the world’s fastest supercomputer necessary for the development of advanced weapons – including nuclear weapons and hypersonic missiles.

Seven Chinese firms and government labs were placed under export controls by the Biden administration on Thursday due to their ties to China’s supercomputer development in relation to national security concerns. This means they will not be able to use technology that originated in the US without a Commerce Department license.

“These are parties that are acting in ways that are contrary to our national security interests,” a senior Commerce Department official told the Washington Post. “This is really about not having US items contribute to China’s advancement of its military capabilities.”

The firms and labs impacted include: Tianjin Phytium Information Technology (also known as Phytium), Shanghai High-Performance Integrated Circuit Design Center, Sunway Microelectronics, the National Supercomputing Center Jinan, the National Supercomputing Center Shenzhen, the National Supercomputing Center Wuxi, and the National Supercomputing Center Zhengzhou.

The supercomputer at China’s largest aerodynamics research complex, where hypersonics weapons research is underway, has used Phytium microprocessors, according to the Post. Phytium works with American software design companies, the Post said, and it will now have to get a license that’s difficult to obtain in order to keep doing business with the Chinese firm.

The US is in a global arms race with China and Russia to build hypersonic missiles, which are capable of traveling at least five times the speed of sound and designed to be virtually unstoppable. Hypersonic missiles are made to be both extraodinarily fast and maneuverable in order to evade all existing missile defense systems. Supercomputers able of rapidly performing complex calculations aid in the development of such advanced weapons.

China wants to build the first exascale computer, capable of a million trillion calculations per second, which would give it a major advantage in the race to build the most advanced hypersonic missile.

“Supercomputing capabilities are vital for the development of many – perhaps almost all – modern weapons and national security systems, such as nuclear weapons and hypersonic weapons,” Secretary of Commerce Gina Raimondo said in a statement regarding the Biden administration’s economic blacklisting of the seven Chinese supercomputer entitites.

“The Department of Commerce will use the full extent of its authorities to prevent China from leveraging US technologies to support these destabilizing military modernization efforts,” Raimondo added.

President Joe Biden has made competing with China a top foreign policy priority, which has included an emphasis on investing in research and development to counter the China’s advancements in technology and infrastructure. During a speech on his $2 trillion infrastructure proposal on Thusday, Biden warned that China is “racing ahead” of the US.

“Do you think China is waiting around to invest in its digital infrastructure or research and development? I promise you, they are not waiting,” Biden said. “But they are counting on American democracy to be too slow, too limited, and too divided to keep up the pace.”

Read the original article on Business Insider

Joe Manchin signals he could torpedo Democratic attempts to bypass Republicans multiple times in a year

Joe Manchin
In this Feb. 13, 2021, file photo Sen. Joe Manchin, D-W.Va., departs on Capitol Hill in Washington

  • Manchin suggested he may thwart Democratic attempts to bypass Republicans in Congress more than once.
  • “I simply do not believe budget reconciliation should replace regular order in the Senate,” Manchin wrote in a Post op-ed.
  • It comes as the White House weighs the path ahead for a massive infrastructure plan.
  • See more stories on Insider’s business page.

Sen. Joe Manchin of West Virginia suggested he could derail Democratic attempts to circumvent Republicans more than once this year, arguing that embarking on the path would be harmful to the nation’s future.

“We should all be alarmed at how the budget reconciliation process is being used by both parties to stifle debate around the major issues facing our country today,” the influential Democrat said in a Washington Post op-ed published on Wednesday evening.

Manchin said that drafting bills was “never supposed to be easy,” adding it was important to address the needs of both rural areas and urban communities in the months ahead.

“I simply do not believe budget reconciliation should replace regular order in the Senate,” Manchin wrote. “How is that good for the future of this nation?”

Manchin was referring to a tactic Democrats employed earlier this year to approve a $1.9 trillion coronavirus relief package without securing any Republican votes. It comes as a top Senate official delivered a ruling on Monday that may provide Democrats an opening to bypass the GOP at least twice more this year.

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

Reconciliation is governed with a strict set of rules aimed at ensuring measures are closely related to the federal budget. Using it allows Democrats to pass bills with a simple majority of 51 votes in the Senate and avoid the usual 60-vote threshold.

The White House is starting to sell its $2 trillion infrastructure plan, which includes major funding for roads and bridges, broadband, and in-home elder care among other measures.

The Biden administration outlined a corporate tax plan on Wednesday. It includes a corporate tax increase from 21% to 28%, a step amounting to a partial repeal of President Donald Trump’s tax cuts. Republicans are staunchly opposed to the business tax hikes.

That proposed tax increase recently triggered opposition from Manchin, who said last week he favored a 25% corporate rate instead. The opposition of a single Democratic senator could block the entire passage from clearing the upper chamber.

The dynamic makes Manchin a powerful figure in the Senate. Last month, he forced last-minute changes to unemployment provisions of the stimulus law, delaying votes for almost 11 hours.

Biden said on Wednesday he was open to compromise on a lower rate, though he stressed the need to pay for the plan. “I’m wide open, but we got to pay for this. I am willing to negotiate that,” he said.

Read the original article on Business Insider

The White House says it wants to pass Biden’s infrastructure package by the summer, sooner than expected

Jen Psaki
White House Press Secretary Jen Psaki.

  • The White House said it wanted to approve a massive infrastructure package by the summer.
  • “At the end of the day, the president’s red line is inaction,” Psaki said at a news briefing.
  • The timeline underscores the Biden administration’s effort to rapidly approve a massive jobs plan.
  • See more stories on Insider’s business page.

The White House said on Tuesday that it is aiming to get President Joe Biden’s multitrillion-dollar infrastructure package approved within months, an ambitious timeline that underscores the administration’s desire to quickly muscle a plan through Congress.

“We’d like to see progress by May and certainly a package through by the summer,” White House Press Secretary Jen Psaki said at a daily news conference.

“At the end of the day, the president’s red line is inaction,” she said. “He won’t tolerate inaction on rebuilding our nation’s infrastructure, something that has long been outdated. He believes we need to invest in that so we can improve the lives of ordinary Americans and make it easier to do business.”

The timeline lines up with what Democrats in Congress recently outlined. Speaker Nancy Pelosi said last week that Democrats aimed to formally assemble the package in early May.

“We look forward to writing a bill, maybe much of it in the first week of May for the infrastructure piece of it. And we’ll see when the Senate then will act upon those proposals,” Pelosi told reporters at her weekly press conference on Thursday.

The speaker of the House later added that Democrats would only advance the measure once they have “the best possible bill,” a step that gives them some room to adjust. Pelosi told House Democrats on a caucus call last week she wanted to approve a bill by July 4, though she conceded it could slip to the end of the month, according to a senior Democratic aide.

Some Democrats have eyed September as a possible deadline for action, given the need for Congress to renew a highway funding bill by then.

Biden unveiled a large $2 trillion plan last week, the first of two proposals aimed at modernizing the nation’s infrastructure. The plan contained new funds to repair aging roads and bridges, eliminate lead pipes from water systems, and set up new rural broadband networks.

It also included money to support in-home care of elderly Americans to upgrade the nation’s electric grid and steadily phase out fossil fuels to combat climate change.

The second proposal, with major spending on childcare and education, is set to be released later this month. The pair of plans will form the centerpiece of Biden’s economic agenda.

However, the package has also set off substantial GOP opposition for its large scope and proposed tax increases on multinational corporations. Republicans are also critical of the swift timeline from Democrats in recent weeks.

That opposition, however, isn’t confined to Republicans. At least two Democratic senators, including Joe Manchin of West Virginia, say major elements of Biden’s plan should be adjusted to gain their votes. Manchin said he wanted a smaller corporate tax hike from 21% to 25% instead – not the 28% rate Biden is seeking.

On Monday evening, a top Senate official ruled that Democrats could revisit an earlier budget resolution used for the $1.9 trillion stimulus package to approve another bill without Republican support. That potentially opens the door for them to implement at least two more tax-and-spending measures this year on party-line votes, which could mean they won’t need any Republican votes at all for Biden’s next signature pieces of legislation.

Read the original article on Business Insider

2 Democratic Senators are already saying Biden’s infrastructure plan probably needs to change

Joe Manchin
Sen. Joe Manchin (D-WV).

  • Democrats in the Senate are already voicing their concerns with the infrastructure package.
  • Sen. Joe Manchin says he’s concerned about the increase to the corporate tax rate.
  • And Sen. Mark Warner has “already expressed some concerns” and wants more input.
  • See more stories on Insider’s business page.

Two Democratic senators have already voiced concerns about President Joe Biden’s $2 trillion infrastructure plan.

One of them is Sen. Joe Manchin, a moderate Democrat from West Virginia who has already proven himself to be an outsized presence in the razor-thin Democratic majority. He was also a pivotal voice against the inclusion of a $15 minimum wage in the American Rescue Plan.

Now, he’s expressed his concerns with the infrastructure package. In an interview with Talkline, a West Virginia radio show, Manchin said that, “as the bill exists today, it needs to be changed.”

Regarding Biden’s proposed increase of the corporate tax rate from 21% to 28%, Manchin indicated that he doesn’t support the 28% figure and stressed that the international average is a few percentage points lower. The rate “should have never been under 25%,” he said. “That’s the worldwide average. And that’s what basically every corporation would have told you was fair.”

When asked if he would not support a bill that raises the corporate tax rate from 21% to 28%, Manchin said: “Well, the bill basically is not going to end up that way”

Manchin also said the bill wouldn’t be passed by reconciliation “unless we vote to get on it.” When radio host Hoppy Kercheval said “they” could pass the bill by reconciliation.

“No, they can’t. Not unless we vote to get on it,” Manchin said in response. “And if I don’t vote to get on it, it’s not going anywhere.”

Meanwhile, in a briefing on Monday, Biden said he was “not at all” worried that raising that rate would drive corporations to different countries. Treasury Secretary Janet Yellen also argued in support of a global minimum tax rate today.

As Politico reports, Manchin isn’t alone: Another Democratic senator, Mark Warner of Virginia, has also expressed concerns.

“I’ve had some outreach from the White House, but it was more heads-up than input into the development of the package,” he said, according to Politico. “So I’ve already expressed some concerns.”

Getting Democrats on board with the infrastructure package will be key to its passage, as Senate Minority Mitch McConnell has already said that it won’t get any GOP votes in the Senate. That means Democrats will likely have to compromise internally amongst themselves,

Read the original article on Business Insider

Biden’s economic advisor says America needs an updated definition of infrastructure

Cecilia Rouse, Dean of the Woodrow Wilson School of Public and International Affairs, answers a question as she sits near an exhibit titled, "In the Nation's Service? Woodrow Wilson Revisited," Sunday, April 3, 2016, at the school in Princeton, N.J. As Princeton University officials weigh whether to remove alumnus and former President Woodrow Wilson's name from its public policy school, the college is launching an exhibit meant to more fully air his legacy. The Nobel Peace Prize winner heralded as a progressive hero has also faced criticism as a racist who encouraged segregation in his administration. (AP Photo/Mel Evans)
Cecilia Rouse.

  • CEA Chair Cecilia Rouse said infrastructure needs an upgraded definition to better fit the times.
  • She told CBS News that jobs will be created from work on roads and bridges, along with research and development.
  • The GOP says Biden’s infrastructure plan focuses on too many things besides physical infrastructure.
  • See more stories on Insider’s business page.

Amidst partisan disagreements on what the word “infrastructure” encompasses, the chair of President Joe Biden’s Council of Economic Advisors, Cecilia Rouse, said on Saturday that the term itself could use an upgrade.

In an interview with CBS News, Rouse discussed how Biden’s $2 trillion infrastructure plan unveiled last week will help boost the economy and add millions of good-paying jobs. The plan includes not only funding for roads and bridges, but also $174 billion for electric vehicles, $100 billion for broadband, and additional investments that address innovation, climate change, and more.

Rouse said these kinds of investments are just what the country needs right now.

“I think it’s important that we upgrade our definition of infrastructure,” Rouse said. “One that meets the needs of a 21st-century economy. And that means we need to be funding and incentivizing those structures that allow us to maximize our economic activity.”

Funding electric vehicles is important because of the urgency of climate change, Rouse said, and the cost of inaction on the climate later is greater than the cost of acting on climate change now.

Rouse’s arguments echo the White House fact sheet released on Wednesday ahead of Biden’s unveiling of the plan. It argued that, just as the 1936 Rural Electrification Act involved a federal investment in bringing electricity to nearly every home in the US, it’s time to do the same for broadband internet and electric vehicles.

Biden said on Friday that the plan would create 19 million jobs, citing an estimate from Moody’s Analytics. Rouse said most of those jobs will be coming from “traditional infrastructure,” meaning those who will build the roads and bridges, but they will also come from research and development, which received $180 billion in the plan.

Since even before Biden officially introduced his infrastructure plan, Republican lawmakers have criticized it for doing too much and focusing on things they consider physical infrastructure, namely roads and bridges.

For example, after releasing a statement last week calling the plan “a major missed opportunity,” Senate Minority Leader Mitch McConnell said the plan will get zero GOP votes in the Senate because it’s a “Trojan horse” for liberal priorities. He also opposes the proposed $3.5 trillion in tax hikes to fund the plan.

And on Thursday, Republican Gov. Kristi Noem of South Dakota voiced her opposition to plan, saying that it funds things that don’t qualify as infrastructure, naming housing and pipes as two examples. This sparked a round of criticism online and from left-leaning media figures, who argued that pipes are a core component of any country’s infrastructure.

As Insider previously reported, Republicans and Democrats’ definitions of infrastructure may differ in part because of regional political polarization, as Democrats tend to live in cities and dense suburbs, which Biden’s plan focuses on closely. But even so, a Morning Consult/Politico poll showed that many Republican voters support these aspects of Biden’s plan, such as low-income housing.

“I don’t think you’ll find a Republican today in the House or Senate – maybe I’m wrong, gentlemen – who doesn’t think we have to improve our infrastructure,” Biden said in his speech unveiling the plan on Wednesday. “They know China and other countries are eating our lunch. So there’s no reason why it can’t be bipartisan again. The divisions of the moment shouldn’t stop us from doing the right thing for the future.”

Read the original article on Business Insider

Amtrak is being offered $80 billion for upgrades, as part of Biden’s infrastructure plan, but experts say modernizing America’s railways may cost far more

President Joe Biden boarding an Amtrak train with a mask on
President Joe Biden boards his train at Amtrak’s station in Pittsburgh.

  • As Amtrak readies a spending spree, experts say it may cost more to modernize the US system.
  • Biden last week announced $80 billion in Amtrak funding as part of his $2 trillion plan.
  • See more stories on Insider’s business page.

As President Joe Biden last week outlined the $80 billion in funding for Amtrak in his $2 trillion infrastructure package, the railway operator published a map showing all the changes it plans to make in the next 14 years.

There were high-profile new routes to Las Vegas and Phoenix in the west, and Nashville and Montgomery in the south. But experts said the most important part of the plan was the modernization of routes already in place – the ones that have been crumbling for years.

There are few who wouldn’t acknowledge that the country’s railways, both Amtrak and local ones, have fallen on hard times. The US is consistently ranked lower than other countries on its rail infrastructure. China, Japan, and other countries invested in high-speed trains in the last decades that are more efficient than anything in the US.

The most notable high-speed rail project in the US, for example, a train expected to connect San Francisco and Los Angeles, has repeatedly had its budget trimmed. That route was included in the map released by Amtrak this week, which detailed what it expected US routes to look like by 2035.

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

The US hasn’t historically put as much funding into its rail system as its European or Asian counterparts, said Allan Zarembski, a professor and director of the Railroad Engineering and Safety Program at the University of Delaware.

“This bill will certainly help – but may not be enough by itself, since it does not address the long-term issue of ongoing funding for public passenger systems,” Zarembski said on Thursday.

Biden’s plan is certain to face opposition from conservatives in congress. Senator Mitch McConnell and Rep. Kevin McCarthy both said last week that the bill was full of wasteful spending.

The bill “[f]ast-tracks $80 billion in new subsidies for Amtrak and its unions, even though Congress provided billions in aid to Amtrak last year,” McCarthy said in a statement denouncing “Bidenomics.”

McConnell said Biden’s plan was full of “sweeping far-left priorities.”

Amtrak New Jersey Tunnel Project
Amtrak workers perform tunnel repairs to a partially flooded train track bed, Saturday, March 20, 2021, in Weehawken, N.J. With a new rail tunnel into New York years away at best, Amtrak is embarking on an aggressive and expensive program to fix a 110-year-old tunnel in the interim.

Over the years, academics and researchers have published a range of reports on the US rail system, most of which came to the same conclusion: More funding would be needed to modernize them to the new global standard.

A team of researchers at George Mason University, for example, in 2019 published an analysis of trains in the Northeast US, compared with their counterparts around the world.

To make the Northeast Corridor between Washington, DC, and New York City as reliable, energy-efficient, and safe as French Alstom trains, Amtrak would have to invest $164 million per mile, the researchers wrote.

That would total $37 billion for a single US route, which wouldn’t include its yearly operating cost of $570 million. That would be almost half the spending allocated as part of Biden’s bill.

Comparing country-to-country rail networks is a difficult task, in part because good systems are dependent on geographies. Even within the US, the rail corridors have varied uses. Commuters pile into the Acela in the northeast corridor, while site-seers relax in the glass-roofed cars that wind through Glacier National Park in the northwest.

But most of the US railway routes were “legacy” systems created by 19th-century railroads that went bankrupt, said Murray Rowden, global head of infrastructure at Turner & Townsend, a New York firm.

There’s a growing investment gap between what states are willing to pay and what the railways need. A plan like Biden’s can start to make up for those budget shortfalls.

“States always have their ups and downs with their budget cycles when trying to balance their priorities, with the main focus for most transit agencies being to their infrastructure in a ‘state of good repair,'” Rowden added.

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