The American Jobs Plan is the Biden administration’s next major bill after the American Rescue Plan that provided relief during the pandemic. It is described as “the moment to reimagine and rebuild a new economy” on the White House Fact Sheet. The agenda is to create jobs, rebuild infrastructure, and out-compete China. The originally proposed plan had a budget of  roughly 2.2 trillion dollars, including:

• $621 billion in transportation, 
• $400 billion in home care services, 
• $300 in manufacturing, 
• $180 billion in Research and Development, 
• $100 billion in workforce development, 
• $213 billion in housing, 
• $111 billion in water infrastructure, 
• $100 billion in schools and child care, 
• $100 billion in digital infrastructure, and 
• $18 billion in veteran’s hospitals and federal buildings. 

Biden proposes that the plan would be funded by a series of tax increases including corporate tax hike from the current 21% to 28% and global minimum tax from 13% to 21%, which in total would raise more than $2 trillion dollars in the next 15 years. For more on how this bill would be paid for, check out the X brief.

Opposition on Both Sides

Biden’s first proposal faced strong opposition from the Republican side that viewed the plan as “too big, too expensive, and includes too many tax increases”. One major issue is the definition of infrastructure— Biden’s plan incorporated elderly care and other social spending that the GOP opposes. McCarthy comments that the plan should only include roads, bridges, highways, airports, and broadbands. Another major issue is the tax increase. Senate Minority Leader McConnell has expressed strong views against rolling back of the 2017 tax cuts to pay for the infrastructure package. 

There is also opposition from the progressive side of the Democratic party. The Congressional Progressive Caucus says that the plan is insufficient to meet the scale of the threat proposed by climate change. Three House Democrats have also vowed to oppose the package because it does not reverse a cap on state and local tax deductions from former president Donald Trump’s tax law. 

Timeline of Negotiations

The White House is open for negotiations to reach a bipartisan deal on at least the infrastructure part of the deal and Biden is prepared to carry out the remaining part of the plan without GOP support.

On May 21, the Biden administration submitted a trimmed-down version of the infrastructure package that costs $1.7 trillion compared to the previous $2 trillion proposal. The details are not open to the public yet, but Reuters reported that it would include reduced funding for broadband, roads, bridges, and other major projects. Jen Psaki, the White House press secretary said that some components, such as investments in research and development, had been removed but would be included in other bills. 

On May 27th, a group of Senate Republicans proposed a $928 billion counter — still $1 trillion shorter than Biden’s original plan, which outlined a significant increase from the GOP’s first, five-year $568 billion proposal. The new GOP version would direct $755 billion toward traditional infrastructure—$506 billion for roads and bridges, $144 billion for public transit and rail, $56 billion for airports, $22 billion for ports and waterways, and the rest on other miscellaneous transportation-related issues. Republicans allocated $4 billion towards electric vehicle infrastructure ($170 billion less than Biden’s proposed budget on EVs). In addition, the GOP assigned $94 billion to water infrastructure like lead pipe replacement, $65 billion on broadband internet access, and $14 billion on resilience like natural disaster preparedness for at-risk communities. 

However, only $257 billion of the GOP offer is above baseline levels, which means if projected federal spending of current programs continued, only $257 of the Republican proposal would be financed through additional federal spending. Biden’s $1.7 trillion plan is entirely above current baseline levels, which is why a corporate tax increase from 21% to 28% is needed in Biden’s version. The Senate Republicans, on the other hand, suggested moving “leftover” money from the COVID-19 relief funds to finance the infrastructure plan instead of any tax increase, which Democrats strongly opposed. Much of the relief money that hasn’t been spent will be spent in the coming years on Medicaid, federal lending programs, and state and local relief programs to heal the economy and communities that were hit by the pandemic. 

On June 24th, Biden reached an agreement with a group of bipartisan Senators on a $1.2 trillion Bipartisan Infrastructure Framework. The Plan would be the largest federal investment in public transit in history, the largest federal investment in passenger rail since the creation of Amtrak, and the single largest dedicated bridge investment since the construction of the interstate highway system. There are also strong focuses on EV infrastructure, renewable energy, water infrastructure, internet access, and resilience against climate change, cyber attacks, and natural disasters. The White House published the below framework for the Bipartisan Infrastructure Framework:

	Amount (billions)
Total	$579
Transportation	$312
Roads, bridges, major projects	$109
Safety	$11
Public transit	$49
Passenger and Freight Rail	$66
EV infrastructure	$7.5
Electric buses / transit	$7.5
Reconnecting communities	$1
Airports	$25
Ports & Waterways	$16
Infrastructure Financing	$20
Other Infrastructure	$266
Water infrastructure	$55
Broadband infrastructure	$65
Environmental remediation	$21
Power infrastructure incl. Grid authority	$73
Western Water Storage	$5
Resilience	$47

The White House also published the proposed financing sources to fund the infrastructure plan, including reducing IRS tax gap, redirecting unused unemployment insurance relief funds, repurposing unused COVID-10 relief funds, and state and local investment among other sources. 

Future Developments

On June 26, Biden issued a statement following the bipartisan agreement that the removed categories in his original infrastructure plan—investments in education, health care, child care, senior housing, clean energy, and tax cuts for families—will be regrouped in his new American Families Plan. He will seek to pass the Families Plan through the process known as reconciliation even without the support of Republicans in Congress. Upon the announcement of the Bipartisan Infrastructure Framework, Biden indicated that he would refuse to sign the infrastructure bill it was sent to him without the Families Plan and other priorities including clean energy. 

On June 28th, Biden walked away from his threat to veto the infrastructure plan if it was presented to him without the American Families Plan and assuaged some Republicans by clarifying that he would sign the bill if it were passed on its own. Speaker of the House Pelosi, however, said she would not take up either proposal in the House until both get through the Senate. Senate Majority Leader Schumer plans to start votes on both measures in July.
Despite the current bipartisan progress on the infrastructure plan, the passage of the bill could still be a ways away. In the Senate, the infrastructure bill will need at least 60 votes to overcome a filibuster, which means it would require the backing of 10 Republicans and every Democrat. 11 Republicans supported the bipartisan framework, but a handful of liberal Democrats including Sen. Bernie Sanders, Sen. Ed Markey, and Jeff Merkley have signaled that they oppose the framework because it does not invest enough to address income inequality and climate change. Therefore, the Senate would need more Republican votes to offset any Democratic defect. In addition, with the August recess coming, the bill could be dragged well into the last quarter of 2021.