American construction companies receive with concern the new 2 trillion Infrastructure Plan

Madrid, May 10, 2021.- To get out of the current economic recession, it´s not only important to know what are the measures to take but also the right and effective way to carry them out. If a government announces an investment of 2 trillion dollars for infrastructure, construction companies should be very happy. However, this hasn´t happened in the United States. Below are the details of the new Infrastructure Plan, and then the reaction of the construction companies.

With a $2 trillion spending proposal that dwarfs both the New Deal and the build-out of the American interstate highway system, President Joe Biden provided long-awaited details for a massive infrastructure plan that touches on everything from airports to highways, clean drinking water to revamped electric grids, school construction to public transit and clean energy to bolstered broadband deployment. Biden’s “American Jobs Plan” carves out $621 billion for transportation infrastructure; $689 billion for buildings and utilities; and $500 billion for worker training, research and development and domestic manufacturing initiatives. Noting that public domestic investment as a share of the economy has fallen 40% since the 1960s, the White House proposed to pay for the plan over 15 years primarily by hiking the corporate tax rate to 28% from 21%, a move that would partially erase former President Donald J. Trump’s tax reform legacy.

On the transportation front, the proposal includes:

$174 billion for electric vehicle incentives
$115 billion for roads and bridges
$85 billion for public transit
$80 billion for passenger and freight rail
$50 billion in disaster resilience of infrastructure
$25 billion for airports
$20 billion to improve road safety
$20 billion to mitigate infrastructure impact on underserved communities
$17 billion for waterways and ports

For buildings and utilities, the plan includes:

$213 billion for affordable housing
$100 billion for broadband internet
$100 billion for electric grid and clean energy
$100 billion for public schools
$66 billion for water systems
$45 billion to eliminate lead pipes
$25 billion for child care facilities
$18 billion for veterans hospitals
$12 billion for community colleges
$10 billion for federal buildings

Companies and business groups quickly responded on Wednesday with policy statements reacting to the breadth and scope of the plan. “The American Society of Civil Engineers applauds President Biden’s American Jobs Plan, a truly historic proposal for modernizing and improving the nation’s infrastructure,” said Jean-Louis Briaud, president of ASCE, which recently gave the country’s infrastructure a “C-” grade, via an emailed statement. “ASCE urges Congress and the administration to now work together to develop a comprehensive, bipartisan, infrastructure bill that will set the plan in motion — rebuilding and modernizing our infrastructure systems, while growing the economy, increasing public safety and creating jobs and more resilient communities.”

American Constructs Explain Their Concerns

The AGC (The Construction Association) has issued this statement explaining the concerns that cause the way of executing the new 2 trillion Infrastructure Plan:

“President Biden is Right to Focus on Improving a Broad Range of Infrastructure Projects, But Taxing Employers and Imposing Draconian New Labor Rules will Undermine Economic Growth. The chief executive officer of the Associated General Contractors of America, Stephen E. Sandherr, issued the following statement in reaction to the unveiling today of President Biden’s new infrastructure proposal as well as related plans to raise taxes and impose new regulatory and labor requirements on employers: “We greet the President’s new infrastructure proposal with mixed emotions. On one hand, the President is right to focus on rebuilding a broad range of aging and overburdened infrastructure and modernizing buildings. These investments will create a significant number of new construction career opportunities that traditionally pay well above jobs in other industries. Unfortunately, the President seeks to saddle these new investments with a host of labor and regulatory measures that will hurt workers and offset many of the economic benefits of these new infrastructure investments.“For example, by seeking to couple his new infrastructure proposal with the dangerous PRO Act, the President is signaling that infrastructure investments must come at the expense of labor harmony and economic certainty. That is because the PRO Act will give organized labor unprecedented abilities to disrupt all manner of economic activities, at any time, to meet their broader objectives. His justification for seeking to impose the labor measures in this proposal, that construction workers have been traditionally underpaid, is clearly wrong as even a cursory check of data tracked by the Bureau of Labor Statistics would have confirmed. “The President’s proposal to finance the new investments primarily via an increase in the corporate tax rate will likely undermine many of its economic benefits. That is because these new tax hikes will limit the ability of many employers to invest in capital improvement that will provide additional career opportunities for construction workers. The tax hikes will also undermine firms’ ability to investment in new equipment and technology and will limit America’s global competitiveness. “The most important aspect of the President’s proposal is that it once again serves as a reminder that we need to boost investments in our infrastructure. Our expectation is this proposal will prompt an important debate about the best way to make, and fund, those investments in a way that fully supports economic growth. We look forward to working with members of Congress in both parties to craft a bipartisan infrastructure proposal that will do as much to boost economic growth as it does to improve civil works and make our structures more efficient.”

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