U.S. President Joe Biden wants $2 trillion US to re-engineer America’s infrastructure and expects the nation’s corporations to pay for it.
The president travels to Pittsburgh on Wednesday to unveil what would be a hard-hatted transformation of the U.S. economy as grand in scale as the New Deal or Great Society programs that shaped the 20th century.
White House officials say the spending over eight years would generate millions of new jobs as the country shifts away from fossil fuels and combats the perils of climate change. It is also an effort to compete against the technology and public investments made by China, the world’s second-largest economy and fast gaining on the United States’ dominant position.
White House press secretary Jen Psaki said the plan is “about making an investment in America — not just modernizing our roads or railways or bridges but building an infrastructure of the future.”
Biden’s choice of Pittsburgh for unveiling the plan carries important economic and political resonance. He not only won Pittsburgh and its surrounding county to help secure the presidency, but he launched his campaign there in 2019.
The city famed for steel mills that powered America’s industrial rise has steadily pivoted toward technology and health care, drawing in college graduates from western Pennsylvania in a sign of how economies can change.
Mostly aimed at transportation
The Democratic president’s infrastructure projects would be financed by higher corporate taxes — a trade-off that could lead to fierce resistance from the business community and thwart any attempts to work with Republicans lawmakers.
Biden hopes to pass an infrastructure plan by summer, which could mean relying solely on the slim Democratic majorities in the House and the Senate.
Construction workers are pictured on the northeast cables of New York’s George Washington Bridge, which is undergoing a multi-year reconstruction. (Mike Segar/Reuters)
The White House says the largest chunk of the proposal includes $621 billion for roads, bridges, public transit, electric vehicle charging stations and other transportation infrastructure. The spending would push the country away from internal combustion engines that the auto industry views as an increasingly antiquated technology.
Another $111 billion would go to replace lead water pipes and upgrade sewers. Broadband internet would blanket the country for $100 billion. Separately, $100 billion would upgrade the power grid to deliver clean electricity. Homes would be retrofitted, schools modernized, workers trained and hospitals renovated under the plan, which also seeks to strengthen U.S. manufacturing.
Could spur economy
The new construction could keep the economy running hot, coming on the heels of Biden’s $1.9 trillion coronavirus relief package — economists already estimate it could push growth above six per cent this year.
Separately, Biden will propose in the coming weeks a series of soft infrastructure investments in child care, family tax credits and other domestic programs, another expenditure of roughly $2 trillion to be paid for by tax hikes on wealthy individuals and families, according to people familiar with the proposal.
Funding the first $2 trillion for construction and “hard” infrastructure projects would be a hike on corporate taxes that would raise the necessary sum over 15 years and then reduce the deficit going forward, according to a White House outline of the plan.
Biden would undo the signature policy achievement of the Trump administration by lifting the corporate tax rate to 28 per cent from the 21 per cent rate set in a 2017 overhaul.
To keep companies from shifting profits overseas to avoid taxation, a 21 per cent global minimum tax would be imposed. The tax code would also be updated so that companies could not merge with a foreign business and avoid taxes by moving their headquarters to a tax haven. And among other provisions, it would increase IRS audits of corporations.
Critics take aim
White House officials led by National Economic Council director Brian Deese offered a private briefing Tuesday for top lawmakers in both parties. But key GOP and business leaders are already panning the package.
“It seems like President Biden has an insatiable appetite to spend more money and raise people’s taxes,” Rep. Steve Scalise of Louisiana, the GOP whip, said in an interview.
Scalise predicted that, if approved, the new spending and taxes would “start having a negative impact on the economy, which we’re very concerned about.”
The business community favours updating U.S. infrastructure, but it dislikes higher tax rates. An official at the U.S. Chamber of Commerce who insisted on anonymity to discuss the private talks said the organization fears the proposed tax hikes could undermine the gains from new infrastructure.
The Business Roundtable, a group of CEOs, would rather have infrastructure funded with user fees such as tolls.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
