When introducing his American Jobs Plan, President Biden promised it would invest “in America in a way we have not invested since we built the interstate highways and won the Space Race.”
To put that investment in perspective, the interstate highway system, encompassing 47,000 miles of roads, cost $500 billion in today’s dollars, adjusting for inflation; the Apollo Program, about $194 billion.
The price of the American Jobs Plan: $2.3 trillion.
The centerpiece of the plan, as it has been presented, is the improvement of America’s overall infrastructure, which includes vast expenditures in building or repairing 20,000 miles of roads, repairing bridges and eliminating all lead pipes and service lines in drinking water systems; offering $56 billion in grants and flexible loans to states, tribes and territories to upgrade drinking, wastewater, and stormwater systems.
There is also significant investment proposed to the energy sector, which includes expanding clean energy sector tax credits, offering block grants and increasing government purchasing power to aid the new renewable sector. It is of some note that the president mentioned the word “climate” only once in unveiling the plan, instead focusing on the impact he expects the plan will have on jobs and the economy.
For the energy sector specifically, the American Jobs Plan would provide resources for renewable natural gas, hydrogen and carbon capture, utilization and storage, as well as electrifying 20 percent of the nation’s school buses. It also dedicates $16 billion to plug old oil and gas installations and clean up abandoned mines and orphaned wells. This part of the plan will be a key element of job creation for industries and states, like coal-producing ones. Additionally, on the legislative front, Democrats on the House Energy and Commerce Committee proposed a $312 billion infrastructure bill that would devote nearly an additional $70 billion to clean energy and energy efficiency and $48.1 billion to electric vehicle deployment, clean ports and smart cities.
Opponents of the bill took issue with the overall cost, which Sen. Roger Wicker, R-Miss. said is not an infrastructure package at all, but “a huge tax increase,” and raised questions about whether the bill includes projects that have nothing to do with infrastructure.
The president’s package, as well as the proposal by House Democrats, will need Republican support, which at this point looks unlikely in the bill’s current form, as GOP lawmakers are expected to block the legislation from ever reaching the president’s desk, citing both the cost and the scope of the bill, which included $400 billion to expand Medicaid services and $213 billion to build and retrofit more than 2 million homes and commercial buildings, including community colleges, aging schools, child care facilities, veterans’ hospitals and federal buildings; it calls for one million affordable housing units to be produced or retrofitted, more than 500,000 homes for low- and middle-income homebuyers to be built or rehabilitated, and the elimination of exclusionary zoning.
Many of these goals, according to Republicans opposed to the plan, speak mostly to the president’s social agenda and feelings on the role of government. Passage of the bill, congressional watchers insist, would be greatly improved if the bill was limited to projects like roads and bridges.
The devil, though, as it usually is, is in the details, and one of these details is terminology – what is and isn’t considered “infrastructure” and what does or doesn’t belong in a national energy conversation.
Specifically, transportation gets $621 billion in the new plan, including $174 billion on electric cars; $650 billion on what is being termed “quality of life,” including expansion of homes, building, water infrastructure and Internet; and $300 billion in manufacturing and domestic production of technologies.
Impact on the Energy Sector
The plan’s effect on the energy sector, in light what the administration is calling “a carbon pollution-free power sector by 2035 and net zero emissions economy by no later than 2050,” is a hot topic within the industry.
The president’s proposal also attempts to deal how the different energy sectors in America will look in the decades to come. In West Virginia, the second-largest coal producer in the nation after Wyoming, the bill’s effects on workers would be enormous. The money allocated to clean up those “orphaned” wells, as mentioned, will be targeted to those coal workers out of work (or soon to be) by the new effort at de-carbonization. In a study conducted by Columbia School of International and Public Affairs Center of Global Energy Policy, a program to plug these wells could create more than 100,00 jobs. Additionally, if the plan’s efforts to aggressively capture carbon are successful, this, too, will save coal jobs for the near future.
The entire fate of the bill (and what it will ultimately include), moreover, may very well be in the hands of the West Virginia’s U.S. Sen. Joe Manchin, a Democrat, who said he is already concerned about its cost. To pay for the package, it raises the corporate tax rate from to 28 percent (it is currently 21 percent), closes some loopholes and eliminates some corporate deductions. Manchin said the 28 percent is too high, but said he might agree to a 25 percent tax.
For its part, the American Petroleum Institute, the largest oil and natural gas association in the country released a statement from Frank Macchiarola, API’s senior vice president for policy, economic and regulatory affairs. In it, API reiterates its opposition to tax cuts to pay for the plan and reminds the administration of the vital role of the oil and gas industry:
“We support the administration’s goal of modernizing the nation’s infrastructure – including roads, bridges, rail and ports. We also welcome the administration’s efforts to address the risks of climate change by incentivizing innovation for hydrogen and CCUS as part of this infrastructure package. At the same time, this proposal misses an opportunity to take an across-the-board approach to addressing all our infrastructure needs – including on modern pipelines. Targeting specific industries with new taxes would only undermine the nation’s economic recovery and jeopardize good-paying jobs, including union jobs. It’s important to note that our industry receives no special tax treatment, and we will continue to advocate for a tax code that supports a level playing field for all economic sectors along with policies that sustain and grow the billions of dollars in government revenue that we help generate.”