The president will formally announce the infrastructure plan today in Pittsburgh. It goes big on electric cars.
President Joe Biden is set to unveil a new legislative priority under his administration: infrastructure. Ahead of a formal event scheduled to take place in Pittsburgh Wednesday, the White House released a fact sheet detailing what's included in the plan, which carries a $2.25 trillion price tag. Officially called the American Jobs Plan, it calls for point-of-sale rebates when buying a new electric vehicle and includes funding for 500,000 EV charging stations.
Point-of-sale rebates would, frankly, be a huge deal. Effectively, the US government would allocate funds for car buyers purchasing a new EV. Today, buyers can take advantage of a $7,500 federal tax credit for qualifying electric cars and plug-in hybrid vehicles. But they don't see the reimbursement until they file taxes the following year -- and only if they paid more tax than the credit. Direct rebates would make EVs cheaper for all buyers right as they sign on the dotted line. The White House fact sheet didn't specify how much it targets for each rebate, or if we'll see a sliding scale like the child tax credit system. It's also not clear if the rebates would coexist with the $7,500 tax credit, or if this plan would replace the current system.
There is one big catch, however. The program would only apply to American-made EVs. If, say, an automaker builds an EV in Europe and sells it at a US dealership, it's a no go. So far, it appears a foreign automaker building an EV in the US would still qualify and this wouldn't be an exclusive benefit to US automakers.
As to infrastructure, the American Jobs Plan includes funds to build 500,000 EV charging stations across the US by 2030 "while promoting strong labor, training, and installation standards." The legislation would create grants and incentive programs for state and local governments, as well as private companies, to meet the goal. And to address the hot topic of the EV supply chain, Biden's proposal also allocates funds to help companies and automakers retool their facilities to focus on battery production and raw material refinement. This specific portion targets China directly; in 2019, the country accounted for 80% of the world's total output of advanced battery raw materials. The UAW and automakers this week urged the Biden administration to prepare the US supply chain to better compete.
The total cost for these specific proposals is $174 billion, according to the White House.
The plan doesn't stop at electrifying the US fleet of personal vehicles. The proposal asks for $80 billion to repair Amtrak lines and another $85 billion to give freight and passenger train lines a shot in the arm to expand usage across the US. Another $105 billion would go directly to repairing "24,000 buses, 5,000 rail cars, 200 stations, and thousands of miles of track, signals, and power systems in need of replacement," the White House said.
Additional parts of the plan address building modern infrastructure in a more resilient fashion to address climate change, repairing and replacing thousands of outdated bridges across the US and "modernizing" 20,000 miles of highways, roads and main streets. Under the proposal, the government would also allocate billions to support road safety and expand access in cities for pedestrians and cyclists.
To pay for the infrastructure plan, the Biden administration proposes raising the US corporate tax rate from 21% to 28%. The Trump administration's Tax Cuts and Jobs Act dropped the rate from 35% to a flat 21%, effective in 2018. The American Jobs Plan would also end subsidies for fossil fuel companies.