An economic forecast from Moody’s Analytics released Sep. 23, 2020, found that President-elect Joe Biden’s “Build Back Better” economic plan, if enacted under a Democratic administration, would create 18.6 million jobs and result in an almost $5,000 boost in annual household income for middle-class Americans.
The Moody's forecast said Biden’s plan—which includes investments in education, social safety net, healthcare, clean energy, and infrastructure—would result in average annual gross domestic product (GDP) growth of 4.2% between 2020 and 2024, and 2.9% between 2020 and 2030. According to Moody's, the plan would achieve an unemployment rate of 4.1% by 2022.
As part of his plan, Biden proposes spending $2.4 trillion on energy and infrastructure to achieve net-zero emissions by 2050 while investing heavily in roads, bridges, green spaces, water, electricity, and universal broadband.
Let’s take a deeper dive into Biden's plans for jobs and infrastructure, what they promise to achieve, and how Biden proposes to pay for them.
- The Biden jobs and infrastructure plans are designed to eventually achieve net-zero emissions while boosting job creation and growing the economy.
- A major goal is to help small businesses while holding corporations more accountable.
- Another major goal is to address the pandemic starting on day one of the Biden administration.
- The infrastructure plan is designed to address climate change while building a new, eco-friendly infrastructure ranging from transportation to energy to automobiles and more.
- The net cost of Biden's economic plan is expected to be $2.6 trillion by 2030.
The Biden Jobs Plan
As part of his “Build Back Better” agenda, Joe Biden promises to “create millions of good-paying jobs and to give America’s working families the tools, choices, and freedom they need to build back better.”
Tax Credits/Penalties for Corporations
Biden proposes to generate new jobs for workers by:
- Offering tax credits to companies to expand their U.S. footprint and bring jobs back from overseas
- Penalizing companies that manufacture products offshore and import them back to the U.S.
Relief for Families, Small Businesses, and Communities
Additional job-related relief would come from:
- Providing aid to state, local, and tribal governments so educators, firefighters, and other essential workers wouldn't be laid off
- Extending unemployment insurance to help those who are currently out of work
- Providing financial relief for Main Street businesses and entrepreneurs to maintain and hire workers
- Putting people to work fighting the pandemic through a new Public Health Jobs Corps
National Mobilization Efforts
Biden also proposes four mobilization efforts to address what he calls “great national challenges:” These are:
- Ensuring a "made in America" future that creates and retains millions of jobs
- Building a modern infrastructure and equitable clean energy future to create good-paying union jobs
- Building a 21st-century caregiving and education workforce to elevate pay and opportunities for caregivers and teachers, and freeing up millions to join the labor force
- Advancing racial equity in America by working to close the wealth gap and investing in Black, Latino, and Native American entrepreneurs and communities
Social Contract With Workers
Biden’s plan includes an updated social contract with American workers that features higher wages, stronger benefits, and fair and safe workplaces including:
- $15 minimum wage, ending the tipped minimum wage and sub-minimum wage for people with disabilities, and providing stronger benefits for workers
- Passing the Protecting the Right to Organize (PRO) Act to make it easier for workers to organize unions and collectively bargain
- Passing the Paycheck Fairness Act to ensure women are paid equally for equal work
- Passing universal paid sick days and 12 weeks of paid family and medical leave
- Providing a public healthcare option and lowering costs for care and for prescription drugs
The Biden Infrastructure and Clean Energy Plan
It’s impossible to separate Biden's energy and infrastructure plans. His proposed $2.4 trillion investment is pointedly designed to achieve an "equitable clean energy future" and net-zero emissions all while building roads, bridges, and more.
The Biden plan invests in nearly every facet of transportation infrastructure including:
- The repair of highways, bridges, and roads to include smart roads that use sensors and control devices to achieve efficiency and better safety
- Increasing Army Corps of Engineers funding
- Rail systems that reduce pollution, slash commute times, and spur investment in newly connected communities
- Municipal transit to include light rail, improved bus lines, and micro-mobility devices such as e-scooters and bicycles
Made in America
- Federal procurement of an array of products made by American workers from clean vehicles to steel to critical medical supplies
- R&D funding directed to 5G, artificial intelligence, biotechnology, and clean energy, among others
Biden's energy goals include plans to shift energy sources to electricity and clean fuels to help reduce air pollution for commuter trains, school and transit buses, ferries, and passenger vehicles. Other energy goals include:
- 500,000 electric vehicle charging stations
- New battery-storage and transmission infrastructure
- Next-generation electric grid transmission and distribution systems
- Increased research in technology that captures carbon and then permanently sequesters or utilizes that captured carbon
- Ensuring access to green hydrogen at the same cost as conventional hydrogen
- Investing in the repair of water pipelines and sewer systems
- Replacement of lead service pipes
- Upgrading of treatment plants
- Integration of efficiency and water-quality monitoring technologies
- Protecting watersheds and clean-water infrastructure from man-made and natural disasters
- Increase economic opportunity through virtual collaboration
Other planned infrastructure improvements include:
- National broadband to provide universal, reliable, affordable high-speed internet to all Americans
- Upgrading 4 million buildings and weatherizing 2 million homes over four years
- Energy upgrades of homes, offices, warehouses, and public buildings
- Direct cash rebates and low-cost financing to upgrade and electrify home appliances, install more efficient windows, and cut residential energy bills
- Modernizing schools and early learning facilities in line with the Rebuild America's Schools Act
- Constructing 1.5 million homes and public housing units to address the affordable housing crisis
Paying for Biden’s Economic Plan
Infrastructure spending from 2021–2030 would total $2.4 trillion, nearly a third of the $7.3 trillion total spending proposed by Biden during that period.
Broken down, Biden proposes spending $900 billion on transportation, $700 billion on "Made in America," $490 billion on clean energy, and $300 billion on other infrastructure.
Biden plans to help pay for his plans, in part, by reversing some of Trump’s tax cuts for corporations and for individuals making more than $400,000 per year. He is also counting on the creation of millions of new jobs and achieving full employment to increase tax revenue to help foot the bill.
After accounting for the benefits of a stronger economy resulting from Biden's policies, Moody's projects the increase in the total deficit by 2030 would be $2.6 trillion on a dynamic basis.