Infrastructure

President Biden and other Democrats support a broader list of what should be included in an infrastructure package than Republicans do. The Biden Administration started this year’s serious infrastructure discussion with the proposal detailed in his American Jobs Plan which includes categories of what they call “human infrastructure.” Senator Shelley Moore Capito (R-WV) and her Republican Senate colleagues led the Republican Party’s negotiations with the White House and proposed their own infrastructure package that included a narrower set of physical infrastructure categories.

Two congressional groups have each offered bipartisan proposals that include fewer categories than the American Jobs Plan but more than Senate Republicans’ plan. In the Senate, the Common Sense Coalition (CSC), a group of ten Democrats and ten Republicans led by Senators Joe Manchin (D-WV) and Susan Collins (R-ME), have addressed infrastructure.  Senators Kyrsten Sinema (D-AZ) and Rob Portman (R-OH) led the infrastructure sub-committee of that larger bipartisan Senate group that developed a package that has now been endorsed by the CSC as a whole. In the House, the Problem Solvers Caucus (PSC), a group of 29 Democratic and 29 Republican representatives led by Congressmen Josh Gottheimer (D-NJ) and Brian Fitzpatrick (R-PA) developed a bipartisan proposal (go here and here for more details on their proposal).

Most recently, President Biden announced that he has agreed with the Common Sense Coalition (CSC) on a “Bipartisan Infrastructure Framework” to guide the negotiations to finalize the details of infrastructure legislation. The agreement announced by the White House follows CSC’s more limited list of what to include in bipartisan infrastructure legislation. The categories in President Biden’s American Jobs Plan not included in the bipartisan framework are generally categories that President Biden has called “human infrastructure” like caregiving for aging Americans and those with disabilities along with hospitals for veterans. The White House has pledged to pursue these human infrastructure categories in separate legislation. President Biden further explained that this separate legislation will also include his American Families Plan. The $1.8 trillion American Families plan includes support for child care, paid leave, universal preschool, and free community college. It appears clear that this second legislative package could only pass through reconciliation, a procedural mechanism that would allow Democrats to advance it on a purely party-line basis if all 50 Senate Democrats and almost all Democrats in the House agree.

This brief breaks the discussion of what should be included in an infrastructure package into 11 categories. They are listed roughly in order from those with the greatest bipartisan agreement that they should be included to those with the least agreement.

The categories we review are the 11 included in the agreement that President Biden and the Common Sense Coalition struck.

There has been wide agreement from the start that the first five categories readily fit within the standard definition of infrastructure and should receive new investments. The initial American Jobs Plan, the initial Senate Republicans’ plan, the Common Sense Coalition Plan, and the Problem Solvers Caucus plan all include proposals for increased investment in: (1) surface transportation, which includes roads and bridges, rail, and public transit, (2) broadband, (3) water systems, (4) airports, and (5) ports and waterways.

Bipartisan negotiations have resulted in two additional categories now receiving support from all four perspectives. The sixth category we consider is water storage. At the request of Senate Republicans, President Biden agreed to include new investments for water storage. The seventh category is electric vehicles. Senate Republicans’ agreed to President Biden’s request to include funding for electric-vehicle charging stations in their revised package. Both water storage and electric vehicles are also included in the Common Sense Coalition package that President Biden now supports, as well as the Problem Solvers Caucus proposal.

President Biden’s and the Common Sense Coalition’s agreed upon framework includes the final four categories of the 11 that we consider. Each of the final four are also included by the Problem Solvers Caucus but not by Senate Republicans. In the order in which we consider them, they are: (8) power infrastructure, (9) reconnecting communities divided by previous infrastructure projects, (10) resilience to extreme weather and other climate-related challenges, and (11) remediating abandoned industrial and energy sites.

We do not review the four additional categories that were part of President Biden’s original American Jobs Plan and for which he will continue to advocate as part of the second legislative package that will include his American Families Plan.

There is significant bipartisan support for an historic increase in federal infrastructure investment. Democrats generally believe the increase should be much more than Republicans do. President Biden and the Common Sense Coalition significantly improved the prospects that bipartisan legislation will pass when they announced that they have agreed in their framework to an overall increase of $579 billion in total new spending over five years ($1.21 trillion with baseline spending). Still, many Democrats in Congress believe the number should be much higher and many Republicans believe it should be lower.

The agreement between President Biden and the Common Sense Coalition comes after months of serious negotiations. Initially, those negotiations were primarily between President Biden and Senate Republicans. President Biden’s American Jobs Plan initially called for $2.25 trillion in new infrastructure spending over ten years. In negotiations with Senate Republicans, he then reduced the proposed overall spending to $1.7 trillion (about $2.5 trillion including the baseline amount the federal government already expects to spend over that time).

Senator Shelley Moore Capito (R-WV) and her Republican colleagues in the Senate initially proposed $174 billion in new spending above the federal baseline over eight years. Their revised proposal after negotiations with President Biden includes $298 billion in total new spending over eight years ($928 billion if you include baseline spending over that period).

The Problem Solvers Caucus has proposed $619 billion in new federal spending over eight years ($1.25 trillion with baseline spending).

We review the details on the differences in how much each of the four plans propose for each of the 11 categories later in the brief.

Finally, perhaps the greatest remaining differences are about how to pay for more infrastructure spending. Two of the largest funding sources in the Bipartisan Infrastructure Framework that President Biden and the Common Sense Coalition have negotiated are (1) closing the tax gap between what is paid and what is owed and (2) repurposing unused COVID relief funds.

President Biden’s Made in America Plan is the companion to the American Jobs Plan that proposes ways to pay for the new infrastructure investments. It identifies increased corporate taxes as the primary funding mechanism. President Biden has indicated he will continue to advocate for these new revenue sources in the second legislative package that will also include his American Families Plan and the human infrastructure categories not included in the Bipartisan Infrastructure Framework. Senate Republicans’ infrastructure roadmap proposes two mechanisms to pay for new infrastructure spending that are not included in the Bipartisan

Infrastructure Framework. First, Senate Republicans suggest that those who use infrastructure bear the costs for it in the form of increased gas and diesel taxes and other user fees. Second, they propose that we streamline permitting processes to save money and make the infrastructure investments go further.

The original Common Sense Coalition proposal included user fees and taxes but they agreed to drop those in the negotiations with President Biden. The Problem Solvers Caucus proposal for how to pay for infrastructure was detailed in their 20-page infrastructure report that preceded their proposal for what to include and how much to spend. It also includes provisions from both President Biden’s and Senate Republicans’ plans, as well as other innovative mechanisms.

This brief aims to provide information that will be useful for coming to your own answers on the three big questions of what to include, how much to spend, and how to pay for it. In the first section, we first review the strongest case for an overall infrastructure package that is big both in the sense that it is broad in the range of categories to be included and large in the total amount to be spent. This first section then reviews the strongest case for an investment that is smaller both in terms of the number of categories to be included and the total amount to be spent. We also provide you with the best available evidence to help judge the claims being made in both cases.

In the second section, we review the proposed spending levels in each of the 11 categories of what could be included and the case for and against big investments in each.

The third section of the brief reviews the proposals for how to pay for increased infrastructure spending.

In the concluding section, we ask you to consider each the four infrastructure plans overall.

Along the way, we ask you to indicate your own conclusions. We ask about whether to include a given category and how much to spend on it after each of the 11 categories is reviewed in the second section. We ask you to indicate how you think we should pay for it in the third section. In the concluding section, we ask you whether you support or oppose each of the four infrastructure packages reviewed overall and whether support for infrastructure legislation should be tied to other legislation.

Deciding whether or not we should spend hundreds of billions of dollars across 11 categories of investments is a big question. To provide complete information, this brief is necessarily long. Likely, it would take you more than the 90 minutes you committed when you joined to read each part carefully. If you are willing to spend the extra time, that will be a great help as the nation contemplates such a significant investment.

If you are not able to spend more than 90 minutes, we invite you to dig in where you think it is warranted and scan the information more quickly where that feels appropriate.

Decision science suggests that with thousands of us each making our own determinations about where to investigate more deeply, the overall results will reflect the full range of information provided to a surprising degree.

To make the topic more manageable, we have critically reviewed and then summarized hundreds of pages of studies, reports, and proposals. We have also designed this brief to be easily scannable, including many graphics that quickly summarize the most relevant information.

While you’re welcome to scan some sections, all the questions are required. You will not be able to submit your responses until you have answered each question. Please scan the information, particularly the graphs, sufficiently that you can form a reasonably informed answer.

One note of caution. We all have a tendency to seek out information that confirms our prior beliefs and ignore information that challenges them. Your individual judgment, and our collective results, will be wiser if we each seek out information that challenges our existing views, as well as information that supports them.

The total amounts proposed may look different than what you have heard on the news. The reporting has been inconsistent in distinguishing between how much of each proposal is already in the current baseline of expected federal funding and how much new spending in addition to the baseline is proposed. President Biden has generally described his plan in terms of new spending and has not included the baseline in his total. Senate Republicans, in contrast, have generally included the baseline funding as part of their total proposed spending.

The press has also been inconsistent in distinguishing between the timelines for spending the money. The American Jobs Plan calls for spending the total amount proposed over the course of 10 years. The Senate Republican and the Problem Solvers Caucus plans propose eight years of spending. The Common Sense Coalition plan, now with the support of President Biden, proposes spending over a five year period.

To create an apples-to-apples comparison, we have created Figure 1. Our discussion and Figure 1 focus on the average amount of new federal spending proposed per year that is above the expected federal baseline. 

The parties have agreed to assume about $80 billion per year in baseline funding overall. Figure 1 breaks out the current baseline spending from how much each proposal would add to it. The apples-to-apples comparison then, is that President Biden’s revised American Jobs plan proposes $170 billion and the Senate Republicans’ revised plan proposes $37.7 billion. Spent over five rather than eight or ten years, the Common Sense Coalition (now supported by President Biden) proposes $115.8 billion per year.  While the Problems Solvers Caucus in the House proposes slightly more in total spending than their bipartisan Senate colleagues in the Common Sense Coalition, their proposed new spending each year comes in at a much lower  $77.3 billion because it is spread over eight years rather than five.

Objective benchmarks of the actual infrastructure need are one of the most useful ways of moving beyond supporting one proposal over another simply because of who proposes it. Figure 1 summarizes the four proposals and compares them to three benchmarks.

First, we provide a letter grade for the current condition of infrastructure. These grades are awarded by the American Society of Civil Engineers’ (ASCE) in their 2021 Report Card for America’s Infrastructure. Issued every four years, it is a frequently cited source on the state of American infrastructure. As seen in Figure 1, ASCE gives America’s overall infrastructure a grade of C- which is a slight improvement over the D+ it earned in 2017. Below that, we also provide the grades that ASCE awards for six of the 11 individual categories of infrastructure that we consider, as well as the trend line of whether the condition of each is declining, staying steady, or improving (they do not provide grades for the other five categories).

Second, we provide ASCE’s estimates of infrastructure funding needs where available as a benchmark. Figure 1 states each proposal in terms of the percentage of estimated funding needed to bring the grade up to a B.

Third, where available, we provide the current baseline levels of federal funding. Figure 1 expresses each proposal in terms of the percentage increase in federal baseline spending.

We are also including Figure 1b in this first section of the brief so that you can see an overview of what each plan proposes in all 15 categories before we turn to the category-specific section of the brief.

We start with the case for and against a large and broad infrastructure package before turning to the specific categories of proposed new spending and proposals for how to pay for it.

Specific Categories of Possible Investment

We now turn to the arguments for and against bold new infrastructure spending in each of 11 categories roughly in order of most to least bipartisan support.

When most people think of infrastructure, they think first of roads and bridges. The passenger and freight rail system and public transit are also important categories of surface transportation. We will consider surface transportation first as a whole and then examine each of three sub-categories.

The ASCE 2021 Report Card estimates that we need $122 billion per year in total new funding (including state and local) to raise the condition of our surface transportation to a B grade. President Biden’s plan would add $30.4 billion per year, which is 25% of the new funding needed and a 44% increase in federal baseline spending. The Senate Republicans’ plan would add $15.5 billion per year, which is 13% of the new funding needed and a 23% increase in federal funding. The Common Sense Coalition plan that President Biden now supports proposes $47.1 billion in new funding, which is 39% of the need and a 69% increase in federal funding. The Problem Solvers’ plan proposes $38.7 billion, providing 32% of the need and a 57% increase in federal funding per year.

The ASCE 2021 Report Card gives our roads a D grade, the same grade they earned in 2017. The nation’s bridges got a grade of C in 2021, down from a C+ in 2017. ASCE does not provide an estimate of what it would take to increase the grade of our roads and bridges to a B separate from the overall surface transportation category.

Investing in improved roads and bridges is one of the areas of greatest agreement between President Biden and Senate Republicans. Though President Biden was initially calling for substantially more than Senate Republicans, he adjusted to propose close to the same amount. President Biden’s revised American Jobs Plan proposed $13.9 billion in new spending per year and Senate Republicans propose $13.7 billion. President Biden’s plan represented a 27% increase in federal baseline funding and the Senate Republicans’ plan is a 26% increase. At $24.2 billion, the CSC plan that President Biden now supports would increase federal funding by 46%, the most of the four plans. At $20.6 billion, the PSC plan is the second most proposed and a 39% increase in federal spending.

The rail system that carries both passengers and freight in our country earns a grade of B. That is the second highest grade ASCE gave in 2021 and the same grade the rail system got in 2017. Since ASCE’s estimates for new funding need are based on what it would take to achieve a B, no additional spending is needed to achieve that for rail.

Nevertheless, all four new spending plans include percentage increases that are the largest of all categories. The White House plan proposed $8 billion in additional spending each year, a 267% increase in federal funding. Senate Republicans call for $2.8 billion in new spending on our rail system. At 92%, it is the single biggest increase in federal infrastructure spending proposed by Senate Republicans. The Common Sense Coalition proposal that President Biden now supports includes $13.2 billion, a 440% increase in federal funding. The Problem Solvers’ plan for $12 billion in new spending is a 400% increase.

ASCE gave our public transit system a D- in 2021, the same grade that it got in 2017.

Here, the difference between the White House and Senate Republicans is especially large. The Biden Administration’s plan included $8.5 billion annually in new funding for public transit, a 64% increase in federal funding. The Senate Republicans’ plan would actually reduce current funding by $1 billion, an 8% decrease in current federal funding. The CSC proposal that President Biden now backs would spend $9.7 billion, a 73% increase in federal funding. The Problem Solvers’ proposal to spend $6.2 is a 47% increase.

The newest form of physical infrastructure we consider also attracts strong bipartisan support for new investments. Democrats and Republicans agree that the accessibility of high-speed internet connections for homes and businesses is increasingly important. Because both rural areas and lower income urban areas are underserved, broadband tends to bridge the usual partisan divides.

The country’s broadband infrastructure made it into the ASCE Report Card for the first time in 2021. Because the category is so new they did not have the same metrics and comparisons as they do for other kinds of infrastructure. Consequently, they did not give it a grade or estimate how much more funding is needed. The report concluded that “American’s reliance on fast internet is only forecasted to grow in coming years.”

President Biden and Senate Republicans not only agree that broadband deserves significant new funding, they also now agree on just how much more. The American Jobs Plan originally called for $10 billion in new broadband spending per year but reduced it to $8.1 billion to match Senate Republicans’ plan. Because the Common Sense Coalition plan that President Biden now supports calls for spending the same total amount over the shorter five year time period, that plan works out to $13 billion each year in new broadband funding. The Problem Solvers Caucus calls for $5.6 billion per year in new spending.

The systems that convey water to our homes and businesses make up a fundamental category of infrastructure. In 2021, ASCE gave the nation’s water infrastructure a C-, up from the D it got in 2017. ASCE did not provide an estimate of how much new funding would be needed to improve the condition of our water infrastructure to a B separate from its estimate of $43.4 billion needed for drinking water along with wastewater and stormwater infrastructure.

The infrastructure that brings water to American homes and businesses gets among the highest proposed increases in federal funding in all four infrastructure plans. The American Jobs Plan has the largest proposal with $11.1 billion per year in new water infrastructure spending, a 370% increase. The Republican plan calls for $6 billion, a 200% increase in federal baseline spending. The CSC framework that President Biden now supports proposes $11 billion, a 368% increase. The PSC plan proposes $4.5 billion, a 150% increase.

ASCE gave the nation’s airports a grade of D+ in 2021, up from a D in 2017. ASCE estimates that $11.1 billion more per year is needed to bring airports up to a B.

President Biden’s American Jobs Plan includes $2.5 billion in new federal airports funding per year, covering 23% of the ASCE-estimated new funding need and representing a 66% increase in federal funding. At $3.2 billion, the Senate Republican plan actually calls for more. The Senate Republican plan is 29% of the additional funding need estimated by ASCE and an 84% increase in current federal funding. The Common Sense Coalition plan that President Biden now supports proposes $5 billion, an investment that would cover 45% of the need and would increase federal funding by 132%. At $1.3 billion, the Problem Solvers propose the smallest airport investment, an investment that would cover 12% of the estimated need and increase federal funding 35%.

American ports and inland waterways are another important way that we move goods in our country. ASCE gives our ports a B+, the highest grade that they gave any category of infrastructure. It is also one of the most rapidly improving categories, improving a full grade from the C+ they earned in 2017. The B+ is also beyond the ASCE target of a B for increased funding. On the other hand, our inland waterways infrastructure, much of which facilitates moving goods on the Mississippi and other major river systems, received a D+, up from a D in 2017. ASCE estimates that $2.5 billion per year is required to bring inland waterways up to a B.

The Biden Administration proposed $1.7 billion in new spending per year for both ports and inland waterways, which is 68% of the ASCE estimated need and a 94% increase in federal baseline funding. Senate Republicans call for $1 billion, which is 40% of the ASCE estimated need and a 56% increase in federal funding. CSC, now with President Biden’s support, calls for $3.3 billion, which is 130% of the need and a 181% increase in federal funding. PSC’s plan includes $1.5 billion, which is 58% of the estimated need and an 81% increase in federal funding.

Dams are built in all 50 states to store water. Dams are also built to control floods, generate hydroelectric power, irrigate, and provide recreation. The ASCE Report Card gives America’s dams a D, the same grade they received in 2017. ASCE estimates that $8.1 billion in new funding is needed each year for dams to get to a B.

President Biden and Republican Senators have now agreed that there is a need for new funding for water storage. President Biden called for $300 million in new federal funding per year, which is 4% of the ASCE estimated need and a 17% increase in federal funding. The Senate Republican plan and the Common Sense Coalition plan that President Biden now supports both include $1 billion in new funding, which is 12% of ASCE’s estimated need and a 56% increase in federal spending. The Problem Solvers Caucus proposes decreasing federal baseline spending by $100 million per year, a 3% reduction.

ASCE’s report card does not include a separate infrastructure category or grade for electric vehicles, though it does mention electric vehicle charging stations in its assessment of the electric grid. A baseline of current federal spending on electric vehicles has also not been provided.

Senate Republicans did not include investments for electric-vehicle-related infrastructure in their original proposal but have now agreed they should be included. The Common Sense Coalition and the Problem Solvers Caucus also include it. Wide differences remain among the four plans, however, over what to include in the investment and how much to invest.

The American Jobs Plan proposed $17.4 billion in new spending per year for investments in electric vehicles, most of which is divided over three sub-categories. The first sub-category arguably fits the usual understanding that infrastructure includes physical systems built to be broadly available to the public and that help the economy function efficiently. It would provide $1.5 billion per year in grants and incentives for state and local governments to build a national infrastructure of 500,000 electric-vehicle chargers. The other two electric-vehicle sub-categories reflect a broader definition of infrastructure. President Biden proposed $10 billion in new spending per year for rebates and tax incentives to encourage the purchase of American-made electric vehicles. He also proposed $4.5 billion per year to replace diesel transit vehicles with electric ones and to electrify school buses.

The latest proposal by Senate Republicans calls for $0.5 billion per year for electric vehicle charging stations.

President Biden now supports CSC’s plan for $3 billion, half of which would be for charging stations and the other half would be for low and no carbon emission buses and ferries. PSC would invest $3.1 billion for both charging stations and electric buses.

Our power grid delivers the electricity that is essential to homes, businesses, schools, hospitals, and other essential services. ASCE gives our energy infrastructure a C-, up from a D in 2017. ASCE estimates that $19.7 billion per year in new spending would be needed to get our electrical grid to a B. Baseline levels of federal spending on our power infrastructure have not been provided.

President Biden, the Common Sense Coalition, and the Problem Solvers Caucus all agree that we should invest significantly more in our electric grid. Senate Republicans propose no new funding.

The White House proposed $4.2 billion in new federal spending each year, which is 21% of the ASCE estimated need. At $14.6 billion, CSC proposes by far the biggest investment in our electric grid. CSC’s plan would cover 74% of the estimated need. President Biden now supports CSC’s bigger investment. PSC proposes $3.1 billion in new spending per year, which is 16% of the ASCE estimated need.

Today’s interstate freeways and other infrastructure projects within urban areas were usually built through existing communities to make them cost effective even though they cut the community on either side off from each other.

President Biden proposed $2.5 billion per year in new investments to reconnect communities divided by past infrastructure projects. The Common Sense Coalition, now with President Biden’s support, proposes $200 million per year. The Problem Solver Caucus calls for $1.3 billion per year.

President Biden’s plan proposed $5 billion in new funding per year for building the country’s resilience to extreme weather and climate-related disasters. The American Jobs Plan identified three sub-categories of resilience work but did not specify how much of the $5 billion each would get. First, a portion of the new funds would go to building the resilience of what everyone would agree is physical infrastructure. For example, the plan would invest in making our electric grid, roads, and rails more robust to extreme weather and rising sea levels.

Each of the remaining two resilience sub-categories in the American Jobs Plan expanded the usual definition of infrastructure. The second sub-category would invest in making food systems as well as community health and hospitals more robust and in rebuilding homes and business structures above existing codes and standards after they have been destroyed or damaged, for example, by a hurricane, fire, or flood. The third resilience sub-category in the American Jobs Plan would invest in restoring lands, forests, wetlands, watersheds, and coastal and ocean resources. These investments in the natural environment would include protection against extreme fires, sea-level rise, and hurricanes.

At $9.4 billion per year, the Common Sense Coalition, now with President Biden’s support, proposes significantly more resilience funding than the American Jobs Plan. It does not break out subcategories for that investment. PSC proposes $5.6 billion for “resiliency and nature-based infrastructure.”

Senate Republicans call for investing in the resilience of our infrastructure to extreme weather and rising ocean levels with the new spending they propose in the categories discussed above. They do not consider the rest of the resilience investments proposed in the other plans to be infrastructure.

The American Jobs plan would invest $5.6 billion, the CSC, now with President Biden’s support, would invest $4.2 billion, and the PSC would invest $5.8 billion per year in new funding for environmental remediation of several kinds. For example, all three would invest in capping old oil and gas wells and restoring and reclaiming abandoned mines. They would provide funding to remediate and redevelop former industrial and energy sites that are now idle.

All three plans also include investments in next generation industries within this broad category. For example, projects would include retrofitting old facilities to reduce carbon emissions by converting some of those emissions into decarbonized hydrogen that can be used for power generation, industrial heating, or as an industrial feedstock. Other projects would include retrofitting large steel, cement, and chemical production facilities to demonstrate effective carbon capture methods.

The brief to this point has provided information relevant to making an independent judgment about what to include in an infrastructure package and how much to spend on it. We now turn to the question of how to pay for increased infrastructure spending. Of course, the amount to be spent impacts the answer about how to pay for it. A much more ambitious plan is required to pay for the American Jobs Plan proposed $170 billion per year in new funding than for Senate Republicans’ proposed $37.7 billion per year.

The Bipartisan Infrastructure Framework that was agreed to by President Biden and the Common Sense Coalition hues closely to the Common Sense Coalition’s plan on the spending side. Fewer details have been agreed to at this point on how to pay for the more modest investments. Many or all of the funding sources in President Biden’s plan that are not included in the bipartisan package will likely be included in the separate legislation that includes human infrastructure and the American Families Plan.

We first review two of the largest funding measures that have been agreed to as part of the Bipartisan Infrastructure Framework. We then review President Biden’s proposals for how to pay for the American Jobs Plan that are not included in the bipartisan framework. Finally, we review the provisions of the Senate Republican’s funding framework not included in the bipartisan framework. Several of the plans include a number of smaller funding proposals, including some innovative ones, that are beyond the scope of this brief.

The first of two of the most significant funding sources that are included in President Biden’s and the Common Sense Coalition’s bipartisan framework is a measure to reduce the gap between what is paid and what is owed in taxes. The Bipartisan Infrastructure Framework proposes an increase in the IRS budget for making sure corporations and wealthy individuals pay what they legally owe. The amount of net revenue, after the costs of funding increased enforcement, are difficult to estimate. The Biden Administration estimates it could raise as much as $70 billion per year. The Committee for a Responsible Federal Budget estimates that increased enforcement resources overall would bring in more like $10 billion per year. The Problem Solvers Caucus also supports closing the tax gap by providing the IRS more enforcement resources. Senate Republicans do not.

A second funding source that President Biden and the Common Sense Coalition agreed to is repurposing unused COVID relief funds approved in 2020.  Senate Republicans also agree that these funds should be a source for new infrastructure spending.

The Biden Administration released the Made in America Tax Plan, a companion report to the American Jobs Plan that proposed how to pay for the new investments. In addition to closing the tax gap, the Made in America Tax Plan focuses on three additional measures that would increase the taxes that corporations pay to fund new investments in both physical and human infrastructure.

The first and single biggest measure is an increase in the corporate income tax rate from 21% to 28%. The Committee for a Responsible Federal Budget (CFRB) estimates that it would generate an average of about $85 billion per year over the ten-year period covered by the American Jobs Plan. Prior to supporting the Common Sense Coalition plan President Biden had signaled a willingness to consider an increase to 25% rather than 28%, which would generate about $50 billion in new revenue.

Second, President Biden’s plan would establish a minimum tax of 15% on the profits that corporations report to investors to curtail excessive corporate tax avoidance through various legal means. CFRB estimates this would raise an additional $10 billion per year.

Third, President Biden’s Made in America Tax plan includes five provisions to reduce how much U.S. multinational corporations shift their tax burden to other countries with lower taxes. For example, it would close the tax exemption on the first 10% of returns on foreign assets and eliminate tax deductions multinational U.S. corporations can receive when they shift production overseas. CommonSense American’s analysis of CFRB’s estimates concluded that together President Biden’s five provisions for reducing corporate tax shifting would generate about $80 billion in additional revenue per year.

In addition to suggesting that unused federal COVID relief funds be repurposed, Senate Republicans propose two additional major sources of new funding for infrastructure. 

First, Senate Republicans propose an emphasis on having those who use infrastructure bear some of the costs for increased infrastructure spending. The Problem Solvers Caucus also proposes this approach.  The Common Sense Coalition originally supported this approach as well.  However, they agreed in the negotiations with President Biden to drop this part of their plan.

Having reviewed how the four proposals answer the three core questions of (1) what should be included, (2) how much to spend, and (3) how to pay for it, we turn in this final section to considering the packages overall.