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8:17 P.M. EDT
MS. SIMONS: Hi, everyone. Thank you for joining us. This evening, we’re joined by a senior administration official to give you an embargoed preview of President Biden’s American Jobs Plan, which will create millions of good-paying jobs, rebuild our country’s infrastructure, and position the United States to out-compete China.
This call is on background, attributable to an administration official. And the contents will be embargoed until 5:00 a.m. Eastern tomorrow, March 31st.
By joining this call, you are agreeing to these ground rules. For your awareness and not for reporting, joining us this evening is [senior administration official].
You should have received an embargoed factsheet providing an overview of the American Jobs Plan. This document is also embargoed until 5:00 a.m. tomorrow.
At the end, we will open it up for a few questions. You can press the “raise hand” button, and we will try to get to your questions.
With that, I'll turn it over now to our speaker.
SENIOR ADMINISTRATION OFFICIAL: Thanks, Emilie. And thank you all for joining. In particular, thank you for who are already raising your hands. You guys are an eager bunch. Thanks for your patience tonight.
So I’m going to -- I’ll just try to provide a little bit of context for the announcement that the President will make tomorrow, and then happy to get to your questions.
So, first, just to provide a bit of context here to the American Jobs Plan that the President will roll out tomorrow:
Since really before the President took office, he has been very focused on two core issues: the pandemic -- COVID-19 -- and the economic crisis. And in the days since we’ve been here in office, we’ve made a lot of progress. We have made progress on vaccinations. We are on track to get to 200 million shots in our first 100 days, doubling the initial target that the President set. And we were able to construct and pass the American Rescue Plan.
And we've seen encouraging signs following that passage. Perhaps most significantly, most economic forecasters have now significantly increased their growth projections for 2021 to over 6 percent, which is a rate of growth we've not seen in recent memory in the United States.
But the President has always communicated an approach and a vision that rescue was just part of the economic challenge he ran -- he ran for President to address, and that recovery and the work of building back better could come not too soon. So that effort will start in earnest tomorrow with the announcement of the American Jobs Plan.
As the President will explain tomorrow, this plan should be viewed as one part of a -- of two elements, the second of which he'll talk about in the coming weeks, both of which are key to his approach to building back better from this crisis.
But the American Jobs Plan is really about focusing on how can we make a historic capital investment in America to improve our competitiveness, create millions of jobs, rebuild our infrastructure, and position our economy to face the crises and the threats we will face in the future, and finally address the climate crisis as a nation.
So I just want to give you -- you guys have the paper, and so I'm happy to take questions associated to that, but just in terms of how we're thinking about this plan, there's really four key elements.
The first is transportation infrastructure: how we move. This is investments in our roads, bridges, rails, and other elements. This is a place where the urgency and need for action has been clearly identified again and again in Washington, and we now have an opportunity to really do something about it.
The fact that we are ranked 13th in the world in infrastructure has real, tangible economic costs every day. Those delays cost our economy and they cost families.
This plan would make a historic investment in our transportation infrastructure: modernize 20,000 miles of roads, focus on economically significant bridges and also bridges around the country, double federal funding for public transit.
And re- -- as we rebuild our nation's infrastructure, focus on what we -- the infrastructure for the future, which includes the electrification of the transport system; a building out and making good on the President’s commitment to build a network of 500,000 EV charging stations around the country; replacing diesel transit vehicles; electrifying the bus fleet; and helping consumers -- helping make electric vehicles and clean vehicles affordable for consumers through tax incentives and point-of-sale rebates.
Across all of these infrastructure investments, there will be a focus on making our infrastructure of the future more resilient to climate change and meeting the President's commitment to target 40 percent of the benefits of these clean infrastructure investments to disadvantaged communities.
A second big category is how we live at home. This is modern broad -- modern infrastructure about water, Internet, our homes themselves, and the electricity that we rely on.
With respect to water, the President is setting both a bold but a very practical goal, which is every American should have access to clean water, which requires replacing all lead service lines and pipes in America. Today, 400,000 schools and childcare centers are serviced by lead pipes, even as our health experts say that there is no safe amount of lead in drinking water. This is a national project which is urgent; it's economically efficient and will create jobs. And it would help improve health and the health of our families.
Right now, you know, we've seen in this crisis families who lack access to Internet, lack access to the modern economy. Internet is the electricity of the 21st century. This plan would achieve the goal of universal access to affordable broadband in this decade. We've seen in stark terms the impact that our ailing and aging electric power system applies to our economy and to our families, costing families billions of dollars every year.
This plan would do a generational investment in upgrading and reorienting our power infrastructure in this country for the carbon-free electric future that we are -- we're headed toward, investing in transmission, in storage, in grid resilience. And it would invest in building, renovating, and retrofitting more than 2 million homes and housing units, which would put people to work in construction jobs all over the country and also address the issue of housing, access to housing, and people being able to move to jobs and afford housing as well.
In addition, significant investment in repairs of schools, community colleges, childcare facilities, federal buildings, and also our veteran hospital system. I would note that the average VA hospital is 56 years old. There is a backlog of high- efficiency projects that would help increase the health security of our veterans, put people back to work, and achieve an important national project.
The third category of this plan is investing in the care infrastructure of the country by reducing the backlog -- the waitlist for the hundreds of thousands of families who seek care for their family member or -- who is elderly or a person with disabilities, and by doing so, expand jobs in the homecare workforce.
Today, one in six of our essential healthcare workers -- disproportionately women, disproportionately women of color -- they’re out there providing the infrastructure of care that so many families rely on to work and to earn a living themselves. One in six of these workers currently work and live in poverty.
This plan would invest in upgrading the infrastructure of this -- of this part of our economy, not only creating more than a million new jobs, but also ensuring that those jobs are well paying and can provide dignity to those essential workers.
The last element of this is about investing in our innovation and R&D infrastructure. We're one of the few major economies where we've seen public investment, as a share of GDP, decline over the past 25 years. We're seeing China and other countries significantly increase their investments. And we have a moment of opportunity now, particularly as we lay bare the vulnerabilities in our own supply chains and technology infrastructure to do a transformational investment in R&D and in domestic incentives to manufacture the innovations that come from that R&D in the United States and all across America.
So the plan includes historic investments in R&D, in clean energy R&D, and providing incentives for domestic production for manufactur -- for semiconductors, for batteries in clean energy technologies, and for other areas that we identified as important to American supply chains.
As part of that, it would a major investment in workforce and training as well, including doubling the number of registered apprenticeships to make sure that our -- that Americans all over the country have access and can access these innovation jobs in the future.
So, in the aggregate, the way to think about this plan is that it's about $2 trillion in investment that would principally spend out over an eight-year period. And these are high-value investments, the investments that experts across the board have identified as contributing to addressing deficiencies, improving economic efficiency. And we think that these are investments that, as a country, we cannot afford not to make. At the same time, the President feels that the right and responsible thing is to identify how we could pay for these investments across time.
To be clear, this plan is not assuming or relying on any sort of dynamic scoring for the investment portion of the plan. Instead, it is -- we are coupling the proposal for the American Jobs Plan with a Made in America Corporate Tax Reform Plan that would offset the full cost of this plan over 15 years. That plan is centered on making our corporate tax system more competitive and encouraging domestic investment.
Today, we have a broken tax system that was made worse by the 2017 tax law. We've seen the average tax rate for U.S. multinationals, in the wake of that law, fall from 16 percent to 8 percent. The average U.S. multinational pays a tax rate of 8 percent. And that law aggravated incentives that were already embedded in our tax code to encourage production and profits to move overseas.
So the reform -- that corporate tax reform that the President is proposing would reset that to incentivize job creation in the United States and actually stop the race to the bottom of profit-shifting to tax havens by setting the corporate rate at 28 percent, which I would note is a rate that is lower than at any point in our country's history since World War Two, other than the years since 2017.
It would also reform how we tax multinational corporations by strengthening a global minimum tax and raising the rate to 21 percent, and ensuring that we're addressing how other countries tax their corporations so we stop the race to the bottom on corporate taxes.
This and other provisions would raise about a half a percent of GDP per year in corporate revenue, which would, over a 15-year period, fully pay for the investments in this plan. And I would note that over the long term, it -- we would -- it would reduce the debt because the -- those reforms would be permanent.
With that, I will pause and take your questions. I guess the last thing I would just leave you with is: I think that this plan reflects the President's commitment to recognizing the moment that we are in as an important moment to demonstrate that the United States and democracies can deliver for the people that they serve, and that the stakes of this moment are high, that the world is watching, and that this is a moment where, by moving and actually getting done something that has had broad bipartisan support in the past, we can demonstrate to the American people that the type of historic and galvanizing public investment programs we have had in the past -- but have not seen in earnest since the creation of the Interstate highway system and the Space Race in the 1960s -- can revitalize our national imagination and put millions of Americans to work right now in work that's desperately needed for the nation.
So with that, let me pause. And I am hoping that Emilie is going to call on you all because I don't know how to do that.
MS. SIMONS: Yes. Thank you. I will take it from here and quickly bring it back to you. You can press the “raise hand” button, and we will try to get to your question. I see some hands raised already, so we'll open it up now.
And just a reminder that the contents of this call are all on background, attributable to an administration official, and the embargo is tomorrow morning at 5:00 a.m.
So, first we'll go to Chris Megerian.
Q Hi, everybody. I was wanting to talk a little bit more about the legislative strategy here. Do you plan to have one bill with both the taxes and the infrastructure spending in there? And also, do you hope to use the reconciliation package to push this through Capitol Hill?
SENIOR ADMINISTRATION OFFICIAL: Sure. Thanks, Chris. So, you know, this is -- this is the beginning of a process. The President is going to lay out this plan tomorrow. He is going to describe to the nation the -- and make the case for the urgency of the moment. And we will -- we will begin and already have begun to do extensive outreach to our counterparts in Congress -- Republicans and Democrats -- to build on the plan, to listen, to solicit input, and to identify how we can move forward most effectively here. So I think that we'll get through tomorrow, and we'll focus on engaging with our congressional counterparts.
But our hope is that the issues -- I mean, the elements of this plan are -- elements of this investment package are places where we have seen a lot of enthusiasm in the past to make progress. They’re issues that are -- that have broad support among the American people. And there has been a lot of eagerness to move in Congress on them as well.
And so we thought it's an important initiative to start the process with the President being very clear that he's got a plan and that he's open to hearing what others think. But what he is uncompromising about is the urgency of the moment and the need to really deliver for the American people and make good on building back better in this moment.
MS. SIMONS: Great, thank you. Our next question will go to Molly Nagle.
Q Hi. Thanks so much for doing the call. I just wanted to follow up on the tax incentives. There's no mention of the capitals gain -- raising the capital gains tax in this proposal. Is that correct? And is that -- can you explain a little bit about why that portion that was so key to Vice President Biden's campaign tax policy is not included here?
SENIOR ADMINISTRATION OFFICIAL: Correct, the capital gains is not addressed here. The reason for that is that the focus of this plan is on -- is on corporate tax reform and reforming the corporate tax system. And we think that that is important as a matter of fairness and also important as a matter of encouraging domestic investment.
So the focus on corporate tax reform here reflects both the President's longstanding commitments on the campaign, but also a practical perspective that coupling investments in our infrastructure and improving our productive capacity and our -- and the attractiveness of the U.S. as an investment destination, coupled with corporate tax reform to actually address the fact that our corporate tax system today actually affirmatively encourages investment to move out -- and profit to move offshore -- that doing those things together would actually encourage greater domestic investment.
So that's the -- that's -- that -- I hope that gives you some of the logic behind why he will be talking about these two things in conjunction tomorrow.
MS. SIMONS: Thank you. Our next question will go to Jim Tankersley.
Q Hey, thanks so much for doing this. A two-part question; part one is very easy. How many jobs do you guys project this is going to create? And part two is kind of in the weeds, but it says the President will create a clean energy standard in here. Is that executive authority or -- is that going to be part of the bill?
SENIOR ADMINISTRATION OFFICIAL: So, on the first one, we -- this plan will create millions and millions of jobs, and we'll have more to say about that issue after tomorrow.
On the second one, this is something that we -- that is part of the President's plan and that he intends to work with Congress -- work with Congress on. This would be part of the legislative proposal to work with Congress on. That’s on the clean energy standard.
MS. SIMONS: Okay. Our next question will go to Kristen Welker.
Q Hi everyone. Thank you so much for doing this call. Can you speak to some of the, sort of, prebuttals that we've already heard from some moderate Democrats, some Republicans, who say, “Look, you just passed a $1.9 trillion relief package. Now the President is asking for another two-plus-trillion-dollar plan. Ultimately, that could jeopardize the economic growth”? These are the arguments. And there are concerns that by rolling back the Trump tax cuts, that could send businesses overseas. How do you address those concerns?
And if I could, to the President's promises of bipartisanship: If he can't get Republicans on board with this plan, does that undercut that promise that he made during the campaign?
SENIOR ADMINISTRATION OFFICIAL: Okay, Kristen, thank you. That was somewhere between a two- and a five-part question.
So I will -- let me start on the first piece of it. I think it's important to recognize that there is -- there’s a different economic logic behind the Rescue Plan and the American Jobs Plan. And so, the Rescue Plan was designed specifically to provide relief and to address the immediate economic crisis, and as a result was designed to speed relief to families and businesses, as well as provide support to bolster the vaccination program, get schools reopened, and the like.
This is a different approach; this is a multi-year investment approach. If you look at it, it's about, you know, 1 percent of GDP. We're proposing ways to offset that investment across time.
So I think that the -- on the economics, we think that there's a logic for doing these things, because as we are -- the Rescue Plan is helping to speed the recovery, bring us back to full employment faster than would otherwise be the case. The American Jobs Plan will help to invest in critical areas where we know that our productive capacity as a country is being set back, and, if we make those investments, will create more and better jobs, will address critical areas that will increase our productivity as a country, and we’ll be able to take on the escalating economic cost that the climate crisis and the increased incidence and severity of extreme weather is imposing on our economy.
So we think there's actually a compelling economic rationale for moving forward on the American Jobs Plan.
With respect to your question about the corporate tax system, I would just say the facts strongly reinforce that since the 2017 tax cut, what we've seen is greater incentive to move profit and production overseas; that the principal impact of that tax bill, in addition to encouraging stock buybacks, was to actually make it easier and more attractive for companies to shift their profits and strip their profits out of the United States.
So we have a more broken tax system that is providing greater incentive to evade the U.S. tax system and to locate production overseas. And so the opportunity is to reform the corporate tax system in a way that would maintain our competitiveness and actually encourage domestic production in the United States.
And on your last question, you know, about Republicans, this is the President's plan. He's going to lay it out. He's going to make the argument for why investing in transportation infrastructure, investing in water infrastructure, investing in broadband -- including in rural areas -- are all not only commonsense areas where we've seen and continue to see bipartisan support and, in fact, bipartisan urgence [sic] -- urging that we move forward on them, but they're also really important to people, to communities all across the country right now.
And he's going to -- he's going to make the case that he wants to -- he wants to understand if people have other ideas, they have other ideas of how to pay for it, they have other ideas of how to structure these. That's what this process is going to be about. And our hope is that we can advance the process and deliver -- you know, deliver for the American people.
His -- I think you've heard him say and he'll say again: His focus here is on delivering for the American people. And I think that this -- in this proposal you see an approach that is economically necessary, would be extraordinarily -- provide extraordinary benefits to people all over this country, and is built on ideas that have had a lot of bipartisan support inside and outside of Washington historically.
So that's where we're going to take the conversation starting tomorrow.
MS. SIMONS: All right. And thank you to everyone. We may -- do we have time for one more question?
SENIOR ADMINISTRATION OFFICIAL: Sure, let's do it.
MS. SIMONS: Okay, to Josh Boak. If you could make it quick because we are at the end of our time.
Q Sure. Thanks so much for doing the call again. Real quick: When would you expect projects to get started? And does the U.S. have the capacity in terms of workers and material to do this much construction?
SENIOR ADMINISTRATION OFFICIAL: So, you know, on your -- great questions. On your first question, you know, it really depends, and we need to go through the different proposals and provisions there.
As I mentioned, this -- at the top, this is structured as an eight-year investment package. That's not true for all of the provisions; some of them are designed to be more frontloaded and moving more quickly, particularly those that are designed as incentives, particularly on the tax side. Others are designed explicitly to provide the time to get these investments right.
And, you know, that's -- there are -- when you're doing big -- you know, big bridge projects, for example, even in a streamlined way, those are not projects that you immediately get going over the course of a month or two or three. And the planning and the design elements are really important. So there isn't a one-size-fits-all answer to your question.
But we -- but on the material side: Look, part of the economic logic of this plan, as well, is that -- and that the President will talk about tomorrow -- is that this is not just about infrastructure but it's about creating more jobs and more industrial strength here in the United States. And so when you make these infrastructure investments and you couple it with the President's commitment to buy American, what you do is you're actually pulling forward in creating demand that will help to actually accelerate new industries in the United States -- for example, for low-carbon building materials, or for components that go into electric vehicles.
And one of the explicit strategies you'll see in this proposal that the President talked about as part of his Build Back Better plan is to use the power of procurement, for example, to make large purchases of electric vehicles for the federal fleet. By doing that on a forward basis, even if the delivery timeframe is over a 12-, 18-, or 24-month timeframe, you've created a demand pull to actually strengthen the incentive to build domestic capacity. And what that means, ultimately, is jobs and prosperity here in the United States.
So we certainly think that that's actually a virtue of this -- is that by making these investments and prioritizing these projects, connected to a focus on Buy American, we can actually spur more economic activity, more job growth. And that's an explicit part of the design of the plan.
MS. SIMONS: Thank you so much for your time. And thanks to everyone. One more reminder that the contents of this call are under embargo until 5:00 a.m. tomorrow Eastern, and on background, attributable to an administration official.
Please reach out to me and others on the press team if you have any additional questions. Have a great night.
8:49 P.M. EDT |
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