US Congress Approves Biden Infrastructure Package After Months of Deadlock

After months of deadlock within the Democratic Party, the US Congress approved the $1.2 trillion ($6.65 trillion) infrastructure package proposed by the government of Joe Biden. One of the largest public investment plans in the country in decades, the initiative will allocate resources to modernize roads, bridges, transport, airports, railways and water, energy and internet supply networks.

The project was approved this Friday (5), around 11:20 pm (already 12:20 am on Saturday 6, in Brasília). There were 228 votes in favor and 206 against, with 13 Republicans voting in favor of the measure and 6 Democrats, against.

That’s Biden’s main achievement in months, after a series of setbacks, such as the chaotic withdrawal of troops from Afghanistan, that have undermined his popularity. The bet is that the new investments will heat up the economy, generate thousands of jobs and lead the country to advance in the transition towards a less polluting economy.

The Democrat’s relief was not complete, however, as another important part of his platform, a package of social and environmental investments estimated at US$1.75 trillion (R$9.7 trillion), is still under review. Biden said he is confident it will be approved by the week of November 15th. Until then, the political knot must not be untied altogether.

One of the factors that motivated Democrats to act on the bills this week was the poor results in state elections on Tuesday (2). The party lost control of Virginia to the Republicans and won a narrow victory in New Jersey, where Governor Phil Murphy was re-elected with an advantage of about 60,000 votes.

The infrastructure plan foresees $110 billion in new investments in roads, bridges and other road works. Government data show that 278 thousand km of highways and 45 thousand bridges are in poor condition, with problems such as holes in the asphalt, infiltration and rust in the structures.

In the area of ​​climate change, the plan foresees US$ 50 billion to combat and prevent droughts and floods, US$ 7.5 billion to expand the electric vehicle charging network and another US$ 5 billion to purchase electric school buses and hybrids.

There will be investments of US$ 66 billion in the railway sector and US$ 39 million in public transport. This is expected to help reduce the use of combustion vehicles, which are more polluting. The package also intends to renew and expand the water, energy and fast internet networks, to avoid supply failures.

This Saturday (6), Biden praised the text. “It’s no exaggeration to say that we’ve taken a monumental step as a nation. We’ve done something that was long overdue, that was talked about for a long time in Washington but never done,” he said, calling the package “one for this generation.”

“For those at home who feel left behind and forgotten in a rapidly changing economy: this project is for you. Most of the thousands of jobs created will not require a college degree.” According to the president, he should hold a ceremony soon for the signing that formalizes the package, with thanks to those who made an effort to get it approved.

The plan had passed the Senate in August, with support from Republicans, but was held up for three months in the House by an impasse between the Democrats themselves. Biden’s party has a majority in the House, but it took weeks to reach an internal agreement between the progressive and moderate wings.

The most left-wing parliamentarians defended that the infrastructure package would only be approved if the social investment plan, dubbed BBB (Build Back Better, rebuild better), was also voted. But the moderates wanted to approve the infra plan first.

They say they are uncomfortable with the rise in public spending, claiming that very robust packages could increase the fiscal deficit, generate inflation and delay the post-pandemic recovery. Progressives and Biden believe the opposite: that investments will generate jobs and boost the economy. And they say the BBB’s spending will be funded by new taxes for big corporations and millionaires

This Friday (5), the progressive wing agreed to vote in favor of the infrastructure package after five moderate Democratic deputies, who were questioning the BBB, signed a term in which they pledged to approve the package by November 15, once the House Budget Committee detail the expenditures of the proposal and if there are no substantial changes to what was proposed by the White House.

The agreement was negotiated throughout the day and closed at around 10 pm (11 pm in Brasília). Biden has made public and private demands in recent weeks for the plan’s progress. This Friday, he postponed a trip to Delaware and stayed late into the night calling Congressional leaders to negotiate a move forward.

The BBB has yet to pass the House and Senate. Two moderate Democratic senators, Joe Manchin and Kyrsten Sinema, who had been critical of the plan for months, changed their position after a sharp reduction in the proposal, which initially called for $3.5 trillion in spending. With this, measures such as an expansion of free access to colleges, the possibility of paid sick leave for workers and discounts on medicines were left out.

The two senators, however, have not yet given a final guarantee that they will vote for the plan being debated in the Chamber.

The current version of the BBB provides a total of US$1.75 trillion (R$9.83 trillion) in social and environmental investments and another US$100 billion (R$560 billion) for immigration-related spending. There will be US$400 billion for universal access to preschool for children aged three and four years old and expansion of children’s access to health plans.

The advance of access to preschool, which is expected to benefit 6 million families, will help women have more free time to work and study, as the high cost of early childhood education means that many mothers have to stay at home taking care of them. of children.

There will also be funds to increase access to housing and health plans, as well as aid for low-income workers. In the environmental area, there will be US$ 555 billion (R$ 3.1 trillion) for investments in the transition to clean energy, such as the adoption of electric cars, which could help the US reach the goals to reduce the emission of pollutants in the next years old.

To defray the new expenses, the government proposed adopting a 15% minimum tax on the profits of large corporations, a 1% tax on the repurchase of shares made by the company that issued them, and penalties for American multinationals that moved their headquarters to paradises. tax.

The plan also provides for a five percentage point increase in the tax on personal income above US$ 10 million (R$ 56 million) per year, and by another three percentage points for those earning over US$ 25 million (R$ 140 million) .

With this, the expectation is to raise US$ 640 billion more from very rich individuals, and US$ 814 billion from corporations, between 2022 and 2031, according to an estimate by the Congressional Tax Commission.

If approved in full, the packages will be the largest set of social investments made in decades in the US and could help to reduce social inequality, one of the themes of Biden’s presidential election campaign. And they will also be able to boost Democratic candidates in midterm elections scheduled for November 2022.

With the current wear of the president, there is fear of a bad result in the election, which could lead the party to lose control of the Chamber and Senate, which is now assured with narrow margins.

Biden’s packages

Infrastructure

Status: approved in Congress, awaiting presidential approval

Includes:

• $110 billion for new projects and repairs to roads, bridges and road structures
• US$66 billion for rail transport, cargo and passengers
• $39 million for public transport in cities
• $11 billion for traffic safety, such as the prevention of being run over
• $7.5 billion to expand the charging network for electric vehicles
• $5 billion to buy new electric school buses
• $1 billion to recover communities that were degraded by the proximity to roads
• $25 billion for the airport sector
• $17 billion for the port sector
• $50 billion for combating and preventing droughts and floods
• $55 billion to modernize the water supply
• $73 billion to improve electricity transmission networks
• $65 billion for new fast internet networks
• US$21 billion for environmental recovery of degraded areas, such as former industrial districts

BBB (Build Back Better)

Status: under debate in the Chamber. If approved, proceeds to the Senate

Initial proposal provides for:

• $555 billion to combat climate change, as incentives for less polluting energy sources
• $400 billion to universalize access to school for children aged three and four; the measure should serve more than 6 million children and guarantee resources for the first six years of the program
• $200 billion in rebate or tax credits for families with children; valid for one year
• $165 billion to reduce health care spending and expand access to free, low-cost plans (Medicaid and Medicare)
• $150 billion to expand access to care for the elderly
• $150 billion to expand access to affordable housing; includes the construction of 1 million homes
• $100 billion for immigration services, to be used to speed up the analysis of visas and asylum applications, among other measures
• $40 billion for worker training and higher education grants