American Jobs Plan Calls for $213 billion in Building and RetrofittingApril 19th, 2021 by Drew Vass
With an eye on U.S. infrastructure, environmental protection and competition with China, President Joe Biden debuted the American Jobs Plan in recent weeks, calling on Congress to place significant investments into rebuilding the U.S. economy. As the second part of a presidential agenda labeled “Build Back Better,” the plan focuses on job creation and improvements to infrastructure—including several implications for door and window companies via a focus on more affordable and efficient housing. The plan also calls for significant investments into research and development (R&D) and jobs for manufacturing.
“This is the moment to reimagine and rebuild a new economy,” a fact sheet published by the administration suggests. The plan will “invest in America in a way we have not invested since we built the interstate highways and won the Space Race,” the administration says, this time aiming to “position the United States to out-compete China.” The President’s plan is designed to “unify and mobilize the country to meet the great challenges of our time: the climate crisis and the ambitions of an autocratic China.”
In support of goals for fixing highways, rebuilding bridges and upgrading airports and transit systems, the President’s proposal points out that—despite being the wealthiest nation in the world—the U.S. ranks 13th in the overall quality of infrastructure. Disparities in how those services reach certain communities is also questioned by the plan’s details, which aims to bring 40% of the resulting benefits of infrastructure investments to disadvantaged communities. Other initiatives include delivering affordable, high-speed, broadband internet access to a broader range of Americans, as too many currently lack access, the President says.
Meanwhile, amid what the President refers to as “the affordable housing crisis” and a need to improve the efficiency of housing, the plan calls for building and retrofitting more than two million homes and commercial buildings—including more than 500,000 homes specifically for low- and middle-income homebuyers.
“[The National Association of Realtors (NAR)] thanks President Biden and his administration for recognizing that housing represents a critical piece of our nation’s overall infrastructure,” says Charlie Oppler, NAR’s president. “While a lack of inventory and rising prices continue to limit opportunities for homeownership – especially for younger Americans and minority populations – policies that support nationwide housing affordability are now more important than ever.”
As Americans struggle to afford homes and home prices continue upward, millions of families submit more than half their incomes to rent, the President’s fact sheet says. As a result, his administration is calling on Congress to “help produce, preserve, and retrofit more than a million affordable, resilient, accessible, energy efficient, and electrified housing units,” through such things as targeted tax credits, formula funding, grants and project-based rental assistance. By passing the bipartisan Neighborhood Homes Investment Act (NHIA), Congress would grant $20 billion worth of tax credits to be disbursed over the next five years, resulting in approximately 500,000 homes being built or rehabilitated. In total, the President’s plan would invest $213 billion into construction and retrofitting.
While bolstering the affordability and efficiency of housing, the plan is designed to “put union building trade workers to work upgrading homes and businesses,” by upgrading homes through block grant programs, a Weatherization Assistance Program, and by expanding tax credits aimed at home efficiency. The plan also aims to revitalize U.S.-based manufacturing and supply chains, while expanding job availability. Currently, “Half the jobs in our high growth, high wage sectors are concentrated in just 41 counties,” the President’s fact sheet says, “locking millions of Americans out of a shot at a middle-class job.” Even with an increased focus on automation, “America can and must retain well-paid union jobs and create more of them all across the country,” the statement adds.
As China ranks second in global research and development (R&D) expenditures, in order to fuel higher-paying jobs, the U.S. must post significant investments to domestic R&D by contributing to researchers, laboratories and universities, the President suggests. The administration is seeking investments into domestic manufacturing, R&D and Job Training Initiatives to the tune of $590 billion, calling on Congress to provide $30 billion in additional funding for R&D activities designed to spur innovation. U.S. manufacturing currently accounts for 70% of business R&D expenditures, 30% of productivity growth, and 60% of exports, the proposal says.
“Manufacturing is a critical node that helps convert research and innovation into sustained economic growth,” the plan suggests. “America’s manufacturing industry needs to innovate, adapt, and scale to win the industries of the future.”
Another $52 billion would go toward domestic manufacturers, including through existing capital access programs. Another $50 billion would create a new office at the Department of Commerce for monitoring domestic industrial capacity.
According to the Committee for a Responsible Federal Budget, a nonpartisan, non-profit organization that aims to educate the public on issues with significant fiscal policy impact, the President’s plan has approximately $2.65 trillion in new costs concentrated over the next eight years. Over a traditional 10-year budget window, the group estimates a net increase in the federal deficit would total approximately $900 billion, while the plan appears deficit-neutral over 15 years, reducing deficits in the long-term. Estimates developed by University of Pennsylvania’s Penn Wharton Budget Model project the plan would decrease government debt by 6.4%, while decreasing GDP by 0.8% in 2050, relative to current law.