Biden Breaking News, July 14, 2020

WHAT

The Biden Campaign Plan to Build a Modern, Sustainable Infrastructure and an Equitable Clean Energy Future, announced on Tuesday, July 14

WHY IT MATTERS

In his second speech on economic recovery in as many weeks, Vice President Biden Tuesday laid out his vision to tackle building a more resilient and sustainable economy in the United States. He outlined a plan to strengthen green energy and infrastructure and combat the threat of climate change, while creating American jobs. Biden described his plan as a path to tackling both the economic crisis and climate crisis.

Biden’s proposal calls for the U.S. to make a $2 trillion investment over the next four years in clean energy in transportation, electricity and building sectors to achieve a carbon-free power sector by 2035, and to achieve net-zero emissions, economy wide, by no later than 2050. He outlined the need for investments in infrastructure, the auto industry, transit system, the power sector, residential and commercial construction, the development of clean energy technology, agriculture, and conservation.

Biden’s speech focused on the economic benefits from this investment, including the creation of millions of well-paying union jobs to help expand the middle class. Within hours, Biden’s proposal received praise from the AFL-CIO, the UAW, and the IBEW.

KEY PROPOSALS  

  1. Significant Job Creation – According to Biden’s speech, millions of high-paying jobs would be created at all levels to modernize American infrastructure and transition to a clean-energy economy. These jobs would range from apprenticeships to union jobs that have built-in union protections. Biden laid out a plan to ensure that the jobs are filled by diverse, local, well-trained workers, including women and people of color.
  2. Infrastructure Modernization – Biden highlighted the need to improve the conditions of America’s roads, ports, bridges, railways, and universal broadband access. He noted that significant federal investments in these areas will reinvigorate U.S. manufacturing.
  3. Clean Energy– Possibly the plan’s largest divergence from President Trump’s infrastructure efforts is its emphasis on mitigating the effects of climate change. New energy efficiency standards, electricity conservation, building sustainable infrastructure, tax credits for electric vehicle purchases, building renovations, and the revocation of oil subsidies are all proposals included in the Biden plan. Climate change mitigation appears to be the guiding principle of many of the plan’s measures. Biden announced the goal of making the electricity sector carbon-free by 2035. The campaign argues that the reduction of carbon emissions will save small businesses and families hundreds of thousands of dollars of energy costs – creating jobs and cutting energy bills while protecting our climate.
  4. Global Leader in Clean Vehicles – Biden noted the opportunity to build 500,000 electrical charging stations and upgrade electric automobile manufacturing production with higher energy-efficiency standards will enable the U.S. to overtake China as the leader in clean vehicle production and create over 1 million jobs in the American auto industry.
  5. Environmental Justice – Biden noted the disproportionate impact of the climate crisis on underserved communities, highlighting the damage unclean water and air has had on America’s most vulnerable. He laid out a plan to implement regulations that ensure a level playing field.

OUR TAKE

Biden’s sweeping clean energy and infrastructure plan will have widespread support amongst House and Senate Democrats. While it does not go as far as some aspects of the Green New Deal, it goes further than earlier iterations of Biden’s climate policy ideas, and some prominent Green New Deal supporters like the Sunrise Movement (a group of progressive climate activists) were quick to praise it. This is a clear example of progressives influencing Biden campaign policy; Sunrise’s co-founder, and AOC, were on the Biden-Sanders climate task force, which helped shape the campaign’s clean energy plans.

The real question is how much of the Build Back Better proposals could be considered and enacted should Democrats hold the House majority and win a slim Senate majority. Biden’s climate and infrastructure vision is intended to be both aspirational and operational, with policies introduced to increase the use of renewable energy and significantly decrease reliance on natural gas and oil. While not all of Biden’s proposals would be enacted, if Democrats hold even a slim majority in the Senate, we expect the party to spend significant political capital pushing for a far-reaching domestic agenda, through multiple procedural means, including the budget reconciliation process, appropriations bills and new authorizations (in addition to numerous executive actions).

While the policy response, particularly with regard to revenue raisers, would partly be dictated by the pace and nature of the economic recovery, it is a near certainty that Democrats would look to raise the corporate tax rate and allow at least some of the individual tax rates to expire, to help pay for some of the new spending (at the end of 2025; we can look forward to hearing a lot about reconciliation and the budget baseline in 2021, under this scenario). Multiple areas of the tax code, from the corporate to individual to international sides, would be fair game. In a low interest rate environment, we can also expect a significant amount of new spending to be debt financed, under the rationale of urgently needed fiscal stimulus to help the recovery.

While we should not take every word of the Biden proposals literally, we should be taking all of the campaign’s proposals seriously. Even industries that would not be directly impacted by the Vice President’s clean energy proposals would be potentially affected as a source of revenue in this kind of policymaking environment.

WHAT’S NEXT?

This is the second economic policy announcement from the Biden campaign, all components of what the Vice President is calling the “Build Back Better” agenda. The first was last week in remarks in Scranton, PA, on his plans to spur manufacturing in the U.S. We expect a rapid drumbeat of additional policy announcements in the weeks ahead, with focus on the “caregiving economy” and racial equity, among other topics.

RESOURCES

  1. Clean Energy Plan via Biden campaign website
  2. Build Back Better Plan via Biden campaign website
  3. Video and transcript of the speech