Joe Biden’s infrastructure plan is much more than that

In Joe Biden’s mouth, “infrastructure” is a deceptively dry word. The US president’s plan to spend around $2tn on the stuff includes $400bn on care for the elderly and people with disabilities. $100bn will go on job training for disadvantaged groups. And this is before the second tranche of the plan, due this spring, which is expected to enhance childcare and rights to paid leave.

This is not, then, just a matter of polished airports and filled-in potholes, though America’s physical infrastructure, rated 13th globally by the World Economic Forum, will receive the bulk of the money. This is a wide programme of economic reform, which encompasses education and climate change abatement. Republicans do not misrepresent the president when they say so.

The question is whether, one month after a $1.9tn fiscal aid bill, Biden is overdoing the largesse. Certainly, it is naive to treat infrastructure spending as always and everywhere a good thing. It can be misallocated, whether through innocent error or the distortions of Congressional pork barrel politics. The administration must be vigilant against both to ensure value for money. Then there is the danger of adding too much momentum to an economy that is already pulling out of the coronavirus pandemic. That concern nags at members of the president’s own party.

For all these risks and more, two features of the Biden plan commend it. One is its long view: the cash will fan out across the country over a period of eight years. It is haste that is most likely to result in white elephants and an overheated economy. How sensible to avoid it. Consider the timespan, and the $2tn cost is also less daunting.

The other virtue of the infrastructure plan is that it braves the question of funding at last. Biden’s pandemic relief was borrowed money, which helps to explain its immense popularity. No voting group or special interest was asked to sacrifice. It made for a happy start to his presidency but it was never going to be sustainable. Now, by tabling an increase in corporation tax, Biden is at least confronting the hard choices of economic management.

It is a far from ideal source of funding: companies can find ways around the tax (though Biden aims to close loopholes too) or pass it on to the public. Even as Janet Yellen, the Treasury secretary, calls for a minimum corporate tax rate around the world, lots of countries will be hoping to undercut the expensive US.

Still, all tax increases have their political and practical hazards. And if Democrats are serious about bringing about a historic turn to the left, they cannot lean forever on the crutch of borrowing. The point of a centre-left party is to persuade voters to pay for a renovated public realm and a more equitable society. In a tentative way, Biden is making a start. The mystery is whether he can indefinitely press corporations and the rich to fund his ambitions, or whether a confrontation with the upper middle class is coming.

Either way, he can count himself lucky that his predecessor was so derelict. Donald Trump promised a new round of infrastructure as US president, framing it as both an inherent good and a way of competing with a China of gleaming bridges and inter-city express trains.

In the end, he spent his political capital on unpopular tax cuts for high earners instead. There is a parallel universe in which he chose differently, honoured the economic side of populism, and scraped re-election last November. In the one we live in, President Biden is free to become America’s great builder.