WASHINGTON (AP) – President Joe Biden and his team have offered a hugely inflated projection of how many jobs his infrastructure plan would create, an account his press secretary corrected Tuesday. Biden has also gone beyond the facts by dismissing the potential downsides of the tax increases needed to pay for all those roads and bridges.
A look at the administration’s infrastructure sales pitch in recent days:
BIDEN, when asked if his proposal to increase corporate income tax would take American companies abroad: “Not at all … because there is no evidence of that … that’s strange.” – comments to journalists on Monday.
THE FACTS: Hardly weird. The Biden administration is aware that lower tax rates abroad could tempt US companies to move. Whether the proposed tax increase would be large enough to have that effect is another matter.
On the same day that Biden made his remarks, Treasury Secretary Janet Yellen approved a global minimum corporate tax rate precisely to prevent countries from cutting rates to entice companies to move.
Yellen said it was time to end a 30-year “race to the bottom” of nations cutting their corporate tax rates to secure an advantage. His approach suggests that the administration at least accepts the possibility that an increase in the corporate tax rate in the US could result in US multinationals moving their headquarters abroad.
Biden proposes an increase in the US corporate tax rate from 21% to 28%, to partially pay for his infrastructure proposal. President Donald Trump cut the rate 35% in his 2017 tax law.
WORK IN INFRASTRUCTURE
BIDEN, on its $ 2.3 trillion infrastructure plan: “An independent analysis shows that if we pass this plan, the economy will create 19 million jobs: good jobs, blue-collar, high-paying jobs.” – Comments from the White House on Friday.
BRIAN DEESE, Director of the White House National Economic Council: “If you just look at the analysis we’ve seen this week, Moody’s suggests it would create 19 million jobs.” – “Fox News Sunday”.
THE FACTS: That’s not what Moody’s Analytics said. The infrastructure plan is not expected to create anything close to 19 million jobs in less than a decade.
Instead, the economic consultancy estimated that nearly 16 million jobs will be created in the US by 2030 without Biden’s infrastructure plan or the $ 1.9 trillion bailout package that was approved last month. At 1.6 million a year, that would be a slow pace of job creation, below the pace of roughly 2.2 million before the pandemic.
Moody’s says the bailout plan will create about 700,000 jobs over the next decade that might not have otherwise existed, and says the infrastructure plan would create about 2.6 million over the next decade. That would total about 19 million, but with only a modest portion as a result of the infrastructure proposal.
When asked about the study on Tuesday, Biden’s press secretary Jen Psaki correctly described it:
“Moody’s conducted an analysis that showed that the economy would create 19 million jobs over the next decade if Congress passes the US Employment Plan, almost 3 million more than if it does not,” he said. “So that’s the – that’s the impact the American Employment Plan would have: 2.7 million, to be totally clear.”
TRANSPORTATION SECRETARY PETE BUTTIGIEG: “We’re going to have auto workers, unionized auto workers, I hope, making cars in one way or another. Why not have them lead the electric vehicle revolution, which by the way, there is very strong competition with China and many other places? ”. – comments Sunday on ABC’s “This Week”.
THE FACTS: This scenario hides a likely effect of the transition to production of many more electric vehicles: fewer car manufacturing jobs.
It doesn’t take as many people to build an electric car as a gasoline one, and the jobs that would be created in these new factories could pay less.
Electric vehicles generally have between 30% and 40% fewer parts than traditional cars and are easier to build. In addition, many jobs that make the batteries used in electric cars are non-union jobs in companies that supply automakers, rather than unionized plants run by the US auto companies themselves.
Associated Press writer Cal Woodward contributed.
EDITOR’S NOTE: A look at the veracity of the claims of political figures.
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