Less than a month after the passage of the American Rescue Plan Act of 2021, The White House announced yet another policy plan that could transform the U.S. economy. Dubbed the American Jobs Plan, find out what HR teams and small organizations need to know about this new proposal.
The American Jobs Plan is a new policy proposal that was issued by the Biden administration on March 31, 2021. According to the fact sheet issued by The White House, the American Jobs Plan will invest in projects that improve critical infrastructure, the workforce, and other key components of the economy. If passed, The White House estimates the proposed plan will invest about 1% of GDP per year over the next eight years and cost approximately $2.3 trillion.
According to a report in Axios, economists are generally optimistic about “the potential for economic growth this year,” thanks in large part to the American Jobs Plan. In the same story, Axios reports that finance and analytics corporation S&P Global predicts that if passed, the infrastructure plan will accomplish the following:
While the legislation has yet to be written, the Biden administration plans to include a collection of proposals that could, directly and indirectly, impact small- and mid-sized employers across the country. With that said, law firm Locke Lord LLP estimates that "[r]oughly $800 billion of the $2 trillion plan directly or indirectly increases investment in renewable energy, electric grid improvement, and climate change mitigation ...."
Some of the most notable propositions include:
The White House also announced another major policy proposal that could impact employers. Known as the Made in America Tax Plan, the proposal promises to “make sure corporations pay their fair share in taxes and encourage job creation at home.” This includes setting the corporate tax rate at 28%—a 7% increase.
The American Jobs Plan fact sheet points out that 91 Fortune 500 companies didn’t pay federal taxes in 2018 and that the Made in American Tax Plan aims to reward corporations that invest in the United States. Both of these announcements arrive on the heels of the passage of the American Rescue Plan Act of 2021 (ARPA), which was signed into law on March 11, 2021.
The takeaway? The Biden admin is moving quickly to reshape the American economy, and employers need to keep up.
Ultimately, it’s far too early in the legislative process for HR teams and organizations to act on any of the proposed policies included in the American Jobs Plan. With that said, employers should stay on top of the latest updates as the proposal is refined. If passed, adjustments to infrastructure, jobs programs, labor support, and more could impact how organizations do business.