New 2022 $6 Trillion Budget to Boost Infrastructure, Jobs, and More
On Friday, May 28, 2021, President Joe Biden proposed a $6 trillion budget as part of his administration’s ongoing effort to restructure the American economy. From the American Jobs Plan and the American Families plan to so much more, here’s what employers need to know about the budget proposal.
New Federal Budget Will Invest in American Economy
The New York Times reported on Friday, May 28, 2021, that President Biden proposed a $6 trillion budget that “would take the United States to its highest sustained levels of federal spending since World War II.” This proposal is for fiscal year 2022 and includes spending and tax plans that, if approved, will impact the economy through the next decade. It includes major investments in infrastructure, education, jobs, and more.
Bolstered by the previously announced American Jobs Plan and the American Families Plan, the new budget will be funded by increasing taxes on corporations and high-earning taxpayers. As CNBC put it, one of the primary goals of this approach is to expand the country’s social safety net for working families and modernize its infrastructure.
Recap: What is the American Jobs Plan?
The American Jobs Plan is a policy proposal that was issued by the Biden administration on March 31, 2021. According to the fact sheet issued by The White House, this policy proposal plans to 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. Some of the most notable propositions in the plan include:
- Infrastructure Upgrades and Updates: The Biden admin wants to modernize 20,000 miles of highways and other roadways. It also aims to fix the 10 “most economically significant” bridges that need to be reconstructed and repair 10,000 smaller bridges, as well as replace buses and railcars, repair and renew stations and airports, and expand other forms of transportation into communities.
- High-Speed Broadband Access: The White House wants to bring affordable high-speed broadband to every American, which includes rural communities that currently lack access to reliable and fast internet.
- Renewed Electric Grid: The American Jobs Plan also promises to employ hundreds of thousands of people to lay transmission lines, cap orphan oil and gas wells, and renew the electric grid. The proposal plans to lower energy bills for middle-class Americans and improve air quality while shifting to 100% carbon-free electricity by 2035.
- Modernized Homes and Commercial Buildings: Another jobs-builder, the Biden admin wants to build, preserve, and retrofit approximately 2 million homes and commercial buildings to make them more energy-efficient, accessible, and affordable. This also includes plans to modernize school and childcare facilities.
- Increased Wages and Benefits for Home Care Workers: Another component of the plan is to invest in new and better jobs for caregiving workers.
- Revitalized the U.S. Manufacturing Base: In addition, the American Jobs Plan aims to secure the American supply chain, invest in research and development, and train workers for “the jobs of the future.”
- Enhanced Support for Labor Unions and Collective Bargaining: Biden has already voiced plenty of support for unions by backing the Protecting the Right to Organize Act (PRO Act), which passed the U.S. House of Representatives in March 2021. The American Jobs Plan would likely either reinforce the PRO Act (if signed into law) or shore up protections for workers who want to join a union.
Recap: What is the American Families Plan?
Announced in late April 2021, the American Families Plan (AFP) is a new policy proposal issued by the White House that plans to expand certain economic benefits for working parents and their children. The proposed investments include:
- Add at Least Four Years of Free Education: The plan will invest in early childhood education by offering universal, free preschool to all 3- and 4-year-old children. It will also provide Americans with two years of free community college and make investments that lower the costs for low- and middle-income students to attend college.
- Extend Tax Cuts that Benefits Lower- and Middle-Income Workers and Families: The proposal promises to extend the tax cuts included in the American Rescue Plan Act (ARPA), including the expanded child tax credit (CTC), the dependent care tax credit increase, and more.
- Implement New Paid Leave Program: The comprehensive and universal system would allow workers to take the time off needed to better manage the health of their families.
More broadly speaking, the AFP is part of the Biden administration’s approach to reshape and recharge the American economy. Other policy proposals like ARPA and the American Jobs Plan are designed to inject trillions of dollars into the U.S. system, from private industry to federal systems and more.
The proposed goal? To prepare American workers, families, industries, and infrastructure for the future.
What’s Next for Biden’s New Budget Proposal?
As AP acknowledges, this plan is only a proposal until Congress decides to implement it “through tax and spending legislation and annual agency budget bills.” Still, the Democrats hold a slight majority in both the Senate and House of Representatives, meaning that the White House can and probably will implement some of the proposed tax plans.
Congress won’t begin reviewing the budget until at least June 2021. With this in mind, employers and HR teams need to keep a close eye on budget developments, as some spending and taxation plans may impact staff or operations.
Subscribe to the BerniePortal blog newsletter to stay up-to-date on these developments and other HR best practices.
Between returning to the office, hybrid work opportunities, out-of-state employees,...
After the COVID-19 pandemic forced many organizations to shift their operations online...
Thousands of restaurants across the country continue to struggle with the economic...