Factories are whirring, new apartments are being snapped up and more jobs are up for grabs. When China releases its new economic figures on Friday, they are expected to show a remarkable post-pandemic surge.
The question is whether small businesses and Chinese consumers can fully share in the good times.
China is expected to report that its economy grew by a jaw-dropping double-digit figure in the first three months of the year compared with the same period the year before. The number is widely estimated by economists to be 18 percent to 19 percent. But the growth is as much a reflection of the past — the country’s output shrank 6.8 percent in the first quarter of 2020 compared with a year earlier — as it is an indication of how China is doing now.
A year ago, entire cities were shut down, planes were grounded and highways were blocked to control the spread of a relentless virus. Today, global demand for computer screens and video consoles that China makes is soaring as people work from home and as a pandemic recovery beckons. That demand has continued as Americans with stimulus checks look to spend money on patio furniture, electronics and other goods made in Chinese factories.
in the corporate sector, where many firms have borrowed beyond their means. Many economists are looking for signs of a broader recovery that relies less on exports and the government and more on Chinese consumers to juice growth.
A slow vaccination rollout and fresh memories of lockdowns have left many consumers in the country skittish. Restaurants are still struggling to bounce back. Waiters, shopkeepers and students are not ready yet for the “revenge spending” that economists hope will power growth. When virus outbreaks occur, the Chinese authorities are quick to put new lockdowns in place, hurting small businesses and their customers.
To avoid a wave of outbreaks in February, the authorities canceled the travel plans of millions of migrant workers for the Lunar New Year holiday, the biggest holiday of the year in China.
“China’s Covid strategy has been to crush it when it reappears, but there seems to be a lot of voluntary social distancing and that’s affecting services,” said Shaun Roache, chief economist for Asia Pacific at S&P Global. “It’s holding back normalization.”
Wu Zhen runs a family business of 13 restaurants and dozens of banquet halls in Yingtan, a city in China’s southeastern Jiangxi Province. When China began to bounce back last year, more people started coming to her restaurants for their favorite dishes, like braised pork. But just as she and her employees began preparing for the Lunar New Year, a new Covid-19 outbreak prompted the authorities to limit the number of people allowed to gather in one place to 50.
“It should have been the best time of the year for our business,” said Ms. Wu, 33.
This year, Ms. Wu decided that closing the entire business over the holiday would be cheaper. “If we want to serve Lunar New Year’s Eve dinner, the labor wage for one day is three times higher than the usual time. We save more money by just closing the doors and the business,” she said. It will be the second year in a row that the restaurants shut their doors over the holiday.
Ms. Wu inherited the business from her father two years ago and employs more than 800 people. Before the pandemic, three quarters of the business revenue came from big banquets for weddings and family reunions. She said business has yet to return to normal after months of crushing virus restrictions.
The setbacks facing small-business owners like Ms. Wu are also affecting regular consumers who are jittery about opening their wallets. According to Zhaopin, China’s biggest job recruitment platform, more jobs in hotels and restaurants, entertainment services and real estate are available than a year ago. But households are still being cautious about spending.
Families continue to save at a higher rate than they did before the pandemic, something that worries economists like Louis Kuijs, who is head of Asian economics at Oxford Economics. Mr. Kuijs is looking at household savings as an indication of whether Chinese consumers are ready to start splurging after months of being stuck at home.
“More people still seem to not go all the way in terms of carefree spending,” he said. “At times there are still some lingering Covid concerns, but there is perhaps also a concern about the general economic situation.”
Many families took on more debt last year as they borrowed to buy property and to cover expenses during the pandemic. China still largely lacks the kind of social safety net that many wealthy countries provide, and some families have to dip into savings for health care and other big costs.
Unlike much of the developed world, China doesn’t subsidize its consumers. Instead of handing out checks to jump-start the economy last year, China ordered state-owned banks to lend to businesses and offered tax rebates.
Retail figures on Friday will give a better sense of where consumers are picking up their old spending habits. But data from the first two months of the year already show that consumers like Li Jinqiu are spending less and saving more.
Mr. Li, 25, who recently got married, has a one-month-old baby at home. He had planned to work for the family business, but it has been hit by the pandemic and he doesn’t think there is much opportunity for him if he stays.
“The whole family has some sense of crisis,” Mr. Li said. “Because of the pandemic and because of family business, I have a sense of crisis.”
Mr. Li said he had received a job offer in sales at a financial firm in Beijing but had delayed the start date to help take care of his newborn. He said he once borrowed to spend on items like his $150,000 Mercedes. Now he drives a $46,000 electric car and has put off buying new clothes.
Some Republicans are floating the possibility of putting forward a counterproposal that addresses more traditional infrastructure needs and removes the corporate tax increases. Senator Shelley Moore Capito of West Virginia suggested that such a proposal could be between $600 billion and $800 billion.
“I think the best way for us to do this is hit the sweet spot of where we agree, and I think we can agree on a lot of the measures moving forward,” Ms. Capito said on CNBC on Wednesday. She suggested that Democrats save proposals with less bipartisan support for the fast-track budget reconciliation process, which would allow the legislation to pass with a simple majority.
“If there are other things they want to do — they being the Democrats or the president — want to do in a more dramatic fashion that can’t attract at least 10 Republicans, that’s, I think, their reconciliation vehicle,” Ms. Capito added.
But several liberals have signaled a reluctance to whittle down Mr. Biden’s plan, with Senator Bernie Sanders of Vermont, the chairman of the Senate Budget Committee, telling reporters that the tentative price range “is nowhere near what we need.”
The Biden administration is rolling out its infrastructure plans from a position of relative strength. Voters generally give Mr. Biden high marks for his performance in office, at least in comparison with Mr. Trump’s consistently low approval ratings, and Americans are becoming more optimistic about the economy in particular. Measures of consumer sentiment have been rising in recent months; SurveyMonkey’s consumer confidence index, which is based on five questions about people’s personal finances and economic outlook, rose in April to its highest level in six months.
But views of the economy remain starkly divided along partisan lines. Confidence among Democrats jumped when Mr. Biden was elected and has continued to rise since. Republicans, who had a rosier view of the economy than Democrats throughout Mr. Trump’s time in office, have turned pessimistic since the election.
About the survey: The data in this article came from an online survey of 2,640 adults conducted by the polling firm SurveyMonkey from April 5 to 11. The company selected respondents at random from the nearly three million people who take surveys on its platform each day. Responses were weighted to match the demographic profile of the population of the United States. The survey has a modeled error estimate (similar to a margin of error in a standard telephone poll) of plus or minus three percentage points, so differences of less than that amount are statistically insignificant.
Republican senators, singed by their experience on the pandemic aid bill, responded to Mr. Biden’s gestures to bipartisanship by issuing a chilly statement saying that the last time he made a public plea to work together, “the administration roundly dismissed our effort as wholly inadequate in order to justify its go-it-alone strategy.”
In an appearance on “Fox News Sunday,” Senator Roy Blunt, Republican of Missouri, pushed the administration to negotiate an infrastructure measure that would represent about 30 percent of the $2.25 trillion being proposed, before turning to budget reconciliation for any additional spending increases.
“My advice to the White House has been, take that bipartisan win, do this in a more traditional infrastructure way and then if you want to force the rest of the package on Republicans in the Congress and the country, you can certainly do that,” Mr. Blunt said.
Importantly, Republicans have no interest in the corporate tax increase that would essentially undo their most significant legislative achievement of the Trump era. Neither do business groups, which have helped broker some bipartisan compromises on economic issues in the past but have lost some power in recent years as populist impulses have swept both parties.
Senator Mitch McConnell, the Kentucky Republican and minority leader, called the tax proposal “an effort to rewrite the 2017 tax bill,” which itself passed via budget reconciliation with no Democratic votes.
The Trump tax law “in my view was principally responsible for the fact that in February 2020 we had the best economy of 50 years,” Mr. McConnell said. “But they are going to tear that down.”
Still, business lobbyists and some lawmakers remain hopeful that Mr. Manchin’s appeal could prod Mr. Biden and congressional leaders toward a set of mini-compromises on infrastructure. Such deals could including spending big on research and development for emerging industries, like advanced batteries, in the supply chain bill, which carries bipartisan sponsorship in the Senate. They could also include spending a few hundred billion dollars on highways and other surface transportation projects. That could satisfy at least some of Mr. Manchin’s quest for bipartisanship and give both parties the ability to claim victory.
WASHINGTON — Large companies like Apple and Bristol Myers Squibb have long employed complicated maneuvers to reduce or eliminate their tax bills by shifting income on paper between countries. The strategy has enriched accountants and shareholders, while driving down corporate tax receipts for the federal government.
President Biden sees ending that practice as central to his $2 trillion infrastructure package, pushing changes to the tax code that his administration says will ensure American companies are contributing tax dollars to help invest in the country’s roads, bridges, water pipes and other parts of his economic agenda.
On Wednesday, the Treasury Department released the details of Mr. Biden’s tax plan, which aims to raise as much as $2.5 trillion over 15 years to help finance the infrastructure proposal. That includes bumping the corporate tax rate to 28 percent from 21 percent, imposing a strict new minimum tax on global profits and levying harsh penalties on companies that try to move profits offshore.
The plan also aims to stop big companies that are profitable but have no federal income tax liability from paying no taxes to the Treasury Department by imposing a 15 percent tax on the profits they report to investors. Such a change would affect about 45 corporations, according to the Biden administration’s estimates, because it would be limited to companies earning $2 billion or more per year.
President Donald J. Trump’s 2017 tax cuts. Biden administration officials say that law increased the incentives for companies to shift profits to lower-tax countries, while reducing corporate tax receipts in the United States to match their lowest levels as a share of the economy since World War II.
Treasury Secretary Janet L. Yellen, in rolling out the plan, said it would end a global “race to the bottom” of corporate taxation that has been destructive for the American economy and its workers.
“Our tax revenues are already at their lowest level in generations,” Ms. Yellen said. “If they continue to drop lower, we will have less money to invest in roads, bridges, broadband and R&D.”
The plan, while ambitious, will not be easy to enact.
Some of the proposals, like certain changes to how a global minimum tax is applied to corporate income, could possibly be put in place by the Treasury Department via regulation. But most will need the approval of Congress, including increasing the corporate tax rate. Given Democrats’ narrow majority in both the Senate and the House, that proposed rate could drop. Already, Senator Joe Manchin III of West Virginia, a crucial swing vote, has said he would prefer a 25 percent corporate rate.
search of the lowest possible tax bill.
Companies also shift jobs and investments between countries, but often for different reasons. In many cases, they are following lower labor costs or seeking customers in new markets to expand their businesses. The Biden plan would create new tax incentives for companies to invest in production and research in the United States.
weakened by subsequent regulations issued by Mr. Trump’s Treasury Department.
Conservative tax experts, including several involved in writing the 2017 law, say they have seen no evidence of the law enticing companies to move jobs overseas. Mr. Biden has assembled a team of tax officials who contend the provisions have given companies new incentives to move investment and profits offshore.
Mr. Biden’s plan would raise the rate of Mr. Trump’s minimum tax and apply it more broadly to income that American companies earn overseas. Those efforts would try to make it less appealing for companies to book profits in lower-tax companies.
The S.H.I.E.L.D. proposal is an attempt to discourage American companies from moving their headquarters abroad for tax purposes, particularly through the practice known as “inversions,” where companies from different countries merge, creating a new foreign-located firm.
Under current law, companies with headquarters in Ireland can “strip” some of their profits earned by subsidiaries in the United States and send them back to the Ireland company as payments for things like the use of intellectual property, then deduct those payments from their American income taxes. The S.H.I.E.L.D. plan would disallow those deductions for companies based in low-tax countries.
Tax professionals say Mr. Biden’s proposed changes to that law could be difficult to administer. Business groups say they could hamper American companies as they compete on a global scale.
Republicans denounced the plan as bad for the United States economy, with lawmakers on the House Ways and Means Committee saying that “their massive tax hikes will be shouldered by American workers and small businesses.”
coupled with an effort through the Organization for Economic Cooperation and Development to broker a global agreement on minimum corporate taxation, will start a worldwide revolution in how and where companies are taxed. That is in part because the Biden plans include measures meant to force other countries to go along with a new global minimum tax that Ms. Yellen announced support for on Monday.
Treasury Department officials estimate in their report that the proposed changes to the minimum tax, and the implementation of the S.H.I.E.L.D. plan, would raise an estimated $700 billion over 10 years on their own.
Business groups warn the administration’s efforts will hamstring American companies, and they have urged Mr. Biden to wait for the international negotiations to play out before following through with any changes.
Members of the Business Roundtable, which represents corporate chief executives in Washington, said this week that Mr. Biden’s minimum tax “threatens to subject the U.S. to a major competitive disadvantage.” They urged the administration to first secure a global agreement, adding that “any U.S. minimum tax should be aligned with that agreed upon global level.”
However, some companies expressed an openness on Wednesday to some of the changes.
John Zimmer, the president and a founder of Lyft, told CNN that he supported Mr. Biden’s proposed 28 percent corporate tax rate.
“I think it’s important to make investments again in the country and the economy,” Mr. Zimmer said. “And as the economy grows, so too does jobs and so too does people’s needs to get around.”
Bill Barber saw an ad on Facebook last year for American Diesel Training Centers, a school in Ohio that prepares people for careers as diesel mechanics. It came with an unusual pitch: He would pay for the schooling only if it landed him a job, thanks to a nonprofit called Social Finance.
After making sure it wasn’t a scam, he signed up. After going through the immersive five-week program, he got a job with starting pay of $39,000 a year — about $10,000 more than he made before as a cable TV installer.
“I figured this was my best opportunity to succeed,” Mr. Barber, 23, said.
American Diesel Training is part of a new model of work force training — one that bases pay for training programs partly on whether students get hired. Early results are promising, and experts say the approach makes far more economic sense than the traditional method, in which programs are paid based on how many people enroll.
Right now, there are only a relative handful of these pay-for-success programs that train low-income Americans for better-paying careers. The challenge has been to align funding and incentives so that students, training programs and employers all benefit.
Social Finance, founded a decade ago to develop new ways to finance results-focused social programs, is showing how the idea could grow quickly just as the pandemic made job-training programs more important than ever. The coronavirus put millions of people out of work, upended industries and accelerated automation.
billions for work force development with an emphasis on “next-generation training programs” that embrace “evidence-based approaches.”
The Social Finance effort is powered by a fund of more than $40 million raised from philanthropic investors. The money goes toward paying for low-income students, as well as minority candidates and veterans, to enter the training programs. The group is not related to the online lender SoFi.
It has supported four job training programs, including American Diesel Training, in the past year. It has plans to have double that number a year from now.
Year Up, Per Scholas and Project Quest. Their training is tightly focused on specific skills and occupations, they work closely with employers, and they teach soft skills like communication and teamwork. But there are too few of them, and they struggle for sustainable financing.
Social Finance is seeking, designing and supporting new programs — for-profit or nonprofit — that follow that training formula but then apply a different funding model.
“There is emerging evidence that these kinds of programs are a very effective and exciting part of work force development,” said Lawrence Katz, a labor economist at Harvard. “Social Finance is targeting and nurturing new programs, and it brings a financing mechanism that allows them to expand.”
The social venture’s more than $40 million fund is seed money for demonstration projects that show its model could be widely used, whether backed by government or by investors in social programs, across a range of occupations including skilled trades.
Blue Meridian Partners, whose donor partners include the Bill and Melinda Gates Foundation, the Ballmer Group and the Sergey Brin Family Foundation.
Others contributing to the fund are the Michael and Susan Dell Foundation and Schmidt Futures, led by Eric Schmidt, former chief executive of Google.
For Social Finance and its backers, the career impact bonds are not traditional investments. For them, breaking even or a small return would be winning — proof the concept is working, which should attract more public and private money.
“We need to move toward evidence-based funding,” said Jim Shelton, chief investment and impact officer for Blue Meridian Partners and a deputy secretary of education in the Obama administration. “And Social Finance is supporting programs that show it can be done.”
The Social Finance income-share agreement with students ranges from about 5 percent to 9 percent depending on their earnings — less from $30,000 to $40,000, and generally more above $40,000. The monthly payments last four years. If you lose your job, the payment obligation stops.
“Our investors aren’t after high returns. They’re primarily after social impact,” Ms. Palandjian said.
When screening programs, Social Finance looks for those that offer training for specific skills linked to local demand, and have data to show that its students graduate and get good-paying jobs. In selecting a skilled-trade school, Social Finance, working with Burning Glass Technologies, which analyzes job-market data, sought a program for an occupation in demand with potential for the worker to move up the career ladder.
American Diesel Training, based in Columbus, Ohio, met the requirements. The for-profit company’s program is designed as a short, intensive course to train entry-level diesel technicians, mostly for trucking companies and dealerships.
Demand for diesel technicians is robust as more goods are shipped by truck, often delivering products ordered online, and baby-boom mechanics are retiring. There is an accessible career path to become a senior mechanic or into administration as a service, distribution or shop manager.
American Diesel Training, founded in 2017, succeeded in placing students in jobs in its first few years, but remained small.
Before Social Finance arrived, Tim Spurlock, co-founder and chief executive of American Diesel Training, looked into financing through income-share agreements offered by venture-backed start-ups. The terms, he said, were far less favorable for students.
“Social Finance comes at it from a completely different angle,” he said.
The first group of Social Finance-funded students started the five-week course last September. There are now about 70 students in each course. That is about four times as many as a year ago.
Social Finance pays American Diesel Training just over 60 percent of its fee initially. The rest comes later, after a student lands and keeps a job.
“I’m fine with that,” Mr. Spurlock said. “We’ve completely proven our educational model. The problem was the funding mechanism.”
A total of 229 students supported by Social Finance have been enrolled. The graduation rate is nearly 100 percent, and 89 percent have jobs. Their average annual income is $36,500, and the average gain from income before the program is $12,400.
Today, Mr. Barber, who saw an ad for the program on Facebook, works in Ohio for U.S. Xpress, a national freight-hauling trucker. As an entry-level diesel technician, he is mostly doing preventive maintenance on trucks. With diesel mechanics in demand, the company paid him a $2,000 signing bonus and a relocation fee.
Jordan Battle earns about $43,000 a year as a diesel mechanic for a large trucking company in Atlanta, far more than she did as a contractor for a civic education organization.
That job ended with the pandemic, so she decided to go for “something essential and to have a real skill others don’t.” She was accepted in the American Diesel Training program, and she was offered a job after three weeks, before she graduated. Practice interviews, résumé building and introductions to employers were part of the curriculum.
“That’s where the program really stands out,” she said. “They fight for you.”
“Many people in the states would be surprised to hear that broadband for rural areas no longer counts,” said Anita Dunn, a senior adviser to Mr. Biden in the White House. “We think that the people in Jackson, Miss., might be surprised to hear that fixing that water system doesn’t count as infrastructure. We think the people of Texas might disagree with the idea that the electric grid isn’t infrastructure that needs to be built with resilience for the 21st century.”
White House officials said that much of Mr. Biden’s plan reflected the reality that infrastructure had taken on a broader meaning as the nature of work changes, focusing less on factories and shipping goods and more on creating and selling services.
Other economists back the idea that the definition has changed.
Dan Sichel, an economics professor at Wellesley College and a former Federal Reserve research official, said it could be helpful to think of what comprises infrastructure as a series of concentric circles: a basic inner band made up of roads and bridges, a larger social ring of schools and hospitals, then a digital layer including things like cloud computing. There could also be an intangible layer, like open-source software or weather data.
“It is definitely an amorphous concept,” he said, but basically “we mean key economic assets that support and enable economic activity.”
The economy has evolved since the 1950s: Manufacturers used to employ about a third of the work force but now count for just 8.5 percent of jobs in the United States. Because the economy has changed, it is important that our definitions are updated, Mr. Sichel said.
The debate over the meaning of infrastructure is not new. In the days of the New Deal-era Tennessee Valley Authority, academics and policymakers sparred over whether universal access to electricity was necessary public infrastructure, said Shane M. Greenstein, an economist at Harvard Business School whose recent research focuses on broadband.
“Washington has an attention span of several weeks, and this debate is a century old,” he said. These days, he added, it is about digital access instead of clean water and power.
Engineers say that when infrastructure works, most people do not even think about it. But they recognize it when they turn on a faucet and water does not come out, when they see levees eroding or when they inch through traffic, the driver’s awareness of the highway growing mile after creeping mile.
President Biden has announced an ambitious $2 trillion infrastructure plan that would pump huge sums of money into improving the nation’s bridges, roads, public transportation, railways, ports and airports.
The plan faces opposition from Republicans and business groups, who point to the enormous cost and the higher corporate taxes that Mr. Biden has proposed to pay for it.
Still, leaders in both parties have long seen infrastructure as a possible unifying issue. Urban and rural communities, red and blue states, the coasts and the middle of the country: All are confronting weak and faltering infrastructure.
plagued by delays and cancellations, with similar problems affecting railways along the Northeast Corridor.
bridge has remained a source of frustration. Rusty and creaky, it has been listed as “functionally obsolete” in the federal bridge inventory since the 1990s, and it has a history of bottlenecks and crashes.
There is a $2.5 billion plan to fix the bridge and build a new one alongside it, but in Covington, Ky., some have expressed worries about the proposal. The mayor told The Cincinnati Enquirer that it was an “existential threat,” citing the size of the proposed bridge (some traffic would still cross over the old one, as well).
told local reporters at a news conference on Wednesday. “Hopefully somewhere in the bowels of this multitrillion bill, there’s a solution.”
Crumbling schools vulnerable to earthquakes
a serious earthquake on Jan. 7.
The collapse brought attention to the more than 600 schools on the island that shared a “short column” architectural design, which makes them vulnerable to tremors. Teachers and parents were wary of reopening, and the schools with that design risk remain closed. Children who had gone to them are still learning remotely.
In addition, nearly 60 schools were closed after inspections following the earthquakes showed structural deficiencies. About 25 had “persistent” problems that predated the earthquake and its aftershocks, Puerto Rico’s education secretary told The New York Times last year.
residents went weeks with a boil notice in place.
The water crisis inflamed enduring tensions in Jackson, ones that grip many communities where white residents have fled and tax bases have evaporated. The city has old and broken pipes. It does not have the funding to repair them. City officials estimated that modernizing Jackson’s water infrastructure could cost $2 billion.
The storm also caused power failures for millions of people across Texas, which has prompted lawmakers there to weigh an overhaul of the state’s electric infrastructure. At least 111 people died as a result of the storm, according to state officials, and it also caused widespread property damage and left some residents to face huge electric bills.
conclusions were stark: A historic flooding event had caught up with years of underfunding and neglect.
The country has roughly 91,000 dams, a majority of which are more than 50 years old, and many are an exceptional rainfall away from potential disaster. As dams have aged, the weather has grown more severe, rendering old building standards outdated and creating conditions that few considered when many of the dams were built.
Residential development has also steadily spread into once rural areas that lie downstream from the weakening infrastructure. According to the Association of State Dam Safety Officials, about 15,600 dams in the country would most likely cause death and extensive property damage if they failed. Of those, more than 2,330 are considered deficient, the group said.
is not likely to let up soon, given new weather patterns driven by climate change. And some of the officials whose towns and cities were most affected by the 2019 floods are adamant: Simply refurbishing levees is not going to work anymore.
“Levees aren’t going to do it,” said Colin Wellenkamp, the executive director of Mississippi River Cities & Towns Initiative, an association of 100 mayors along the Mississippi River. His group presented a plan to the White House last month detailing a “systemic solution” to flooding. It includes replacing wetlands, reconnecting backwaters to the main river and opening up areas for natural flooding.
A plan that simply replaces infrastructure, rather than rethinking what it encompasses, will be ineffective and ultimately unaffordable, Mr. Wellenkamp said. He is not sure whether his group’s proposals have been folded into the Biden plan. But he sees little choice.
“This is a losing game unless we incorporate other, larger solutions,” he said.
Campbell Robertson and Frances Robles contributed reporting.
WASHINGTON — America’s most celebrated infrastructure initiative, the interstate highway system, rammed an elevated freeway through the center of Claiborne Avenue in New Orleans in the late 1960s.
It claimed dozens of Black-owned businesses, along with oak trees and azalea bushes that had shaded Black children playing in the large neutral ground in the middle of the street, eviscerating a vibrant neighborhood whose residents fought in vain to stop the construction.
More than a half-century later, President Biden’s $2 trillion plan to rebuild aging roads, bridges, rail lines and other foundations of the economy comes with a new twist: hundreds of billions of dollars that administration officials say will help reverse long-running racial disparities in how the government builds, repairs and locates a wide range of physical infrastructure.
That includes $20 billion to “reconnect” communities of color to economic opportunity, like the Black residents still living in the interstate’s shadow along Claiborne.
unveiled on Wednesday in Pittsburgh, is the first step in a two-part agenda to remake the American economy. The president and his advisers have pitched that agenda — whose total cost could reach $4 trillion — in the grand terms of economic competitiveness and the granular language of shortened commute times.
But they have also stressed its potential to advance racial equity and bridge gaps in economic outcomes.
In addition to dedicated funding for neighborhoods split or splintered by past infrastructure projects, the proposal also includes money for the replacement of lead water pipes that have harmed Black children in cities like Flint, Mich.; the cleanup of environmental hazards that have plagued Hispanic neighborhoods and tribal communities; worker training that would target underserved groups; and funds for home health aides, who are largely women of color.
More traditional efforts to close racial opportunity gaps, like universal pre-K and more affordable higher education, are coming in the next phase of Mr. Biden’s plans. The exact mix of components is likely to change as Mr. Biden tries to push the plans through Congress.
Given the thin Democratic majorities in both the House and the Senate, the legislative battle is likely to be intense and highly partisan, with no assurance the White House will prevail.
corporate tax increases Mr. Biden has proposed to fund this phase of his agenda, and they have accused the president of using the popular banner of “infrastructure” to sell what they call unrelated liberal priorities — including many of the programs White House officials say will advance economic opportunity for disadvantaged people and areas.
But liberal economists say the spending on transportation, housing and other areas of Mr. Biden’s initial plan could help advance racial equity, if done correctly.
“This is a promising start,” said Trevon Logan, an economist at Ohio State University whose work includes studies of how government spending projects, like the one that built the interstate highway system, have excluded or hurt Americans who are not white.
The biggest single piece of the plan’s racial equity efforts is not a transportation or environmental project, but a $400 billion investment in in-home care for older and disabled Americans. It would lift the wages of care workers, who are predominantly low-paid, female and not white.
that was partially bulldozed to make way for Interstate 81, and the Claiborne Expressway in New Orleans.
Government infrastructure spending is meant to make the economy work more efficiently. Freeways and rail lines speed goods from factories to market. Roads and transit systems carry workers from their homes to their jobs.
But for some communities of color, those projects devastated existing economies, leveling commercial corridors, cutting Black neighborhoods off from downtowns and accelerating suburbanization trends that exacerbated segregation.
“A lot of previous government investment in infrastructure purposely excluded these communities,” said Bharat Ramamurti, a deputy director of Mr. Biden’s National Economic Council. “So if you look at where we need to invest in infrastructure now, a lot of it is concentrated in these communities.”
Past projects were often built in communities that did not have the political capital or resources to successfully protest.
“When it comes time to build an interstate through a city, a pattern emerges: The areas that are displaced by that interstate will overwhelmingly be the areas occupied by African-Americans,” Dr. Logan said. Often, he added, lawmakers choose to build “in the places that have the least political power to make sure this doesn’t happen in their neighborhood.”
Eric Avila, an urban historian at the University of California, Los Angeles, said a consensus during the Dwight D. Eisenhower administration on the need to invest in highways that would connect neighborhoods to cities led to the exclusion of minority communities.
The federal government also used “urban renewal” or “slum clearance” redevelopment programs that often led to the clearing of the way for giant infrastructure projects like highways.
“These highways were essentially built as conduits for wealth,” Mr. Avila said. “Primarily white wealth, jobs, people, markets. The highways were built to promote the connectivity between suburbs and cities. The people that were left out were urban minorities. African-Americans, immigrants, Latinos.”
Mr. Avila pointed to how plans for the Inner Belt highway in Cambridge, Mass., were halted after protests by faculty members at Harvard and the Massachusetts Institute of Technology.
And in New Orleans, Mr. Avila said, plans for a highway called the Riverfront Expressway were canceled after officials faced pressure from protesters in the French Quarter. But Black protesters were not able to spare Treme, one of the nation’s oldest communities of free Black residents, from the construction of an elevated six-lane stretch of Interstate 10 along Claiborne Avenue.
Amy Stelly is reminded of that freeway each morning when the truck traffic causes her home to shudder. The emissions from the interstate a block away have turned jewelry that she placed near her window jet black.
“Anyone who lives near an urban highway knows what we’re breathing in every day,” said Ms. Stelly, an urban designer and activist against the project. “There’s a layer of silt that sticks on our properties and houses.”
It is unclear from the Mr. Biden’s plan, and conversations with White House officials, what the administration envisions for Claiborne Avenue. If the funding survives in any bill Mr. Biden might sign into law, those details will matter, said Deborah Archer, a director of the Center on Race, Inequality and the Law at New York University School of Law.
“I think it’s wonderful to be able to say and have the goal that this historic investment will advance racial equity,” Ms. Archer said. “It’s another thing to distribute these funds in a way that has impact.”
WASHINGTON — President Biden’s attempt to muscle through a $2 trillion plan to rebuild the country’s infrastructure — along with the tax increases to pay for it — will be a defining test of his belief that bipartisan support for his proposals can overwhelm traditional Republican objections in Congress.
Instead of paring back his ambitions in an effort to limit opposition from Republicans in the Senate or appease moderate Democrats in the House, Mr. Biden and his allies on Capitol Hill are barreling ahead with unapologetically bold, expensive measures, betting that they can build bipartisanship from voters nationwide rather than from elected officials in Washington.
Senator Mitch McConnell of Kentucky, the Republican leader, and other members of his party are working to brand the bill as a liberal wish list of wasteful spending and a money grab from a Democratic administration that will drag down the economy with tax hikes.
But Mr. Biden is predicting that the broad appeal of wider roads, faster internet, high-speed trains, ubiquitous charging stations for electric cars, shiny new airport terminals and upgraded water pipes will undercut the expected barrage of ideological attacks that are already coming from Republican lawmakers, business groups, anti-tax activists and President Donald J. Trump.
tax increases in the president’s plan, with influential groups like the Business Roundtable and the U.S. Chamber of Commerce warning lawmakers against raising taxes as the United States emerges from a deep economic crisis caused by the coronavirus pandemic.
But across the country, some local Republican officials are already embracing the prospect of millions of dollars in new infrastructure spending flowing into their communities, even as they are careful to express concern about new taxes.
high-speed rail station linking it to job centers in the Bay Area. He said the city had struggled to electrify its fleet of buses and provide robust internet, especially to poorer communities.
parliamentary budget tool known as reconciliation to push through the tax and spending plan with a simple majority vote and most likely only Democratic support.
At an event in his home state on Thursday, Mr. McConnell called Mr. Biden “a first-rate person” whom he liked personally. But he argued that the president was running a “bold, left-wing administration” and warned “that package that they’re putting together now, as much as we would like to address infrastructure, is not going to get support from our side.”
For Mr. Biden, who spent more than three decades in the Senate, the political calculations are far different than they were 12 years ago, when a similar measure was under consideration.
legislation that is now seen by many progressives as far too timid.
Mr. Obama and his aides spent weeks feverishly negotiating with conservative Democrats and a handful of Republicans in Congress, who pressed the president to limit the size of the spending plan. Rahm Emanuel, Mr. Obama’s chief of staff at the time, said conservative Democrats like Senator Ben Nelson of Nebraska insisted that the president win Republican support.
Senate parliamentarian to offer guidance on how many times senators can pursue reconciliation this fiscal year, which several Republicans took as a sign that they were preparing to bypass the 60-vote filibuster threshold.
“It is disingenuous for the president to invite Republicans to the White House and the Oval Office to discuss this when he’s made it very clear — and Democrats in Congress have made it very clear — they have no intention of working with Republicans on this package,” said Representative Kevin Brady of Texas, the top Republican on the House Ways and Means Committee.
inequities across the country, and they have counseled the White House against winnowing down a legislative package to win a handful of Republican votes.
“I’m not particularly hopeful that we’re going to see a giant awakening from Republicans who decide that they want to pass an infrastructure package that actually addresses climate,” Representative Pramila Jayapal of Washington, the chairwoman of the Congressional Progressive Caucus, told reporters before Mr. Biden’s speech.
West Texas Intermediate, the U.S. benchmark, climbed 3.9 percent to $61.45 a barrel, and shares of Marathon Oil and Diamondback energy, for example, were up more than 10 percent.
The mood in financial markets also has been lifted this week by more signs of economic recovery in the United States and abroad. On Thursday, a measure of manufacturing activity rose to its highest since 1983, the Institute for Supply Management said. A weekly report on unemployment claims showed an uptick in the number of people applying for benefits, but investors will get a more complete picture of the job market on Friday when the employment report for March is released.
Analysts also pointed to President Biden’s $2 trillion infrastructure plan, unveiled on Wednesday, as a tailwind. The proposal includes money for repairing roads and bridges, building affordable housing and caregiving facilities, and expanding access to broadband. And it comes just weeks after the passage of a nearly $2 trillion stimulus bill that could raise consumer spending by sending payments directly to Americans.
Mr. Biden proposed paying for the infrastructure plan with an increase in corporate taxes, but many on Wall Street had already anticipated that.
“Biden’s proposed tax increases have been discussed for months, so few were surprised by their inclusion,” Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a note to clients on Thursday, though he and other analysts did note that Mr. Biden could yet propose other tax increases — including one on capital gains from investments. The infrastructure plan includes spending about $50 billion on the semiconductor industry, where a global shortage in chips has disrupted car manufacturing. The Philadelphia Semiconductor index rose 3.7 percent on Thursday, while Micron Technology, which posted much better than expected quarterly sales and profit numbers a day earlier, was up 4.8 percent.
The plan also includes $174 billion to encourage the manufacture and purchase of electric vehicles. ChargePoint Holdings, which has a large network of electric-vehicle charing stations, rose nearly 12 percent.
On Friday, markets will be closed in the United States, Europe and some other countries for Good Friday.