WASHINGTON (AP) – President Joe Biden and his team have given a hugely inflated projection of the number of jobs his infrastructure plan would create, an account his press secretary corrected on Tuesday. Biden has also strayed beyond the facts when he put aside the potential downsides of the tax increases needed to pay for all those roads and bridges.
A look at the administration’s sales pitch on infrastructure over the past few days:
CORPORATION TAX
BIDEN, when asked if his proposed corporate tax increase would drive US companies abroad: “Not at all … because there is no evidence for that … that’s bizarre.” – comments to reporters Monday.
THE FACTS: Hardly bizarre. The Biden administration is aware that lower tax rates abroad can entice US companies to relocate. Whether the proposed tax increase would be large enough to have that effect is another question.
On the same day that Biden made his comments, Treasury Secretary Janet Yellen approved a global minimum corporate tax rate to prevent countries from lowering rates to entice companies to relocate.
Yellen said it was time to end a 30-year “race to the bottom” of countries cutting their corporate tax rates to secure a benefit. Her approach suggests that the government will at least accept the possibility that an increase in the corporate tax rate in the US could cause US multinationals to relocate 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 lowered the rate from 35% in his 2017 tax law.
INFRASTRUCTURE JOBS
BIDEN, on his $ 2.3 trillion infrastructure plan: “Independent analysis shows that if we meet this plan, the economy will create 19 million jobs – good jobs, working-class jobs, jobs that pay well.” – notes the White House on Friday.
BRIAN DEESE, director of the White House National Economic Council: “If you look at the analyzes we saw 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 19 million jobs in less than ten years.
Instead, the economic consultancy calculated 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 approved last month. At 1.6 million a year, that would be a slow rate of job creation, below the rate of about 2.2 million before the pandemic.
Moody’s says the bailout plan will create about 700,000 jobs over the next ten years that otherwise wouldn’t exist, and it says the infrastructure plan would create about 2.6 million jobs over the next ten years. That would total about 19 million, but with only a modest share as a result of the infrastructure proposal.
When asked about the study Tuesday, Biden press secretary Jen Psaki correctly described it:
“Moody’s conducted an analysis that showed that the economy would create 19 million jobs in the next decade if Congress approves the US jobs plan – nearly 3 million more than if it didn’t,” she said. “So that’s the – that’s what the impact of the American Jobs Plan would be: 2.7 million, just to be clear.”
AUTO JOBS
TRANSPORT SECRETARY PETE BUTTIGIEG: “We will have auto workers, union auto workers, I hope, who somehow make cars. Why not let them lead the electric vehicle revolution, which incidentally is very hot 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 the production of many more electric vehicles – fewer jobs in car manufacturing.
It doesn’t take as many people to build an electric car as a gas-powered one, and the jobs that would be created in these new factories might pay less.
Electric vehicles generally have 30% to 40% fewer parts than traditional cars and are easier to build. In addition, many of the jobs building the batteries used in electric cars are non-union jobs with companies supplying the auto manufacturers, rather than union factories run by the US auto companies themselves.
Associated Press writer Cal Woodward contributed.
EDITOR’S NOTE – A look at the veracity of claims made by political figures.
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