What Does the American Jobs Plan Mean for Kentucky?
At the end of March, the White House released the full details of President Joe Biden’s proposed infrastructure initiative. The $2 trillion “American Jobs Plans” and its associated “Made in America” corporate tax plan have since generated contention as Democrats and Republicans debate the particulars.
Democrats view it as a much-needed jolt of expenditure.
“The amount of public investment that we have done in this country has dropped significantly,” said David Ramey, outgoing chair of the Calloway County Democratic Party. “All you have to do, and one of the things that I really like about what the president has proposed, is it’s the first time in a long time we’re going to be dealing with a lot of significant infrastructure problems that we have.”
But Republicans say it’s too big and defines infrastructure too broadly.
“I think I can pretty safely say none of my Republican colleagues are going to support a $4.1 trillion infrastructure package, only part of which is for infrastructure,” House Minority Leader Mitch McConnell said at the University of Louisville earlier this month.
As negotiations surrounding the American Jobs Plan continue across party lines, the question remains what impact the proposal may have on Kentuckians.
What is the American Jobs Plan?
According to the White House release, the American Jobs Plan will invest approximately $2 trillion this decade into various infrastructure projects — including highways, drinking water, high-speed broadband, housing, schools, jobs and the care economy — focusing in part on addressing racial inequities and moving toward alternative energy sources.
“The American Jobs Plan is the biggest increase in our federal non-defense research and development spending on record,” Biden said at the Carpenters Pittsburgh Training Center in Pennsylvania. “It’s going to boost America’s innovative edge in markets where global leadership is up for grabs — markets like battery technology, biotechnology, computer chips, clean energy, the competition with China in particular.”
Funding for the plan will come from an investment of “about 1% percent of GDP per year over eight years” and, if passed, money generated by the Made in America corporate tax plan. This plan will increase the corporate tax rate and global minimum tax, prevent U.S. corporations from inverting or claiming tax havens as their residence and enact a 15% minimum tax on book income, among other things.
Previous reporting by the Washington Post indicates much of the plan “would reverse the Trump administration’s 2017 tax cuts.”
How does it pertain to Kentucky?
Many of the measures outlined in the American Jobs Plan could be seen as applicable to Kentucky to varying degrees. For example, Biden’s proposal designates $621 billion to fixing highways, rebuilding bridges and upgrading ports, airports and transit systems.
In its 2019 Infrastructure Report Card, the American Society of Civil Engineers (ASCE) gave middling scores to Kentucky’s bridges and airports. The commonwealth’s roads received a “D+,” indicating “poor” or “at risk” conditions. However, in its 25th Annual Highway Report released in November 2020, the Reason Foundation ranked Kentucky fourth in the nation for overall highway performance, saying “The top-performing states tend to be less populated and more rural.”
Other infrastructure projects, projected at $650 billion, include drinking water, a renewed electric grid and high-speed broadband access across the nation.
The same ASCE report gave Kentucky’s drinking water a “C+” rating. In 2015, the Natural Resources Defense Council ranked the commonwealth 10th among the top dozen states with the most drinking water offenses. Yet Kentucky’s 2019 Drinking Water Compliance Report indicates all 434 public water systems “consistently produce excellent quality water,” according to previous reporting by the Northern Kentucky Tribune.
As for terrestrial broadband access, coverage is at 81.8% in Kentucky, according to Broadband Now. The research group ranked the commonwealth 40th in the nation for internet coverage based on “a comprehensive formula that takes into account overall levels of access, pricing, and average download speeds.”
Further goals include building, preserving, and retrofitting “more than two million homes and commercial buildings,” modernizing schools and childcare facilities and upgrading veterans’ hospitals and federal buildings.
The ASCE found a “$453 million gap in estimated school capital expenditures” in Kentucky’s schools. U.S. News ranked Kentucky 33rd in the nation for pre-K-12 education based on “enrollment in pre-K, standardized test scores and the public high school graduation rate.” Previous reporting by WBUR shows better school design can contribute to better student performance in conjunction with project-based learning.
About $400 billion of the plan is intended to “solidify the infrastructure of our care economy by creating jobs and raising wages and benefits for essential home care workers.”
In their 2018 Senior Report, America’s Health Rankings found home health care workers in Kentucky increased 71% from 36.6 to 62.6 aides per 1,000 adults ages 75 and older, but the commonwealth ranks 46 in the nation for home-delivered meals to seniors. Data from Indeed shows home health aides earn an average of $11.83 per hour in Kentucky, 7% lower than the national average.
Another aim is to “create good-quality jobs that pay prevailing wages in safe and healthy workplaces while ensuring workers have a free and fair choice to organize, join a union and bargain collectively with their employers.”
According to ZipRecruiter, the average hourly wage in Kentucky is $18/hour, whereas the national average is $21/hour. Previous reporting by the Appalachian News-Express finds unionized workers comprised only 7.5% of the workforce in Kentucky as of 2020, and the commonwealth ranks 31st in the nation for percentage of workers in a labor union.
Why is it controversial?
Discourse surrounding the American Jobs Plan has proven partisan thus far. Republicans argue the proposal is too expensive and suggest an alternative $568 billion infrastructure plan. Democrats assert this investment is too small to ensure progress.
"President Biden confirmed his commitment to an era of big government and a collection of radical liberal dreams," Republican Rep. Hal Rogers of Kentucky’s fifth district said in April. "The size of his proposed spending is staggering, and it is an invitation to inflation that will hit hard working Americans by cheapening their paychecks.”
Republicans’ counteroffer, dubbed the “Republican Roadmap,” diverts $299 billion to roads and bridges, $61 billion to public transit systems, $20 billion to rail, $35 billion to drinking water and wastewater, $13 billion to safety, $17 billion to ports and inland waterways, $44 billion to airports, $65 billion to broadband infrastructure and $14 billion to water storage.
The Hill reports Republicans intend to pay for this plan by implementing user fees for electric vehicles and reallocating unused funds from the “American Rescue Plan,” Biden’s $1.9 trillion COVID-19 relief package.
According to previous reporting by CNN, Biden and his allies are currently making a “sustained push for an agreement on a scaled-back plan,” setting the “unofficial deadline” of Memorial Day to assess their progress. Biden recently said he would consider reducing the proposed corporate tax rate from 28% to 25% as a compromise.
The Calloway County Democratic Party supports Biden’s intentions.
“Most of the roads and the bridges that we drive on in Kentucky were built in the ‘30s or ‘60s,” said Ramey, the outgoing chair. ”That’s the facts. Now, we’ve had some progress on some roads that were upgraded, but in general, we’ve not had significant infrastructure done in the country, and in Kentucky, for generations. In Kentucky, we’ve got a thousand bridges that need repaired. We’ve got almost 1,400 miles of roadways that are in poor condition. And I can get into specific bridges here locally and regionally that need to be repaired.”
The Republican Party of Kentucky, on the other hand, voiced its opposition to the American Jobs Plan.
“As American workers and businesses are still struggling to recover, and families are facing rising prices, now is not the time for Joe Biden and the Democrats' proposal for trillions of dollars in wasteful spending and tax increases,” spokesman Mike Lonergan said.
Given its contentious nature, Biden noted he’s willing to pass portions of the American Jobs Plan regarding the “social safety net” without bipartisan support.
“I’m not going to give up on a whole range of things that go to the question of productivity, of increasing jobs, increasing employment, increasing revenues,” the president said in an MSNBC interview. “I’m not willing to give up on that. So we’re going to fight those out. So I want to know, what can we agree on? And let’s see if we can get an agreement to kick-start this, and then fight over what’s left, and see if I can get it done without Republicans if need be."
According to previous reporting by NBC News, Biden can pass the American Jobs Plan without any Republican votes, provided he maintains all 50 Democratic votes in the Senate and most Democratic votes in the House.