Biden Transportation & Infrastructure Plan: Good and Bad for the Printing Industry

On March 31, President Biden publicly rolled out his expected transportation and infrastructure plan, known as the American Jobs Plan, and urged Congress to begin the legislative process to enact it. The President’s vision notably redefines traditional “T&I” (transportation & infrastructure) bills, which generally focus on highways, bridges, ports, airports, and transit systems, into a wide-ranging proposal that the White House estimates will cost the federal government $2 trillion over 15 years. Those who thought the most recent COVID-19 relief legislation included “everything but the kitchen sink,” may want to sit down with a strong cup of coffee (or an adult libation) before reviewing the summary of the proposal here.

Clearly, the American Jobs Plan outlined by the President would create T&I legislation that would serve as the vehicle for enacting many tangentially related policy goals held by the Biden Administration. The plan starts with the usual transportation policies noted above and adds relevant infrastructure policy, such as broadband deployment, clean water systems, electrical grids, and housing (which has gained increasing recognition as part of the infrastructure sector in recent years).

From there it ventures into multiple and diverse policy areas, including, but not limited to, climate change, unionization, prevailing wages, small business and manufacturing, and OSHA enforcement. It also includes lots of construction, namely building new homes and retrofitting schools and federal buildings. One element of the plan likely to be scrutinized as too much of a departure from T&I is the call to “solidify the infrastructure of the care economy by creating jobs and raising wages and benefits for essential home health workers.”

The “pay for” to fund the ambitious investments laid out in the American Jobs Plan is the “Made in America Tax Plan,” focusing almost exclusively on Corporate America. The centerpiece of the revenue raising portion of the plan is the increase of the corporate tax rate to 28%, with a minimum 21% tax on multinational corporations (which would be calculated on a country-by-country basis to assess profits in international tax havens). Additional tax reforms trained on corporations would include a new minimum tax of 15% on a company’s “book income,” and increased IRS enforcement, among other policies.

The massive nature of the American Jobs Plan means that for many industries – print and packaging included – reaction and advocacy related to the plan will not be a simple binary choice. For example, the plan’s section on revitalizing U.S. manufacturing and small business competitiveness will be welcomed by most companies in the print and packaging industry, which is comprised heavily of S-Corps with fewer than 500 employees.

Likewise, R&D investment is always supported in the increasingly tech-driven world of print. The Biden plan recognizes that 70% of U.S. business R&D, 30% of U.S. productivity growth, and 60% of U.S. exports are generated by domestic manufacturing, of which print is a key segment. Thus, the plan calls for increased R&D incentives, expanded access to capital for small companies, quadrupling of funding for Manufacturing Extension Partnerships, along with a new office at the Department of Commerce tasked with monitoring domestic supply chain capacity and funding to spur production of critical American-made goods.

While this likely welcome investment, because the funding mechanism of corporate tax cuts will hit large OEMs and suppliers, small printers may at the same time worry that such tax pain will be shared with customers in the form of increased prices.

The American Jobs Plan also addresses the need to invest in workforce development in manufacturing. It calls for creating career pathway programs from high school to in-demand jobs, attracting a more diverse population to manufacturing, and a major expansion of apprenticeships. Focus and action on the issue of workforce development will be cheered by printing and packaging companies who consider finding skilled labor a current pain point and feel angst about the industry’s next generation workforce.

However, the $48 billion funding of workforce development also includes initiatives to increase OSHA enforcement and promote union organization and collective bargaining via passage of the PRO Act (Protecting Right to Organize Act), both of which are concerning to employers.

There’s also the matter of what’s not yet in the American Jobs Plan – and proposals that Congress will add or subtract as the process moves forward. Once again, there are potential pros and cons here for the printing and packaging industry. Legitimate advocacy asks on behalf of the industry might include: funding to modernize the USPS’ fleet of aging delivery vehicles, passing financial stability provisions via postal reform to ensure USPS continues its key logistics role in Rural America, and including provisions of the bipartisan RECYCLE Act that would fund grant programs to improve the nation’s recycling rates and encourage consumer best-practices in recycling.

PRINTING United Alliance will actively engage on key aspects of the American Jobs Plan to explore inclusion of these and other potentially positive additions to the final legislation.

There’s also no question that the list of tax policy “pay fors” will change once Congress begins molding the President’s plan. The Biden Administration’s political strategy to target Corporate America as the sole funder of this plan is already meeting resistance. One day after the plan’s rollout, Democrat Chair of the powerful House Ways & Means Committee Richard Neal (Massachusetts) went on record to balk at the proposed tax increases as written.

Raising revenue to pay for this bill (as it shrinks and expands) will cause an all-out food fight amongst sectors of the business community. As each industry or company aggressively lobbies Congress to remove its tax hit, a replacement tax increase will target another industry or company. PRINTING United Alliance will be on the watch for any concerning tax hikes may be proposed. For example, eliminating or severely restricting the deduction for advertising expenses – which could cause a drastic drop in print and packaging – is perennially on Congress’ list of potential “pay fors” to fund any major legislation. PRINTING United Alliance will maintain its staunch opposition to this tax change and will conduct outreach to educate Congress about its harmful economic impacts on the printing and packaging industry.

At the end of the day, the third “P” in legislative sausage-making: Process may overshadow the other two “Ps”: Policy and Politics. President Biden has called for bipartisan ideas, dialogue and debate to shape the eventual outcome of the American Jobs Plan. After all, T&I bills are traditionally amongst the most bipartisan in Congress. The expansion of the proposal to include many semi-related (at best) Democrat policy priorities, however, and the reality of an evenly split Senate and slim party control in the House means it is likely that the process of reconciliation – which would allow the final version of the American Jobs Plan to pass with only Democrat support (and another tie-breaking vote from Vice President Harris) – will be the preferred route of moving this plan from proposal to law. There is also a recognition that are only so many bites at the reconciliation apple remain before the 2022 mid-term elections.

Expect to see the ensuing debate prevail as headline economic news for the next six months — at least. PRINTING United Alliance will provide additional analysis and action alerts to the industry as the American Jobs Plan unfolds.

In this article, Lisbeth addresses the rollout of President Biden’s transportation and infrastructure proposal known as the American Jobs Plan. More information about this topic can be found at www.sgia.org or reach out to Lisbeth should you have additional questions specific to how these issues may affect your business: llyons@printing.org.

To become a member of PRINTING United Alliance and learn more about how PRINTING United Alliance subject matter experts can assist your company with services and resources such as those mentioned in this article, please contact the Alliance membership team: 888-385-3588 / membership@printing.org.