US infrastructure plan to be unveiled in February in 2nd step of massive stimulus
NEW YORK (ICIS)--US President-elect Joe Biden plans to unveil details of a major US infrastructure stimulus plan in February in his first appearance before a joint session of Congress after announcing his first step of massive fiscal stimulus. On 14 January, Biden outlined a "step one" £1.9tr stimulus proposal called the "American Rescue Plan" to provide direct payments to individuals, an extension of enhanced employment benefits, financial aid for states and cities, and funds for coronavirus vaccine distribution, testing and prevention efforts. Next month, Biden will present to Congress a separate "Build Back Better Recovery Plan" focusing on infrastructure investment.
"It will make historic investments in infrastructure... manufacturing, innovation, research and development and clean energy - investments in a care-giving economy and in skills and training needed by our workers to be able to compete and win in the global economy of the coming years," said Biden. The President-elect cited a projection by Moody's that the plan would create more than 18m "good paying jobs". The "Build Back Better Recovery Plan" may not be dissimilar to Biden's campaign plan which encompassed £2tr in investment stimulus, much tilted towards green initiatives.
This included a £400bn procurement investment to "Buy American" products, materials and services to support US manufacturing. Plus, another £300bn in R&D and "breakthrough technologies" ranging from electric vehicle (EV) technology to lightweight materials (think plastics) to 5G and AI (artificial intelligence). The £2tr in "accelerated investment" was to be deployed during Biden's first four-year term.
This includes building and repairing roads and bridges, ports, airports, water systems, electric grids and broadband; investing in the automotive sector from parts to materials to EV charging stations; building and upgrading rail networks and working towards zero-emission public transportation; investing in green power (solar, wind); upgrading 4m buildings and "weatherizing" 2m homes to make them more energy efficient; constructing 1.5m sustainable housing units; and investing in clean energy technologies such as battery storage, emissions technology, green hydrogen and advanced nuclear. "It's time to stop talking about infrastructure, and to finally start building infrastructure so we can be more competitive," said Biden. He envisions "millions of good paying jobs to put Americans to work to rebuilding our roads, our bridges, our ports, to make them more climate resilient, to make them faster, cleaner, cheaper, to transport American-made goods across our country and around the world".
A key part of Biden's infrastructure plan will be buying products produced in the US. "Imagine a future made in America - all made in America and all by Americans. We will use taxpayer dollars to rebuild America.
We will buy American products, supporting millions of manufacturing jobs, enhancing our competitive strength in an increasingly competitive world," said Biden. He mentioned investments in R&D encompassing battery technology, artificial intelligence (AI), biotechnology and clean energy. Biden's plan during the campaign included a £400bn procurement investment to "Buy American" products, materials and services to support US manufacturing.
It included another £300bn in investments in R&D and "breakthrough technologies" ranging from electric vehicle (EV) technology to lightweight materials to 5G and AI. The huge potential investments in automotive and construction - two critically important sectors for the US chemicals industry - could launch the chemicals industry towards a far more robust recovery. It's not just a wide range of plastics and rubber that stand to benefit, but also coatings for everything from houses, buildings, bridges and road markings.
Polyurethanes for building and appliance insulation, oriented strandboard (OSB) and automotive seating, and epoxy resins for windmill blades and solar panels would also see a demand surge. It remains to be seen whether the stimulus plans pass Congress, and in what form. A flip of the two Georgia Senate seats to Democrats will result in a 50-50 split between Democrats and Republicans in the Senate, with the Democrat vice president breaking any tie on votes.
This will put Democrats in the driver's seat when it comes to economic policy and legislation, since the Democrats will also control the House of Representatives and the presidency. However, the ultra-slim margin of control in the Senate makes the agenda uncertain. Compromise among the parties will likely be needed to pass swift legislation on infrastructure stimulus.
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