Biden Stimulus Plan Pushes Costly Government-Mandated Project Labor Agreements
On March 31, the Biden administration released the American Jobs Plan, which proposes more than $2 trillion in federal spending over the next eight years to improve the nation’s infrastructure, including investments in transportation, broadband, energy, and drinking water as well as funding for schools and child-care facilities, affordable housing, workforce development and manufacturing.
Of note, the Biden plan calls on Congress “to ensure all workers have a free and fair choice to join a union by passing the Protecting the Right to Organize (PRO) Act, and guarantee union and bargaining rights for public service workers.” The ABC-opposed PRO Act threatens the fundamental rights of workers and job creators while putting the recovery of our economy at risk.
Biden’s plan also urges Congress to tie infrastructure investments funded under this plan to ABC-opposed government-mandated project labor agreements/community workforce agreements, prevailing wage regulations via the archaic Davis-Bacon Act and registered apprenticeship programs. All of these policies are likely to increase costs, reduce job creation, decrease the number of infrastructure projects and discourage the majority of ABC members and their skilled local workforce from competing for taxpayer-funded construction projects to rebuild their own communities.
According to the American Society of Civil Engineers, America will have an overall $2.6 trillion infrastructure funding gap by 2029.
ASCE estimates the U.S. has a $786 billion backlog of road and bridge capital needs, including $435 billion in repairing existing roads, $125 billion for bridge repair, $120 billion for targeted system expansion and $105 billion for safety enhancements, operational improvements and environmental projects.
While the Biden plan allocates $621 billion for “transportation infrastructure,” a large portion of this funding ($174 billion) is for investment in spurring the electric-vehicle market, and an additional $165 billion is dedicated to repairing public transit vehicles and freight rail, leaving approximately only $282 billion for the nation’s roads and bridges—a fraction of what is needed to truly modernize our nation’s transportation infrastructure.
Additionally, the plan says nothing about reauthorizing the expiring surface transportation legislation or shoring up the Highway Trust Fund in the future and is silent on a gas tax or a vehicle miles traveled tax as additional payfors.
Additional Provisions in the Biden Plan
- $111 billion for safer drinking water, wastewater and stormwater systems.
- $100 billion for high-speed broadband.
- $100 billion to upgrade the U.S. power infrastructure.
- $213 billion to “produce, preserve and retrofit more than two million affordable and sustainable places to live.”
- $137 billion for public schools, community colleges and child care facilities.
- $28 billion for veterans hospitals and federal buildings.
- $400 billion for “expanding access to quality, affordable home- or community-based care for aging relatives and people with disabilities.”
- $180 billion for research and development in new infrastructure technologies, climate science and innovation, and racial and gender inequalities in STEM and R&D
- $300 billion for strengthening manufacturing in the United States and creating new manufacturing jobs.
- $100 billion for workforce development, which provides $40 billion for a new dislocated-workers program to help workers gain new skills for in-demand jobs, $12 billion for targeting workers in underserved communities and $48 billion to expand existing registered apprenticeship, pre-apprenticeship and community college partnership programs.
While the plan calls for spending to complete these projects over the next eight years, it includes tax increases that would take 15 years to cover the cost of the $2 trillion plan, including:
- Increasing the corporate tax rate from 21% to 28%
- Increasing the minimum tax on U.S. multinational corporations to 21% and calculating it on a country-by-country basis to target profits in tax havens.
- Eliminating tax subsidies and tax credits for fossil fuel industries.
- Beefed-up IRS enforcement on corporations.
In a statement by ABC President and CEO Michael Bellaman, ABC called for fair and open competition and bipartisan ideas in the infrastructure plan.
“Our nation is in strong bipartisan agreement that America’s crumbling roads, bridges, schools and water, energy and transportation systems are in desperate need of modernization in order to accelerate our strong economic comeback and keep our country competitive in a global economy. ABC continues to advocate for any plan to modernize our nation’s infrastructure to include policies to reduce costly and ineffective regulations, ensure fair and open competition, address the construction industry’s skilled worker shortage, embrace new technology, and pursue value-adding, public-private partnerships that can help bring critical construction projects to market in a more economical and efficient manner. Unfortunately, much of the Biden plan ignores ABC’s infrastructure policy recommendations, while proposing tax increases on job-creating construction firms that are still recovering from the effects of the COVID-19 pandemic.
“While policy details are still emerging and the infrastructure plan will need to go through Congress, it is disappointing to see the Biden administration support the use of divisive government-mandated project labor agreement schemes on taxpayer-funded construction projects. Government-mandated PLAs exclude more than 87% of the U.S. construction workforce from rebuilding their communities and benefitting from well-paying middle-class jobs created by taxpayer investments in infrastructure. It also means taxpayers will spend 20% more per PLA project, which results in fewer infrastructure improvements and less job creation to help America rebound from the pandemic’s economic devastation. Coupled with a call for Congress to pass the Protecting the Right to Organize Act, it is clear the Biden administration’s infrastructure plan is designed to help powerful donors and special interests instead of all Americans.
“It is difficult to support an infrastructure plan that excludes the 87% of the workforce that chooses not to join a union and promotes the PRO Act, which eliminates workers’ freedom to choose how to pursue their career dreams, places their personal information security at risk and legalizes intimidation and secondary boycotting against a company’s supply chain and customers.
“We encourage President Biden to work with Congress and stakeholders to pursue a bipartisan path forward that would efficiently and effectively modernize our infrastructure, drive economic growth, welcome every construction professional and deliver value to all taxpayers. ABC will continue to work with Congress and the Biden administration to improve the infrastructure plan.”
Stay tuned for additional details about the American Jobs Plan and any PLA-related developments as it moves through Congress and receives additional attention from stakeholders.