Study: Biden’s $2.2 trillion jobs plan would eliminate jobs

Study: Biden’s $2.2 trillion jobs plan would eliminate jobs
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A study by the Tax Foundation found that Joe Biden’s $2.2 trillion “American Jobs Plan” would result in America having fewer jobs and a smaller economy. Reason Magazine says the reality would be even worse. It calls Biden’s plan “a jobs plan that isn’t about jobs, and an infrastructure plan that isn’t about infrastructure.”

The Tax Foundation found that the “the combined effects of the tax changes and spending would reduce U.S. gross domestic product (GDP) in the long run by 0.5 percent and result in 101,000 fewer U.S. jobs.” Reason thinks the economy could shrink much more than the Tax Foundation predicts. That’s because the Tax Foundation relied on “conventional assumptions” about the returns on infrastructure spending that are too generous, because Biden’s infrastructure plan isn’t “actually about infrastructure,” and instead spends money on less useful things.

Biden’s plan spends lots of money on political pork and obsolete technologies. So it won’t have the 5% return assumed by the Tax Foundation.

Much of the spending in Biden’s so-called “infrastructure” plan is not for infrastructure at all. “Less than 5 percent” will go to “traditional road and bridge projects,” says the Heritage Foundation. Instead, it will fund “massive amounts of corporate welfare, a huge expansion of Medicaid,” and “a ‘Civilian Climate Corps’ that would use billions of taxpayer dollars to fund legions of environmental activists.” $400 billion will be spent on the “care economy.”

Biden’s infrastructure plan raises the corporate tax rate to a rate higher than it is in most countries. That would drive some companies overseas to countries with lower tax rates.

By raising taxes, Biden’s plan would also lead to companies spending $1 trillion less on infrastructure and fixed investment, such as privately-owned freight railways, power stations, and pipelines.

The Tax Foundation understates the jobs lost due to the Biden plan, because its study doesn’t take into account the impact of its provisions targeting independent contractors.  The Biden plan contains the Protecting the Right to Organize (PRO) Act, modeled on a California law that wiped out the livelihoods of thousands of independent contractors. It also would “allow the federal government to stomp out” state right-to-work laws in 27 states “that forbid unions from forcing non-members to pay a share of union dues,” notes Reason. States with right-to-work laws add jobs faster than other states, and such laws lured some foreign automakers into setting up factories in the Sun Belt, creating thousands of American jobs.

The Biden administration has oversold what its infrastructure spending will do. It says it wants to make America the “global leader” in high-speed rail. But “Biden’s infrastructure plan doesn’t even include any money for high‐​speed trains,” notes transportation expert Randal O’Toole.

Even if Biden’s proposed spending on railways did go into high-speed rail, it would still be a waste of money, because high-speed rail is slower and more expensive than flying. In 2018, South Korea abolished its celebrated high-speed rail line because it couldn’t cover the costs of keeping the trains running, and ridership was only 3% of what planners had projected.

High-speed rail is much more expensive than air travel. Airfares averaged just 14 cents per passenger-mile in 2019, whereas fares on Amtrak’s high-speed Acela averaged 90 cents per passenger-mile. High-speed rail lines cost a lot more than highways. A four-lane freeway costs $10 million to $20 million per mile. By contrast, $100 million per mile mile has been spent building California’s incomplete high-speed rail line on flat ground.

High-speed trains are bad for the environment. They compete with freight trains for track, crowding out more environmentally-friendly freight trains. Freight trains transport much more cargo per unit of energy than passenger trains, and give off less emissions than trucks.

Hans Bader

Hans Bader

Hans Bader practices law in Washington, D.C. After studying economics and history at the University of Virginia and law at Harvard, he practiced civil-rights, international-trade, and constitutional law. He also once worked in the Education Department. Hans writes for and has appeared on C-SPAN’s “Washington Journal.” Contact him at


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