WASHINGTON – Treasury Secretary Janet Yellen said Tuesday that President Joe Biden's spending proposals will address long-overdue U.S. infrastructure needs and prepare the country to meet future challenges.
In remarks before the National Association for Business Economists, Yellen called on Congress to support the Biden administration's $3.5 trillion “Build Back Better” initiative that would expand the social safety net and attack climate change. She also urged support for a $1 trillion bipartisan bill to address more traditional infrastructure, such as roads and bridges .
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“The investments in the president's agenda would be a sweeping overhaul of our national infrastructure," Yellen said.
She listed among the improvements a new electric grid and power structure, new passenger and freight rail systems, as well as fixes for roads and bridges that she have been “in disrepair and unsafe for decades.” She also listed broadband, new schools, clean drinking water and environmental remediation steps to help mitigate the impacts of climate change.
Yellen spoke as the administration and Democratic leaders are struggling behind the scenes in Congress to round up the votes for the two infrastructure bills as well as an increase in the debt limit and a stop-gap spending bill that needs to pass before Friday to avert a government shutdown.
“Over the course of American history, we have seen inflection points where policymakers had the courage to think big and act big to address longstanding flaws in the prevailing economic landscape,” Yellen said. “We face a similarly significant moment today where Congress can think big and act big to decisively send us down a better path.”
Yellen said that all the investments would be fully paid for through higher taxes on large, profitable corporations, improved enforcement of the existing tax system and savings from reforms to government health care programs.
However, the Biden “Build Back Better” program is facing strong opposition from Republicans who contend that the $3.5 trillion price tag is too high and who object to the increased taxes.
In a question and answer session, Yellen defended the administration's efforts to establish a global corporate minimum tax, something that Republicans on Capitol Hill have opposed.
“If you look at corporate tax rates globally, you see a steady downward progression over decades,” Yellen said. "That reflects a competitive race to the bottom."
Yellen said the administration is close to getting support from 140 countries to establish a minimum corporate tax of at least 15%. She said countries that seek to be tax havens such as Ireland, Estonia and Hungary have refused to join in this agreement but “we are working hard to find ways to bring them on board.”
She said she hoped to get a political endorsement from world leaders at a meeting of the Group of 20 major industrial countries in late October. She said provisions for changes that need to be made in U.S. law have been included in the $3.5 trillion spending plan the administration is trying to push through Congress relying only on Democratic votes.