President Joe Biden unveiled his multi trillion-dollar infrastructure plan this week in an effort to focus on bolstering the post-pandemic economy.
The plan includes $2.25 trillion in spending over eight years, raising the corporate tax rate to 28% to fund it, and includes spending on transportation, drinking water, broadband expansion, affordable housing, and an investment in American manufacturing, research and development, and job training efforts.
Speaking in Pittsburgh, Biden said the plan represents a vision to create “the strongest, most resilient, innovative economy in the world,” producing millions of “good-paying jobs” along the way.
Sweeping investments in electric vehicles, renewable power, and greenifying the electric grid are included as part of the plan, and many stocks in those areas rose following the plan’s unveiling.
And the investments in clean energy will be necessary to constrain global warming, one of Biden’s top priorities. “These are investments we have to make,” Biden said. “We can afford to make them. To put it another way – we can’t afford not to.”
As part of the plan, Biden is aiming to deploy 500,000 EV charting stations across the nation, sending shares of ChargePoint Holdings (NYSE: CHPT), Beam Global (NASDAQ: BEEM), and Blink Charging (NASDAQ: BLNK) up by double-digits.
Clean energy stocks First Solar (NASDAQ: FSLR), Sunrun (NASDAQ: RUN), and Sunnova Energy International (NYSE: NOVA) also moved higher. Caterpillar (NYSE: CAT), Eaton Corp (NYSE: ETN), and construction aggregate maker Martin Marietta Materials (NYSE: MLM) rose as well as more spending on roads, power lines, and bridges will mean more profit.
But while the plan would be good for these stocks and others, the massive package will face a tough road in Congress. While the GOP broadly supports efforts to rebuild roads, bridges, and airports, among other infrastructure-related measures, they don’t support raising taxes on corporations or the wealthy to do it.
Senate Minority Leader Mitch McConnell said on Thursday that the $2.25 trillion infrastructure push “is not going to get support from our side” if the corporate tax rate is raised to 28% as proposed.
Democrats too will have to balance competing interests within their party to approve a bill, which could prove challenging as more progressive lawmakers have called for increased investments to fight climate change in the plan.