The plan includes funding for energy storage, smart grid
technologies, microgrids and electric vehicles—paid for by reversing parts of
the Republican tax bill.
Senate Democrats released a $1 trillion infrastructure plan Wednesday framed as a
way to give Republican "tax giveaways" for the wealthy back to the
American people.
While the plan is unlikely to be embraced by President Trump
or gain traction in a GOP-controlled Congress, it serves as a meaningful policy
document as the nation heads into a grueling midterm election season.
"Our plan will improve the daily lives of millions of
American families by creating a 21st century transportation network, rebuilding
water systems and schools, making our electric system stronger and our
communities more resilient, and much more," the Democrat plan states.
"And we will make these critical investments without undermining important
environmental protections."
The White House unveiled a $200
billion infrastructure plan last month that sought to “stimulate
at least $1.5 trillion in new investment over the next 10 years,” largely from
local and private sources. Many environmental and clean energy groups opposed
the plan, which they say is damaging or does nothing to improve U.S. health and
prosperity. The plan is also facing strong pushback from local lawmakers, economists and even some in Trump's own party over how to pay for it.
Democrats took a different tack by boosting federal spending
and paying for it through additional tax reform. Major ticket items include
$140 billion to repair roads and bridges, $115 billion for water and sewer
infrastructure, $115 billion to update public transportation, and $40 billion
to enable universal high-speed internet access.
For the power and cleantech sectors, the proposal includes
an attractive $80 billion to "bring innovation to America's energy
grid." That funding would go toward research, development and
demonstration programs for "energy storage and other advanced grid
technologies, including microgrids and distribution-level investments" and
would "help integrate more renewable energy onto the grid, empower
consumers, improve the security of the grid, and help meet electricity demand."
Smart buildings, smart transportation systems and smart grid
technologies would also benefit from the $80 billion carve-out. In addition,
the federal government would invest directly in advanced building management
and controls at government-owned facilities under the Democratic plan, which
states that smart technologies have the potential to increase U.S. GDP by 25
percent to 40 percent by 2030.
The plan also cites $300 billion in U.S. financial losses
last year due to natural disasters, which Democrats say justifies increased
grid resilience spending. The proposal goes on to highlight Democrat lawmakers'
desire to boost investments in high-efficiency transmission lines, efficiency
upgrades, and federally owned assets, including the Bonneville Power
Administration and the Tennessee Valley Authority. President Trump's
infrastructure plan would have privatized those assets.
Policy measures accompanying the Democratic infrastructure
budget include consolidating almost all existing renewable energy tax
incentives into three new provisions that provide "a dramatically simpler
set of long-term, performance-based energy incentives that are
technology-neutral and promote clean energy in the United States."
Democrats also proposed new incentives based on performance, rather than
specific technologies.
The document includes the following policy changes:
- Incentives for clean electricity: A technology-neutral tax credit for domestic production of clean electricity. This would be open to all resources, based on a simple rule: the cleaner the facility, the larger the credit. It would be available as either a production tax credit of up to 2.3 cents per kilowatt-hour or an investment tax credit of up to 30 percent. The credit would also be available for carbon-capture equipment, energy storage, and investments in grid security and resiliency to further reduce emissions and increase grid reliability.
- Incentives for energy conservation: A performance-based tax credit for energy-efficient homes and tax deduction for energy efficient commercial buildings -- the more energy conserved, the larger the incentive. The incentives promote energy-efficient construction of new buildings, as well as retrofits to existing buildings, encouraging rehabilitations to reduce energy consumption.
- Incentives for clean transportation fuel: A technology-neutral tax credit for domestic production of clean transportation fuel. Again, this would be open to all resources and be based on the rule: the cleaner the fuel, the larger the credit. This would provide a production tax credit of up to $1 per gallon. The existing tax credit for fuel cell vehicles would be made permanent, and the per-manufacturer limitation for the electric vehicle tax credit would be eliminated, accelerating the transition to a cleaner transportation system.
Furthermore, under a separate $30 billion effort to promote
innovation transportation solutions, the Democratic plan calls for $3 billion
for EV charging infrastructure and refueling corridors for hydrogen, propane
and natural gas.
To pay for the $1 trillion plan, Democrats propose reversing
certain tax breaks. For instance, the corporate tax rate, which was slashed
from 35 percent to 21 percent under the Republican plan, would climb back to 25
percent under the Democratic plan. Democrats would also restore the estate tax
exemption to $11 million for couples, after the GOP bill doubled it.
Environment and clean energy groups gave a warm greeting to
the Senate proposal.
"With this proposal, Senate Democrats are demonstrating
what real leadership on infrastructure looks like: a tangible federal
investment that drives us towards a clean energy future, plans for a changing
climate, protects our natural resources and makes smart transportation
choices," said Sara Chieffo, vice president for government affairs at the
League of Conservation Voters. "We know that we don't need to sacrifice
our environmental safeguards in order to boost our nation's
infrastructure."
Stephanie Gidigbi, senior adviser to the Natural Resources
Defense Council, called the plan "a genuine 21st century infrastructure
proposal."
While both political parties agree the U.S. is in desperate
need of an infrastructure overhaul, paying for it remains a sticking point.
Some business groups say it's imperative to raise the gas tax in order to pay for infrastructure
upgrades, but the idea has been panned by Republicans. GOP lawmakers are also
rejecting the Senate Democrats' latest tax reform proposal to fund roads,
waterways and the grid.
“If Chuck Schumer and the Senate Democrats spent more time
working with Republicans on infrastructure and less time thinking of new ways
to raise taxes on hard-working Americans, we would be making more progress,”
said U.S. Senator John Barrasso, chairman of the Senate Committee on
Environment and Public Works, in a statement Wednesday.
“More than 90 percent of American workers have seen more
money in their take-home paychecks because of the tax relief law," he
said. "Now Senate Democrats want to take their hard-earned money away from
them."
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