- President Biden announced on Wednesday his $2 trillion economic recovery plan.
- The proposal earmarks $300 billion for small businesses and manufacturing.
- A major part of Biden’s plan incentivizes companies manufacturing goods in the US.
- See more stories on Insider’s business page.
President Biden announced on Wednesday his proposal to invest $2 trillion over eight years to bolster the economy, create jobs, and shore up supply chains.
The plan earmarks $300 billion for small businesses and manufacturing, with initiatives to bring more manufacturing stateside, update tax incentives, expand research and development, and install funding programs, among others.
In his speech addressing his plan, he noted the significance of investing in American-made products as well as groups traditionally left out of government contracts and access.
“Not a contract will go out, that I control, will not go to a company that is an American company with American products, all the way down the line, and American workers will buy the goods we need from all American communities that have historically been left out of these investments — Black, Latino, Asian American, Native Americans, rural, small businesses, entrepreneurs across the country,” Biden said.
The plan asks Congress to approve government spending in areas that the Biden Administration believes will help the economy. A White House official told CNN that the President aims to get his plan passed by this summer.
Here’s how Biden’s plan could impact small businesses.
This post will be updated as more information is released.
Promoting domestic manufacturing
A major part of Biden’s economic plan incentivizes companies manufacturing in the US, investing more than $52 billion in domestic manufacturers, with a focus on rural manufacturing and clean energy. He also called on Congress to create new programs for debt and equity financing for manufacturers.
To improve domestic manufacturing, Biden plans to allocate $50 billion to create a new office within the Department of Commerce that would monitor, fund, and support goods produced in the US. Another $50 billion would go towards semiconductor manufacturing and research.
Biden also wants to bolster support for the Manufacturing Extensions Partnership, a public-private network that helps manufacturers gain competitiveness, to create more opportunities for minority-owned and rurally-located small to medium manufacturers to participate.
Nationwide high-speed internet access
According to the Federal Communications Commission, more than 30 million Americans do not have access to high-speed, broadband internet where they live. Biden’s plan would “future proof” broadband infrastructure in underserved areas with a goal to reach 100% coverage across the country, including tribal land. This also includes reducing costs for customers and encouraging competition among internet providers.
The economy is only becoming more digital and ecommerce is booming as a low-cost entry into entrepreneurship. Cities like Chattanooga, Tennessee prove that democratizing quality internet access generates more jobs and business creation.
Marcus Shaw, CEO of a nonprofit startup accelerator in downtown Chattanooga previously told Insider that high-speed internet is the natural resource of the 21st century, essential for any local community to become a viable place to learn, work, and do business.
Read more: 4 cities serve as crucial case studies for how to close the wealth gap for Black entrepreneurs
Strengthening supply chains and increasing port capacity
Biden proposed investing $17 billion into coastal ports, inland waterways, ferries, and land ports of entry to better accommodate freight shipments. The Healthy Ports program will moderate air pollution affecting neighborhoods near the ports.
Read more: With global shipping in turmoil, small businesses have a chance to grab market share by following 4 principles
Research and development focused on technology and clean energy
Biden’s plan lays out a $180 billion investment in research and development (R&D), targeting technology advancements, semiconductors, energy, and biotechnology. This would include $35 billion towards developing clean-energy technology and a $5 billion increase in funding for other climate research.
Revitalizing urban and rural economies
Biden’s plan would allocate $20 billion to create a Community Revitalization Fund, which would support at least ten local innovation hubs to promote development, business creation, and building wealth. Projects would be led by local communities and close access gaps that disproportionately affect minorities and people who live in rural areas.
Small business funding
Biden proposed $31 billion go towards small business programs that provide funding through credit, venture capital, and R&D initiatives. This includes incubators and innovation centers that support entrepreneurship in minority and underserved communities.
Read more: Small-business owners share the lessons they learned after a year of selling the world’s most in-demand product
Taxes and incentives
Biden’s Made in America Tax plan ensures corporations pay federal taxes, particularly calling out Fortune 500 companies, and raising the corporate tax rate to 28%. The administration estimates these changes will raise more than $2 trillion over the next 15 years.
In an effort to discourage companies from offshoring production and outsourcing jobs, the plan would increase the global minimum tax to 21% for corporations operating in multiple countries. It would also get rid of an exemption that allows US companies not to pay taxes on the first 10% return on foreign assets.
Biden also plans to give tax credits for companies that bring jobs back to the US and eliminate deductions for companies offshoring jobs.
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