Make up for lost time and prepare for the future. These are the two ambitions of the colossal Biden plan in favor of infrastructure that the American president promulgates on Monday, November 15. After months of battle with elected Republican officials, but also a left wing of the Democratic Party who demanded more, Joe Biden finally obtained the green light from Parliament to commit $ 1,200 billion in spending (1,050 billion euros) over ten years.
→ CONTEXT. US Congress passes Joe Biden’s infrastructure plan
The American president should sign this text in the Oval Office in the presence of members of Congress, because it is one of the major acts of his presidency. He has been praising this program for weeks – “As there is only one per generation” – that should “Providing millions of well-paid jobs for Americans”.
On the White House website, this plan is presented as “The biggest investment program since the space race” in Kennedy’s time. These expenditures will finance an upgrading of public equipment, the state of which leaves much to be desired, while the American federal state has not stopped cutting spending for fifty years.
Today, a fifth of America’s highways are in dire condition; ten million households and 400,000 schools do not have access to drinking water … “As a percentage of GDP, public investment has fallen by 40% since the 1960s”, argues the White House.
A rain of billions for the roads, the rail networks
The Biden plan will devote 110 billion to renovating roads, 40 billion to repairing bridges, 17 billion to canals, dams and ports, 25 billion to upgrading airports and 55 billion to improving the distribution of water. In particular, this involves devoting 25 billion to the total elimination of lead pipes and to the fight against water pollution.
→ READ. United States: Joe Biden signs his $ 1.9 trillion support plan
The plan, the implementation of which has been entrusted by the US president to former New Orleans mayor Mitch Landrieu, also aims to accelerate the transition to cleaner modes of transport with the creation of charging stations. recharging for electric vehicles along highways (for 7.5 billion), renovation of rail networks (66 billion) or the replacement of the famous yellow school buses by electric models (5 billion).
The Biden plan also devotes 65 billion to the renovation of electricity networks, in order to adapt them to the production of renewable energies. Finally, this investment plan aims to support the transition to a more digital economy. It will invest 65 billion to develop networks in order to improve the coverage of rural areas and underprivileged neighborhoods. Today, 35% of Americans living in rural areas do not have access to high-speed internet.
US port congestion
On Wednesday, November 10, President Joe Biden visited the port of Baltimore, on the East Coast, to try to convince that this plan will quickly have positive consequences for the Americans. He promised that the work could start within sixty days. The situation of freight ports appears to be a priority because they are congested today.
With the economic recovery, containers are pouring in. But due to lack of sufficient capacity, the ports are unable to unload quickly enough, which contributes to creating shortages and contributes to price increases. Forty percent of US merchandise imports pass through two ports, Los Angeles and Long Beach. They saw their activity increase by 17% compared to the pre-crisis period, so much so that more than 100,000 containers are still waiting in each of these ports to be able to be cleared.
→ ANALYSIS. US Central Bank initiates return to pre-crisis situation
The staff have agreed to work 24 hours a day. This is not enough. In Baltimore, Joe Biden promised to s’“Attack head-on” to the problem and ensured that “Stores will soon be fully stocked”.
The economy risks overheating
Thirteen Republican elected officials voted in favor of the Biden plan in the House, helping to pass it. This does not prevent the opposition from criticizing the Democratic president, arguing that the rapid increase in public spending will accelerate inflation.
→ ANALYSIS. Inflation worries both Brussels and Washington
The White House, on the contrary, tries to make it understood that investments in transport will improve flows and therefore lower prices. However, this will only be visible in the long term. And the price hike, on the other hand, is immediate.
Inflation above 6%
Inflation accelerated much more than expected in the United States. Prices rose 0.9% in October, according to the consumer price index. On a rolling year, the increase is therefore 6.2% against 5.4% in September. This is the largest increase recorded in twenty years. Inflation affects all sectors even though it is particularly important for energy, housing, food, cars and trucks. It comes from persistent problems in supply chains and rising energy.