After the passage of President Biden’s American Rescue Plan Act, Wall Street investors and the nation’s leading economists predict another trillion-dollar infrastructure bill that will further help the economy recover in the wake of the Covid-19 Pandemic.
Because Biden’s initial spending plan was met with little resistance after it passed through the House and Senate, experts expect that Biden will be able to quickly establish a new spending bill to improve infrastructure across the country.
In addition to infrastructure, Treasury Secretary Janet Yellen says that “education and training, climate change [and] other longer-run priorities will be on our list to address next,” indicating that Biden’s American Rescue Plan Act is just the beginning of a long string of legislation that will stimulate the American economy.
Although financial experts are certain President Biden will attempt to pass more spending plans, they are unsure how much the President will allocate to tackle different issues. For example, Goldman Sachs believes that the upcoming infrastructure bill could range anywhere from $2 trillion, all the way to $4 trillion depending on the different problems addressed by the legislation. If Biden intends to include additional provisions in the bill, like for childcare or healthcare, then the cost could rise even more.
Overall, Citigroup is estimating that the upcoming infrastructure bill will allocate $750 billion to infrastructure and $1 trillion to finance the expanded child tax credit. Along with their estimate, Citigroup also noted a 30 percent possibility that there will be no additional spending plan passed before the end of the year.
President Biden’s massive spending plans are being met with some concern from conservative investors and members of the government who believe that he is overstepping. Primarily, big-time corporations and wealthy members of Congress are concerned about where the money will come from to finance Biden’s spending plans. The largest contributions to Biden’s plans will come from large corporations, which will see a tax increase from 21 percent up to 28 percent. The seven-percent increase will generate $1 trillion to help finance Joe Biden’s spending plans.
Further, there is an additional concern that Biden’s stimulus plans will harm the stock market and lead to extreme inflation. Investors are also concerned that government bonds will again contribute to the decline in the largest tech stocks.
Conversely, Biden’s upcoming infrastructure plan will help increase the value of American construction companies like Caterpillar and US Concrete. Even before the bill has come to congress, the stocks have seen increases of 67 percent and 27 percent respectively. The companies should continue to increase in value as Biden’s plan takes shape and heads to congress.
The upcoming infrastructure plan, like the previous American Rescue Plan Act, will also massively boost the GDP. Already, the American Rescue Plan act is leading financial firms to estimate at least a seven percent growth to the GDP over the course of 2021 — far outpacing the rapid growth of China, which is conservatively estimated at six percent total for 2021.