Pittsburgh — US steel and aluminum organizations issued support for President Joe Biden's proposed infrastructure plan March 31 as an investment in infrastructure, coupled with Buy America provisions, is expected to boost demand.
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During a speech in Pittsburgh, Biden laid out his vision, known as the "American Jobs Plan," which focuses on modernizing US infrastructure, improving the nation's competitiveness and addressing climate change.
The proposal, which is roughly $2 trillion in investment over an eight-year period, calls for $621 billion in transportation infrastructure funding to modernize 20,000 miles of highways and roads, replace 10 of the most economically significant bridges in the US in disrepair, and repair an additional 10,000 bridges.
The plan also calls for modernizing public transit and investing in reliable passenger and freight rail service, as well as a $174 billion investment in the electric vehicle market.
"[The American Iron and Steel Institute] greatly appreciates President Biden's commitment to building back better America's roads, bridges, waterways, rail, electrical grid and other critical infrastructure – and doing it with American-made steel," AISI CEO Kevin Dempsey said in a statement.
Biden, who signed an executive order strengthening Buy America provisions Jan. 25, said all investments made under this program would use domestic products throughout the supply chain.
Requiring Buy America provisions creates more domestic steel demand while also providing environmental benefits, as the US steel industry has the lowest carbon dioxide intensity of any major steel producing country, Philip Bell, president of the Steel Manufacturers Association said in a statement.
Each $1 billion in infrastructure spending requires about 50,000 st of steel, and each trillion dollars invested in infrastructure has the potential to create 11 million jobs in the US economy over the next decade, according to the AISI.
"We haven't funded infrastructure properly and it has become a drag on the economy – one that continues to grow with every passing day," Bell said. "If we invest as we should, we will create millions of manufacturing jobs, strengthen US competitiveness globally and save households money all while setting a new bar for sustainability."
Tom Dobbins, CEO of the Aluminum Association said the investment also provides an opportunity to shore up US aluminum supply chains and increase manufacturing self-sufficiency.
"Aluminum is an essential element to America's infrastructure future – used widely in the electric grid, solar panels, electric vehicle charging stations and buildings of all kinds," Dobbins said. "Major investment will also provide a once-in-a-generation opportunity to modernize the nation's recycling infrastructure."
Funding questions remain
It will still take work to get a divided Congress to pass a final bill, however Biden said he is open to negotiations on how to fund a large-scale infrastructure package. As part of his proposal, Biden has put forth raising the corporate tax rate from its current level of 21% to 28%, combined with measures designed to stop the offshoring of profits.
When it comes to funding, the US needs to have a well-funded, long-term and comprehensive approach to its infrastructure needs, Bell said. Funding for the proposal should include an "all of the above strategy" that incorporates increased user fees, revenue from gas taxes and public-private partnerships, he said.
Dempsey said the AISI believes the best way to fund infrastructure is through a dedicated user fee rather than through corporate income tax revenue which go through the general treasury.
"AISI has long advocated for bolstering the user fees that are dedicated to funding the Highway Trust Fund and other infrastructure funding mechanisms," Dempsey said. "This is important to provide the needed certainty in terms of funding for states to implement long-term steel-intensive infrastructure projects. While this is not currently part of the president's proposal, we look forward to continuing to work with the administration and Congress to develop a bipartisan legislative package that supports long-term, sustainable funding and ensures that steel that is melted and poured in the US is used to rebuild America's roads, bridges, water systems and energy infrastructure."