— This is the script of CNBC's news report for China's CCTV on June 25, 2021, Friday.
There is $579 billion worth of new spending in the over $1 trillion infrastructure plan. Within that $312 billion is intended to be spent on transportation while $266 billion for other projects. The traditional infrastructure sector, like roads and bridges, is the biggest winner, with a grant of $109 billion.
Joe Biden
"We have a deal."
Sen. Susan Collins (R, Maine)
"We have been talking about the need for a large infrastructure package for decades, today, we are delivering."
According to Biden, the infrastructure plan will create millions of jobs. The U.S. equity market closed higher in response to the news, with stocks directly related to the plan performing particularly well. Companies like Vulcan Materials, the largest construction material provider in the United States, and Caterpillar, a heavy construction equipment manufacturer, finished with strong gains. Commodities like cement and steel will also be supported by the infrastructure plan. Prices of construction materials have already been going up amid the pandemic. We will monitor whether or not the new plan will further drive inflation.
While traditional infrastructures benefit a lot from the new plan, spending on new infrastructures related to climate and environment came less than expected, which, according to Biden, is a "compromise". Though Bided claims the new plan has won support from both parties, it is yet to be approved by Congress. Some Republicans, as well as progressive Democrats, aren't happy with the compromise deal.
Joe Biden
"My party is divided but my party is also rational, they can't get every single thing they will, but if they have a bill that is good, they're gonna vote no? I don't think so."
To makeup, Biden wants to pass a separate bill that includes his other priorities, such as childcare and clean energy.
In addition to expenditures, disagreements also remain on how to raise money to fund the plan. Biden wants to raise taxes, but Republicans have been resisting the idea. And another issue may come along if there is not enough funding – debt. On Wednesday, U.S. Treasury Secretary Yellen said the nation could face a serious risk of default as soon as Congress's August recess, and she urged lawmakers to suspend or raise the debt ceiling before then. In 2011, the standoff between the two parties on raising the federal debt ceiling caused the S&P to downgrade the ratings on America, which led to a big sell-off in markets.