Economist Defends $2 Trillion Price Tag of Biden's Infrastructure Plan: 'The Need Is Very Large'

The chief economist at Moody's Analytics has come to the defense of President Joe Biden on the cost of his infrastructure plan, which could fall somewhere between $2 trillion and $3 trillion.

"It's large, but we've got a large problem," Mark Zandi told CNN host Jake Tapper, noting that the United States has been slowly reducing infrastructure spending since the 1950s.

"The current amount of investment we're doing is barely, barely enough to keep pace with just the maintenance of the infrastructure," he continued. "And we can all feel it, right? … The package is large, but the need is very large."

Biden will travel to Pittsburgh on Wednesday to roll out his infrastructure overhaul proposal. The so-called American Jobs Plan will invest about $2 trillion over the next eight years.

The proposal would put $621 billion into transportation infrastructure such as bridges, roads and airports; $400 billion to care for elderly and disabled Americans; $300 billion to improve drinking water and expand broadband access; and $580 billion to enhance American manufacturing.

Through the plan, the administration said it hopes to show it "can revitalize our national imagination and put millions of Americans to work right now in work that's desperately needed for the nation."

But Republicans have been sounding the alarm on the price tag for the plan and White House's plan to pay for it by raising the corporate tax rate to 28 percent. The GOP cut the tax to 21 percent from 35 percent as part of former President Donald Trump's 2017 tax law.

GOP Senate Minority Leader Mitch McConnell of Kentucky told reporters Wednesday that if the plan is "going to have massive tax increases and trillions more added to the national debt," it's not likely he will support it.

Joe Biden infrastructure overhaul proposal
President Joe Biden delivers remarks on the COVID-19 response and the state of vaccinations at the White House on March 29. Biden's next legislative goal will be to pass a $2 trillion infrastructure plan. Drew Angerer/Getty Images

"It is paid for, in large part, through our corporate taxes, not completely, so it does add to the deficit in the longer run, but it's modest in the grand scheme of things," Zandi told CNN.

When asked by Tapper whether an infrastructure investment would stimulate the economy in the same way as tax cuts, the economist said yes.

"I would argue that higher corporate taxes has a marginal negative effect, the benefit of the infrastructure spending is quite substantial—so the net benefit of all of this is very positive through the economy [in the] long run," Zandi said.

An administration official told Newsweek that investing in infrastructure and creating jobs is a priority that "brings Americans together from all backgrounds and political persuasions" including "over 80 percent of Republicans."

"If folks like the plan but have a different way to pay for it, we are open to hearing their suggestions," the official said. "This investment is a priority, and creating millions of good-paying, middle class jobs—especially in this moment of unprecedented crisis—is absolutely worth some of the wealthiest Americans contributing their fair share."