Investing in your clients: The American Jobs Plan

Putnam Investments, 04/20/21


The Biden administration recently introduced its $2 trillion infrastructure proposal, the American Jobs Plan, that seeks to invest in both infrastructure and jobs. Still far from a done deal, the sweeping plan has the potential to impact many parts of the American economy, including your clients’ investments.

What’s in the massive plan, and how may the proposals affect your clients? Here’s a high-level look at the plan as it exists today, and some of the sectors it could impact.

The American Jobs Plan includes traditional infrastructure provisions: repairing aging roads and bridges, tackling transit projects, and rebuilding schools and hospitals. However, it also seeks to address caregiving, housing, manufacturing, and research and development.

The plan focuses on four main areas:

Transportation infrastructure ($621 billion)

In addition to modernizing and repairing roads, railways, bridges, and highways, the plan proposes significant new investments ($174 billion) in electric vehicles. This includes building a national network of 500,000 EV charging stations, providing tax incentives for electric vehicle purchases, and electrifying buses and the federal diesel transit fleet.

Quality of life at home ($650 billion)

Addressing quality of life in homes, schools, and commercial buildings is the largest part of the plan. A proposed $213 billion would be spent to build, preserve, and retrofit more than two million affordable homes and commercial buildings; $100 billion is dedicated to building and upgrading public schools. The proposal also focuses on replacing all lead pipes in the drinking water system, upgrading the electrical grid, and creating universal access to affordable broadband.

Help for caregivers ($400 billion)

The plan expands the traditional view of infrastructure to include what it calls “infrastructure of care.” It allocates $400 billion to improve access to home- or community-based care for elderly people or people with disabilities. Two key provisions of the plan are boosting pay for care workers and expanding the Medicaid “money follows the person” program to make long-term care services more available to people.

Research and development, manufacturing, and training ($480 billion)

The White House Fact Sheet on the plan states that “the nation is falling behind its biggest competitors on research and development, manufacturing, and training.” The plan proposes $180 billion in new research and development, emphasizing clean energy, reduced emissions, and climate change research. This total also includes $100 billion for worker training and an increase of worker protection systems. Another $300 billion would go toward manufacturing, including support for domestic production of technologies and critical goods.

Republican elected officials and business groups have opposed the plan — in particular, the tax increases that they see damaging U.S. investment and competitiveness — making its fate far from certain. However, with the potential for up to $2 trillion to spend, and a wide-ranging view of infrastructure and jobs, the American Jobs Plan has the potential to influence many parts of the economy.

As you track developments on the American Jobs Plan and potential infrastructure investments, FundVisualizer can help you explore the impact on client portfolios. Visit fundvisualizer.com for resources on analyzing portfolios and viewing asset allocations, sectors, top holdings, and more.

The views and opinions expressed are those of the author, are subject to change with market conditions, and are not meant as investment advice.

325947 4/21

You may also be interested in: