Sen. Chris Van Hollen, D-Maryland, visited CCBC Dundalk on June 3 to tour the community college’s professional development and jobs training program.

DUNDALK — Sen. Chris Van Hollen, D-Maryland, visited CCBC Dundalk on June 3 and was given a tour of the community college, including its offsite CDL training location in Sparrows Point.

The visit was one of many around the state for Van Hollen. Like his colleague Sen. Ben Cardin, D-Maryland, other Democratic legislators and members of Pres. Joe Biden’s administration, Van Hollen is promoting Biden’s American Jobs Plan (AJP), a proposed $2.2 billion bill that includes $1.7 trillion in infrastructure spending. Van Hollen also talked about the announcement from Gov. Larry Hogan to end pandemic enhanced unemployment benefits next month, and about assistance provided from both the CARES Act and the American Rescue Plan.

“I’m here to talk to teachers, professors and students about how the assistance over the last year has kept programs going,” Van Hollen said. “The great programs here at the community college connect students with jobs.

“That is the whole design here. There are certificate programs. There are degree programs; and the idea is that if you go through these programs, you develop skills and you will get a good-paying job. We strongly support that.”

According to a White House fact sheet, Maryland has 273 bridges and more than 2,200 miles of highway in poor condition. It also said that commute times have increased by more than five percent over the last decade, and each motorist contributes $637 in road repair costs. If the AJP reaches Biden’s desk, the federal government is expected to invest more than $600 billion in national infrastructure spending, including $115 billion to repair roads and bridges.

Tradepoint Atlantic (TPA), a manufacturing hub and major community partner in the area, has become a major employer in the area, and its growth is expected to continue. Manufacturers account for more than 5.8 percent of total output, employing more than 108,000 workers, according to the White House. The AJP proposes to invest $300 billion nationally on manufacturing.

“Pres. Biden’s American Jobs Plan would make this a more permanent feature of our education and workforce training system,” Van Hollen said.

But the AJP has been met with pushback. The independent Tax Foundation found through its own model that the bill would “{span}the combined effects of the tax changes and spending would reduce U.S. gross domestic product (GDP) in the long run by 0.5 percent and result in 101,000 fewer U.S. jobs.”

The Tax Foundation also claimed that the tax changes proposed in the AJP would reduce Gross National Product (GNP) by 0.3 percent, and wage rates would drop 0.5 percent.

The AJP proposes several tax changes, including raising the federal corporate tax rate from 21 percent to 28 percent, and placing a 15 percent minimum corporate book income tax on firms that net more than $2 billion. Infrastructure spending in the AJP is proposed to include {span}spending on transportation, utilities, school and hospital buildings, research and development (R&D), and manufacturing, with the spending phasing out completely over the 10-year budget window.

The Tax Foundation said its model included assumptions that are consistent with those of the Congressional Budget Office (CBO), including an assumption the CBO shared in 2016 that federal investments deliver a return of five percent, half that of private sector investing. The CBO has not yet released its own data related to the AJP, but did propose changes to federal investment in a separate study.

In a CBO document titled “Budgeting for Federal Investment,” the CBO stated that the federal government views infrastructure spending the same as it views all other forms of spending – on a cash basis. This means, according to the CBO, that budget authority is required upfront, when resources are committed to the investment. “{span}No depreciation is reported, and spending on maintenance is recorded as it occurs,” according to the document

Likewise, to the extent that federal investments affect cash flows in future years—for example, by generating income or by affecting an agency’s operating costs—those effects are reported in the years when they occur.”

The CBO offered accrual spending as an option over cash spending. Under accrual spending, it would account for federal investment by year, as opposed to accounting for the total cost up front. For example, if the federal government passed an investment proposal worth $5 billion over five years with an expected use live of 50 years, the budget would report $100 billion ($5 billion divided by 50) of both budget authority and projections for each year over that 50-year period. {span}Costs under the accrual approach would be significantly influenced by assumptions about the useful life of the investment, the document.

The CBO proposed six options for changing how the federal government views investment. One option is to adopt an accrual approach with a separate capital budget. That model, which is based on the financial accounting model of capital budgeting used by the United Kingdom and New Zealand, according to the CBO, would report depreciation of physical capital as a cost in agencies’ budgets and in the government’s overall budget.

Another option is to unify a budget with both cash and accrual measures. According to the CBO, agencies {span}would report budget authority and outlays for depreciation of their investments for each program on an accrual basis. The CBO also claimed {span}depreciation would flow to on-budget capital accounts and thus be netted out as an intragovernmental transaction.

Other options proposed by the CBO include implementing separate operating and capital budgets, a method currently used by the states; a separate cap on investment funding for budget enforcement purposes while retaining cash-based budgeting for investment spending within the unified budget; creating a mandatory fund in the unified budget, limiting the fund to {span}purchases and long-term capital leases of federal buildings; and having agencies {span}provide supplemental information on investments to allow policymakers to judge their value without changing the budget numbers or budget enforcement procedures.