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News Brief: Infrastructure Funds, Vaccine Batch Ruined, Detention Costs

RACHEL MARTIN, HOST:

President Biden's plan to revamp the nation's aging infrastructure is ambitious.

NOEL KING, HOST:

It is. It calls for spending on roads, bridges, drinking water, the electric grid, the Internet and a whole lot more. Biden talked in Pittsburgh yesterday outlining what he's been calling the American Jobs Plan.

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PRESIDENT JOE BIDEN: It's a once-in-a-generation investment in America unlike anything we've seen or done since we built the interstate highway system and the space race decades ago.

KING: And it is just part one. He's expected to call for trillions of dollars in additional spending on American families in the next few weeks.

MARTIN: All right. So the big question now - how to pay for it. For that, we turn to NPR chief economics correspondent Scott Horsley. Hi, Scott.

SCOTT HORSLEY, BYLINE: Good morning, Rachel.

MARTIN: Where's the money going to come from?

HORSLEY: Biden wants to send the bill for part one of his plan to corporate America in the shape of higher taxes on corporate profits. That's a big turnaround from what we saw in the last administration, which cut corporate taxes all the way from 35% down to 21%. Biden's plan would reverse about half that corporate tax cut, move the corporate rate back to 28% and also make it harder for multinational corporations to avoid paying taxes by parking profits in other countries. You know, the average multinational firm paid just 8% federal taxes the year after the GOP tax cut was passed. Another way to look at this, Rachel, corporate taxes paid at both the state and federal level now add up to about 1% of the U.S. economy. Other big countries collect two or three times that much from corporations.

MARTIN: So even though corporations are going to keep some of the Trump tax cuts, they're still not going to be happy about paying any higher taxes, I imagine. What are business leaders saying?

HORSLEY: Yeah, you're hearing some pushback quickly to the Biden plan. Both the Chamber of Commerce and the Business Roundtable put out statements applauding the president for investing in infrastructure but saying that should be paid for by the people who use the roads and the pipelines and the power grid, not corporations. And you're likely to hear something similar from Republicans in Congress. Take a listen to how GOP Congresswoman Ann Wagner grilled the Treasury secretary, Janet Yellen, last week when Yellen just mentioned the possibility of higher taxes.

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JANET YELLEN: We do need to raise revenues to support the spending that this economy needs to be competitive and productive...

ANN WAGNER: Let me just say this, Secretary Yellen. We know that raising the corporate tax rate results in higher costs for small businesses, schools and American households.

HORSLEY: So it's possible Democrats will try to push this plan through on a straight party line basis, as they did with the $1.9 trillion rescue package last month. The next phase of the president's plan is likely to have even less Republican buy-in. The president wants to finance that part of his plan by raising taxes on wealthy individuals, that is, people making more than $400,000 a year.

MARTIN: Just last month, Congress agreed to borrow nearly $2 trillion for the pandemic relief package, right? I mean, isn't this a tough bet, this new plan asking for so much additional spending on top of that?

HORSLEY: No question it's a gamble. And the Democrats have reasons that are partly political and partly practical. Democrats have a limited window when they control the House, the Senate and the White House, so they want to act quickly while they have that opportunity. And then on a practical level, you know, the U.S. is really behind in infrastructure investment. We're kind of like a homeowner who has put off fixing the roof and the crack in the driveway and the leak in the kitchen, and now they all need repair at the same time. S&P Global says state and local government spending on infrastructure has fallen by about $1 1/2 trillion over the last decade compared to the trend before the last recession. And so, Rachel, that leaves a pretty big pothole that has to be filled before you can even start to talk, in Biden's phrase, about building back better.

MARTIN: NPR's Scott Horsley. Thanks, Scott.

HORSLEY: You're welcome.

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MARTIN: All right. There's a problem with Johnson & Johnson's supply chain that could hold up that company's vaccine.

KING: Yeah, a facility in Baltimore, which makes a key ingredient for the J&J vaccine, made a batch that didn't pass quality standards. The New York Times is reporting that human error is to blame, but the whole thing could jeopardize the vaccine's distribution schedule. Now the FDA is investigating.

MARTIN: NPR's Sydney Lupkin covers pharmaceuticals and joins us now. Sydney, thanks for being here. What happened?

SYDNEY LUPKIN, BYLINE: Well, it looks like there was some kind of cross contamination involving a key ingredient. This happened at Emergent BioSolutions. Now, that's a Maryland factory that is manufacturing the ingredient for Johnson & Johnson. The New York Times, which first reported on this setback, says 15 million Johnson & Johnson doses were affected. The company has not confirmed that. And it's important to note that these wouldn't be finished doses, just key ingredients ultimately bound for another facility to be put into vials and prepared for distribution.

MARTIN: Right. Still, it's all part of the same process, right? So how big of a setback might this be?

LUPKIN: There are a few ways to look at it. On the one hand, if it is 15 million doses of a single-dose vaccine, that's a lot, especially if you're waiting your turn to get the vaccine. Here is Saad Omer, the director of the Yale Institute for Global Health.

SAAD OMER: If it was as it seems - the first reports indicate that it was a human error and the way it was framed, it was a one-off error - then it will be a hiccup, but then, you know, you would expect things to resume.

LUPKIN: But if something more is going on, it could take more time to fix. And that means the Emergent facility won't be able to help Johnson & Johnson meet its goals as soon as expected.

MARTIN: But, I mean, even if it is just a hiccup, the hiccup itself could cause delays in vaccine delivery right now, couldn't it?

LUPKIN: So so far, Johnson & Johnson hasn't been using the Emergent facility to hit the 20 million doses it promised the U.S. by the end of March. That's because the facility still needed to go through the FDA's validation process before Johnson & Johnson could use what it was making. And that's when this cross contamination was discovered.

MARTIN: OK, so this facility wasn't even online yet. And so in a way, the system worked the way it's supposed to, I guess, by catching this before it could have done any more damage.

LUPKIN: Right. So we want the FDA in there inspecting. We want to find problems before drugs and vaccines get out to the American public. You don't want to get a vaccine that's been made wrong. It could not work or, worse, it could make you sick. So it's good to know that these vaccines and ingredients are being carefully examined. And when they're not up to snuff, they're not getting into people's arms.

MARTIN: But ultimately, Johnson & Johnson was counting on this Emergent facility, right?

LUPKIN: Yes. So we don't know when it was expected to become an official part of Johnson & Johnson's supply chain or how many doses it's responsible for. So the hope is that Emergent works out its problems with help from the federal government and the FDA watching closely because it still needs to pass its inspection. Johnson & Johnson was already behind. That's why the Biden administration brought in Merck to help it with manufacturing as well as some other support. Johnson & Johnson is expected to deliver 100 million doses by the end of May. And that's crucial to the Biden administration's promise to deliver enough vaccine for 300 million adults by that time. But this does show that things can and do happen in drug and vaccine manufacturing that can cause setbacks.

MARTIN: NPR pharmaceuticals correspondent Sydney Lupkin. Sydney, thank you.

LUPKIN: You bet.

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MARTIN: All right. The U.S. government is paying tens of millions of dollars a month for empty ICE detention beds.

KING: Here's what happened. ICE locked up a record number of undocumented immigrants during the Trump administration, but then arrests went down under orders from President Biden. And so these detention facilities have largely started to empty out. ICE released thousands of people to lower the risk of COVID.

MARTIN: NPR's Joel Rose covers immigration, and he's been looking into this. Joel, good morning.

JOEL ROSE, BYLINE: Hey, Rachel.

MARTIN: Why? Why is the government still paying for empty detention beds?

ROSE: Well, to understand why the government is paying for these beds, it helps to start with how ICE detention works. ICE doesn't actually own or operate most of these facilities. Instead, it contracts with private detention companies and county jails. And those contracts very often include what are called guaranteed minimums, which means essentially that ICE pays for a certain number of beds, whether they are occupied or not. These arrangements have come under fire, not just from progressive activists but from the nonpartisan Government Accountability Office, which weighed in earlier this year. The GAO found that these deals were not always in the best interests of the government.

MARTIN: How many beds are we talking about and what's the cost?

ROSE: Well, ICE guarantees it will pay for about 29,000 beds no matter what. But right now, there are only about 14,000 immigrants in ICE detention. Now, so we do the math and we know that the agency pays, on average, $75 per detainee per day. And that works out to more than a million dollars a day that ICE is spending on empty beds. And, of course, taxpayers are ultimately footing the bill.

MARTIN: I don't get it. I mean, this seems like a huge waste.

ROSE: Well, ICE and private detention companies that run most of these facilities say that this guaranteed revenue stream is needed to keep operations going at the staffing levels that ICE requires. ICE says that predicting how many immigrants will be detained is a complex challenge because the number can spike up and down - right? - as we have seen from a high of more than 55,000 under President Trump, down to just about 14,000 now. And ICE officials also say that these guaranteed minimum payments helped them negotiate a lower rate per detainee. But these deals have been controversial for years. I talked with Silky Shah, who is with the nonprofit Detention Watch Network, and she called on the Biden administration to make a change.

SILKY SHAH: Do they want to continue to detain people or do they want to actually move towards the more morally appropriate position of actually not detaining tons of people?

ROSE: For Shah and other activists, this is not just about money. It is also about the morality of putting immigrants behind bars for civil violations. And many ICE detainees have not been convicted of any crimes. Shah and other activists want to see this detention system dismantled or at least shrunk, and having so many guaranteed beds in the system makes that harder. President Biden said during the campaign that the U.S. should move away from for-profit detention for all detainees, including immigrants. As president, he has moved to phase out private detention centers in the federal prison system. But so far, he hasn't done anything to address this in the realm of immigration detention.

MARTIN: I mean, it sounds like basically the government, the federal government, the administration, just wants to keep its options open - right? - like, to just keep it on the table.

ROSE: Well, that's what ICE says. They don't know how many immigrants they're going to have to detain in the future, and they need to have these beds ready in case they need them.

MARTIN: NPR's Joel Rose, he covers immigration, we appreciate your reporting on this. Thanks, Joel.

ROSE: You're welcome. Transcript provided by NPR, Copyright NPR.

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