The White House is preparing to unveil a roughly $1.8 trillion spending and tax plan this coming week that includes many of President Biden’s campaign promises but also reflects the daunting challenges facing the administration as it tries to transform the U.S. economy, according to The Washington Post.
The “American Families Plan,” set to be released ahead of the president’s joint address to Congress on Wednesday, calls for devoting hundreds of billions of dollars to national child care, prekindergarten, paid family leave and tuition-free community college, among other domestic priorities.
It will be at least partially funded by about a half-dozen tax hikes on high-income Americans and investors, proposed changes that are already provoking fierce opposition in Congress and on Wall Street.
In a potential last-minute change, White House officials as of Friday were planning to include about $200 billion to extend an increase in health insurance subsidies through the Affordable Care Act exchanges, according to three people who spoke on the condition of anonymity to reveal internal discussions.
The overall price tag of the measure could also wind up being lower than $1.8 trillion.
The proposal will represent the second part of Biden’s “Build Back Better” agenda, following the $2.3 trillion jobs and manufacturing proposal the White House released several weeks ago. Combined, the approximately $4 trillion in new spending would amount to being among the most ambitious government overhauls of the economy in decades.
But the administration’s coming proposal also shows the limits constraining Biden’s ambitions, with the White House set to jettison campaign pledges and demands from key allies in the face of countervailing political pressures.
The legislative challenges in passing the bill could also be among the most difficult the White House has so far faced. Many congressional Republicans have said they will be fiercely opposed to new spending measures — and tax increases — as Biden tries to navigate his proposals through Congress.
Biden’s first major effort through Congress — the $1.9 trillion stimulus package — was accelerated by the pandemic and widespread calls for additional federal funds to fight it.
The infrastructure plan is just beginning to work its way through Congress, but congressional Republicans and corporate America have long acknowledged the need to make large investments to rebuild the nation’s roads, bridges and other infrastructure. Certain Republicans have indicated that they favor a scaled-back infrastructure plan, roughly one-quarter the size of Biden’s proposal.
By contrast, this new package, to be unveiled this coming week, moves the administration onto potentially more fraught legislative terrain — attempting to approve largely Democratic priorities with the narrowest of margins in the House and Senate. It is unclear whether the White House will seek to pass the jobs plan first through Congress or attempt to package both efforts together.
Even if they try to pass the measures through the Senate by a simple majority vote — something at least one Democrat has raised concerns about — they would have to keep virtually all members of their party satisfied with the legislation.
On both the taxing and spending provisions, the White House’s emerging package aligns largely with what Biden ran on as a presidential candidate in 2020, even as some important details have changed.
The key components of the plan consist of roughly $300 billion in education funding, the biggest pot of which includes funding to make two-year community colleges tuition-free; $225 billion in child-care funding; $225 billion for paid family and medical leave; $200 billion for prekindergarten instruction; and $200 billion to extend more enhanced Affordable Care Act subsidies, according to three people briefed on the plan who spoke on the condition of anonymity.
The plan would also extend a more robust child tax credit until 2025, the people said, a measure that could cost as much as $400 billion, as well as extend a more robust tax credit for workers. Aides repeatedly stressed that the details of the plan were subject to change and that final decisions had not yet been made.
The United States is the only wealthy nation with no federally provided paid maternity leave; is one of about five with no paid paternity leave; and is one of two without general paid sick leave, according to Vicki Shabo, a paid-leave expert at New America, a think tank.
The Organization for Economic Co-operation and Development has ranked the United States as one of the worst in the world in terms of spending on families, with parents particularly stressed by the high cost and lack of access of child care during the pandemic.
But the proposal in other ways reflects the limits of the White House’s ambitions, too. The “families plan” is not expected to include a push from Senate Finance Chair Ron Wyden (D-Ore.) and Sen. Michael F. Bennet (D-Colo.) to revamp the nation’s unemployment system, two people familiar with the matter said.
Wyden and Bennet have pushed the White House to overhaul unemployment systems nationwide after the pandemic showed their inability to accommodate a surge in jobless claims.
The measure is also set to only propose expanding an enhanced child benefit through 2025, although many Democratic lawmakers and Biden himself have called for making the provision permanent. That move would dramatically increase the overall cost of the package, and it is not clear whether the White House is becoming skittish about embracing daunting spending figures, given the rising national debt.
It is also unclear whether the funding levels proposed by the administration will be sufficient to ensure every American can afford child care or robust paid leave.
Sen. Elizabeth Warren (D-Mass.) during the presidential campaign introduced a universal child-care plan estimated to cost about $700 billion over 10 years, while Sen. Kirsten Gillibrand’s (D-N.Y.) paid-leave plan was estimated to cost more than $500 billion — both substantially more money than what the administration is eyeing.
If ultimately including the $200 billion in expanded subsidies for Obamacare materializes in the final package, the White House would be backing calls from House Speaker Nancy Pelosi (D-Calif.). Those expanded subsidies were initially approved in the $1.9 trillion stimulus approved by Congress in March. Senate Budget Chair Bernie Sanders (I-Vt.) and other lawmakers have called for the “families plan” to expand Medicare, an approach the administration is set to reject.
Biden faces pressure from Pelosi, Sanders over whether to double down on Obamacare or expand Medicare
The White House is also set to scrap a plan included in earlier drafts of their proposal to include as much as $500 billion in savings from the prescription drug industry. Speculation was rampant in the past week among congressional Democrats and advocates close to the White House as to why the administration would reject the measure to allow the government to force the pharmaceutical giants to lower their prices. Pelosi is lobbying the White House to include the measure.
The White House declined to comment.
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