Biden’s Trillion Dollar Plan

By Johanna Fernandes, Staff Writer

On Thursday, President Joe Biden shared a new $1.85 trillion social-spending and climate legislation framework.

This comes in addition to the $550 billion in new spending proposed in the infrastructure plan that Liberal lawmakers have held up in Congress in efforts to strategically advance both plans. While the caucus formally endorsed the legislation, some moderate members ultimately held up the voting process. Democrats aim to pass the social-spending plan through reconciliation, bypassing support from the GOP but relying on backing from all 50 senators in the Democratic caucus.

President Biden himself urged the party to unite and pass the framework so they could move forward with the separate infrastructure bill negotiations in the House. 

“We spent hours and hours and hours over months and months working on this,” Biden said, “No one got everything they wanted, including me. But that’s what compromise is. That’s consensus. And that’s what I ran on.” 

While the party did not bite at the pitch Thursday morning, he continues to try to appease moderates concerned over the price tag of the bills and progressives who want to pass the social spending bill prior to focusing on the infrastructure bill.

As the President highlighted, the new social-spending bill is all about compromise. As the plan’s ambitions were cut from $3.5 trillion, four key initial promises were cut. First, the 12 weeks of paid family leave, a key hope of new parents across the country, was cut from the plan. Free community college has also been shot from the plan to appeal to moderate senators. The plan will instead invest in workforce development programs and minority-led educational institutions. In terms of healthcare, the provisions left out efforts to enable Medicare, the federal health insurance program, to negotiate with pharmaceutical companies to lower the cost of prescription drugs. The last notable proposal quickly cut from the plan includes the new tax on billionaires’ unrealized capital gains.

While some aspects of the original bill had to be cut, several essential aspects of the plan are still included. First, a $555 billion investment in climate-related provisions is set to make historic progress developing renewable energy infrastructure – largely through tax credits that incentivise clean manufacturing, supply chain and technology investments. The plan did not outline any items related to fossil-fuels, likely to satisfy moderate democratic senators. Next, a $400 billion federally funded preschool for all three and four-year-olds is included, lowering the cost of childcare across the country. While there are several other provisions, a $150 billion affordable housing investment is a central component intended to ease housing costs for both renters and home buyers.

The plan aims to fund most of the bill by raising taxes on corporations and high-income households. Tax provisions will set a 15% minimum tax on corporations with more than a billion in profits, set a 1% tax on stock buybacks, and crack down on U.S. multinational outsourcing with a 50% minimum tax on foreign profits. In terms of individual income taxes, measures such as increased IRS focus and a 5% surtax on adjusted gross income over $10 million are included to crack down on tax avoidance by America’s richest.

The next few weeks will be integral to the delivery of the President’s platform as Dems seek an agreement in caucus for the outlined social-spending bill. Only then will the party have grounds to move forward with the Republican Party (GOP) to pass the infrastructure bill.

Photo by Harold Mendoza on Unsplash

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