Topline
Here’s everything we know about President Biden’s “Build Back Better” plan—a sweeping set of infrastructure and jobs proposals designed to follow his flagship $1.9 trillion American Rescue Plan—to be unveiled Wednesday and reportedly financed with even more new tax revenue than previously thought.
U.S. President Joe Biden talks to reporters during the first news conference of his presidency in ... [+]
Key Facts
The package will be split into two separate proposals, the White House said this weekend, and financed in large part with new taxes on big businesses and the ultra-wealthy.
The first part of the plan will be the focus of Biden’s speech this week: money for physical infrastructure like roads, bridges, rail lines, water and sewer systems, improvements to the power grid, money to expand broadband access, according to the New York Times, as well as money for American manufacturing, clean energy and energy efficiency projects.
The second part of the plan will focus on what many are calling the “care economy”—jobs, healthcare, and childcare—and will likely include money for universal pre-kindergarten, free community college, paid leave and a number of provisions aimed at supporting female workers, who have dropped out of the labor force in record numbers over the last year.
White House press secretary Jen Psaki said Sunday more details about the second half of the plan will come next month.
The Washington Post reported Monday that the package will include up to $4 trillion in new spending to be partially financed by more than $3 trillion in revenue from new tax hikes—significantly more tax revenue than the $1 trillion in tax hikes the White House originally planned.
According to the Post, the tax hikes were bumped up to account for concerns that the gap between spending and revenue in the original proposal was too high and could destabilize the economy.
Big Number
2.3 million. That’s how many jobs S&P Global expects Biden’s plan to create by 2024.
Crucial Quote
“Stimulus helps build the bridge for the recovery to reach the other side, but an investment in infrastructure is the fuel to jump start the economic engine,” said Beth Ann Bovino, chief U.S. economist at S&P Global.
Key Background
Biden campaigned on a platform of aggressive tax hikes for big business and the ultra-wealthy, including raising the highest individual income tax rate from 37% to 39.6% and taxing capital gains as ordinary income for those with income above $1 million. He also wants to raise the corporate tax rate to 28% from 21% and use taxes to encourage domestic manufacturing by making it more expensive for American companies to produce goods and services overseas.
Chief Critic
Senate Minority Leader Mitch McConnell (R-Ky.) has been adamant that his party will not support new taxes: “I don’t think there’s going to be any enthusiasm on our side for a tax increase,” he has said, referring to Biden’s infrastructure agenda as a “Trojan horse” that will conceal a laundry list of tax hikes favored by Democrats.
Tangent
Senate Democrats have pushed the administration to make the permanent the major expansion of the child tax credit under the American Rescue Plan. According to the Post, the White House agreed to extend the expanded credit for several years in the forthcoming legislation rather than on a permanent basis in order to keep costs down.
What We Don’t Know
Whether Democrats will be able to advance the more partisan elements of the plan without support from the GOP (which is sure to oppose portions of it, especially the tax hikes) the way they did the American Rescue Plan. That earlier bill was folded into a special budget reconciliation process that allowed Democrats to pass it using only a simple majority in the Senate (51 votes) rather than the usual 60 votes needed to overcome a filibuster. Senate Majority Leader Chuck Schumer (D-N.Y.) is reportedly exploring a path that would let Democrats use the reconciliation process again this fiscal year (rather than waiting months for the 2022 fiscal year) to pass some of Biden’s ambitious agenda. That would let Schumer avoid eliminating the filibuster—a controversial proposal not all Democrats support—to realize Biden’s agenda.
Further Reading
White House dramatically increased tax proposal as it sought to address tensions over next big spending plan (Washington Post)
Biden To Split New $3 Trillion Recovery Plan Into Two Proposals, With Infrastructure First On Deck (Forbes)
Schumer Plots Bid To Pass Biden Agenda Without GOP Support Or Nuking Filibuster (Forbes)
41 Democratic Senators Ask Biden To Support Permanent Child Tax Credit And Earned Income Tax Credit (Forbes)
