Six trillion dollars and counting . . . that’s the price tag that President Biden says Americans need to pay for his triple play of COVID-19 relief, infrastructure and social spending.
During his first speech to Congress, Biden promoted his latest, massive tax-and-spend proposal, dubbed the “American Families Plan,” which he called “a once-in-a-generation investment in our families — in our children.”
The $1.8 trillion package would include more than $500 billion for education, $225 billion each for child care and paid time off for workers, as well as $45 billion more for food stamps and school meals for needy kids.
Biden said his proposed social spending would be paid for with tax hikes on top incomes and on wealthy investors, and he repeated his promise not to raise taxes on Americans who earn less than $400,000 a year.
Biden noted, “20 million Americans lost their jobs in the pandemic” while “the roughly 650 billionaires in America saw their net worth increase by more than $1 trillion.”
“They are now worth more than $4 trillion. My fellow Americans, trickle-down economics has never worked,” he said.
“It’s time to grow the economy from the bottom up and middle out.”
But Biden made no mention of repealing the $10,000 cap on federal deductions for state and local taxes — known as SALT — that Gov. Cuomo has said is needed to offset the tax hikes in the state’s recently adopted $212 billion budget.
Not restoring the full deduction could derail the plan if House Democrats led by Rep. Tom Suozzi (D-LI) hold firm on their threat to vote “no” otherwise.
Both Democrats and Republicans in the US Capitol’s largely empty House Chamber — where Speaker Nancy Pelosi (D-Calif.) limited attendance to enforce social-distancing rules — stood to applaud when Biden called for new, American manufacturing and for companies to “Buy American.”
“There’s no reason the blades for wind turbines can’t be built in Pittsburgh instead of Beijing,” he said.
Biden repeatedly warned of the economic threat posed by China and deviated from the prepared remarks distributed to reporters to denounce Chinese President Xi Jinping as an “autocrat.”
“I spent a lot of time with President Xi, traveled over 17,000 miles with him. Spent in sum over 24 hours in private discussions with him. When he called to congratulate me, we had a two-hour discussion,” Biden said.
“He’s deadly earnest about becoming the most significant consequential nation in the world. He and others — autocrats — think that democracy can’t compete in the 21st Century.”
Meanwhile, Democrats in Congress are still writing Biden’s $2.3 trillion American Jobs Plan infrastructure bill, which includes dizzying amounts of funding such as $400 billion for home health-care support and nearly $200 billion in electric vehicle subsidies.
If they can manage to avoid defections, Democrats are likely to ram through both pending packages without Republican support under special budget reconciliation rules that circumvent the usual 60-vote requirement to pass the Senate.
Congress last month passed Biden’s $1.9 trillion American Rescue Plan — issuing $1,400 stimulus checks and $350 billion in state and local aid — without any Republican support.
And even some Democrats are expressing unease with the spending spree.
Sen. Joe Manchin of West Virginia said Wednesday that he’s “very uncomfortable” with how much money the bills would heap onto the $28.2 trillion national debt.
His vote alone could doom or substantially alter the packages in the evenly divided Senate.
EDUCATION, CHILD CARE & HEALTH CARE
The three pieces of legislation would move the US closer to European-style state support for education, child care and health care through higher taxes on businesses and upper-income people.
Senate Minority Leader Mitch McConnell slammed the latest proposals on Wednesday as “daydreams of a sweeping socialist legacy that will never happen in the United States.”
The latest “families” package includes $511 billion for education, including universal preschool for 3- and 4-year-olds and free community college, and $225 billion for child care, including a subsidy that would cap expenses for most workers at 7 percent of income.
That plan also calls for $225 billion to subsidize 12 weeks of paid parental and sick leave and $45 billion more for food stamps and school food programs.
Manchin said he’s particularly skeptical of federal funding for preschool.
“We got pre-K in West Virginia and we didn’t have the federal government step up to the plate on that. We did it,” he said.
The new plan also includes about $800 billion in tax credits, with about $200 billion going toward ObamaCare health insurance subsidies and much of the rest to make permanent an increase of the annual child tax credit from $2,000 to $3,000, or $3,600 for kids under 6. The temporary increase was made through last month’s COVID-19 stimulus bill.
The single largest item in the pending infrastructure package is a proposal to put $400 billion “toward expanding access to quality, affordable home- or community-based care for aging relatives and people with disabilities.”
The infrastructure plan includes $100 billion in new school construction, $25 billion to “upgrade child care facilities and build new supply in high need areas” and $12 billion for “investing in community college facilities and technology.”
The already-passed COVID-19 relief bill, meanwhile, included more than $120 billion to help K-12 schools — a sum so vast that the Congressional Budget Office estimated that more than 90 percent won’t be spent in 2021 because funds approved for schools in 2020 haven’t been spent.
Biden’s initial relief plan included $1,400 stimulus checks for adults making up to $75,000 and extended a $300 weekly unemployment supplement through Sept. 6, while giving $350 billion to state and local governments.
It put just $75 billion toward COVID-19 vaccination, testing and other pandemic medical supplies.
‘GREEN’ TECHNOLOGY & TRANSPORTATION
The infrastructure package proposed significant funds to conserve energy and reduce fossil-fuel use, which Biden also has discouraged via executive actions.
About $174 billion would go toward subsidies for electric vehicles, including a plan for federal grants to state and local governments and corporations to build 500,000 charging ports for electric vehicles by 2030.
The plan also calls for significant amounts of money for more traditional infrastructure projects, including $115 billion for roads and bridges, $111 billion for modernizing water systems, $100 billion for expanding broadband Internet, $85 billion for public transit systems, $80 billion for Amtrak repairs and $25 billion for airport construction.
Another $27 billion would go toward weathering buildings to make them more energy-efficient and $25 billion would be set aside for “transformative” endeavors.
The infrastructure plan proposes $20 billion to promote bike and pedestrian transportation, $16 billion to cap old oil and gas wells, $10 billion for a new Civilian Climate Corps and $5 billion to redevelop industrial sites.
Unlike the initial stimulus bill, Biden’s two pending pieces of legislation would be paid for — at least in theory — by tax hikes and a crackdown on wealthy tax evaders.
The White House proposed paying for infrastructure through a set of corporate tax hikes projected to raise more than $2 trillion, though such calculations generally are a form of art.
Biden wants to bump the top corporate tax rate from 21 percent to 28 percent after Republicans reduced it from 35 percent in 2017.
Biden also wants a “global minimum” tax of 21 percent on overseas income of US-based companies and new rules to penalize offshoring jobs.
The “families” proposal would be paid for by significant tax hikes on the highest income bracket — from 37 percent to 39.6 percent for individual filers earning more than $523,000 or joint filers over $628,000 — and on investments like stocks and real estate.
The top capital gains tax rate would increase to 39.6 percent for people with annual incomes over $1 million, which would be a dramatic increase from the current top rate of 20 percent. For New Yorkers, the combined state and federal capital gains rate could be as high as 52.22 percent.
The plan also proposed more IRS audits on the wealthy to crack down on tax avoidance — though a projected windfall of $700 billion over 10 years is likely to be greeted skeptically by Republicans.
Additional reporting by Bruce Golding