Biden Unveils New Social Spending Proposal—Here’s What Remains After $2 Trillion In Cuts
Topline
Following months of negotiations with spending-hesitant moderates, President Joe Biden on Thursday debuted a new social spending proposal aimed at “restoring the middle class” by tackling many of Democrats’ policy priorities—including free universal preschool for children and an expanded child tax credit—while nixing several others to lower the overall price tag, thought it’s still unclear whether the new package can muster up the support necessary to pass in the evenly split Senate.
President Joe Biden promotes his “Build Back Better” agenda in New Jersey on, Monday, Oct. 25.
Key Facts
The package would authorize $1.75 trillion in spending over 10 years, the White House announced Thursday, falling incredibly short of the $3.5 trillion proposal Biden unveiled in August.
The framework includes $400 billion for free childcare for more than 6 million children and tuition-free pre-school for 3- and 4-year-olds, along with $555 billion for clean energy initiatives, including $320 billion in tax credits over 10 years to help Americans pay for environmentally friendly home improvements and corporations transition to clean-energy manufacturing.
Some items in the framework call for lower spending than originally proposed, with about $200 billion to expand the child tax credit for an additional year—down significantly from the four-year extension proposed in August.
Other items have been removed completely, most notably two years of tuition-free community college for all Americans.
To help pay for the package, Biden has tapped a 15% corporate minimum tax on large corporations, backing a proposal introduced by senators earlier this week; a discussed tax on stock buybacks and a surcharge on the top 0.02% of high earners also made the cut, though a contentious billionaire income tax was left out.
Key Background
Democrats are racing to hammer out the details of a social spending package before Biden departs for a trip to Europe on Thursday. Though the Senate narrowly passed a budget blueprint for the package in August, party leaders have struggled to temper concerns over heightened spending among moderates. Sen. Joe Manchin (D-W.V.) has long insisted he preferred a $1.5 trillion package, but on Tuesday suggested he may be willing to go higher. In a bid to raise pressure for a deal, House progressives threatened to block a Senate-passed infrastructure bill, which itself faces a tight end-of-month deadline for passage, without further progress on the second package.
What To Watch For
Though the White House has touted its Thursday framework as a deal among Democrats, it has yet to garner explicit approval from Democrats who have thus far withheld support for a big spending package, namely Manchin and Sen. Kyrsten Sinema (D-Ariz.), who’s also refused to support a $3.5 trillion price tag.
Further Reading
Democrats’ Spending Plan Could Mean $20 Billion Tax Cut For The Rich—Even With A New Billionaire Tax (Forbes)
Here’s Why Democrats’ $3.5 Trillion Budget Plan Could Impact Every Single American (Forbes)
This is a developing story. Please check back for updates.
