President Biden will give a speech to a joint session of Congress on Wednesday evening in which he will propose opening the government’s checkbook again to support a number of initiatives that may resonate with consumers.
After a $1.8 trillion COVID-19 relief bill that sent nearly every American $1,400, the president has proposed spending another $2 trillion on loosely defined infrastructure. He’s now poised to propose another $1.8 trillion in spending to support families. The White House says the spending would boost the economy and workers.
The new spending proposal increases government spending in support of child care, education, and paid leave from jobs. It would also extend some middle-class tax cuts that are set to expire.
A preview of the president’s plan shows a lot of the new spending would go toward education. It would establish universal preschool for children who are three and four years old and pay for two years of tuition at community colleges. There would be no income requirements for eligibility for this benefit, but the program would require states to provide some of the funding.
Financial assistance for child care
Under Biden’s proposal, Americans at low- and middle-income levels would receive financial assistance to pay for children’s care. When a family member is sick, it would pay a portion of a caregiver’s salary while that person took off work to care for a child or other family member.
Someone taking leave under the program could take off up to 12 weeks by the 10th year of the program while receiving up to $4,000 a month in compensation.
Under the plan, the U.S. government would spend $1 trillion over 10 years while reducing taxes by another $800 billion. To pay for it, the government would raise taxes on Americans who earn the most money. The top marginal income tax rate would rise from 37% to nearly 40%.
Households earning more than $1 million a year would see a sharp rise in the capital gains tax, paid on profits from asset sales. The current 20% tax rate would nearly double.
Broad popular support
According to polls, the president’s general plan enjoys broad popular support. Reuters/Ipsos polling shows that 55% of Americans approved of the proposal when told of the specifics. Americans also told pollsters that they like the idea of wealthy Americans paying higher taxes.
But getting the plan through Congress may be a tall order. Even though the president’s party controls both chambers, the margin is extremely narrow, especially in the Senate.
With Republicans in the Senate united in their opposition to increased levels of spending, on top of what has already been spent, it would take only a single defection of a Democratic senator to defeat the plan.