- Joe Biden’s economic advisors are drafting a proposal to recommend up to $US3 ($4) trillion more spending, a person familiar confirmed to Insider.
- The New York Times first reported the White House could split its colossal infrastructure plan in two.
- The first part would focus on infrastructure and climate. The second may set up universal pre-K.
- See more stories on Insider’s business page.
President Joe Biden’s economic advisors are expected to present a proposal that includes up to $US3 ($4) trillion in new spending aimed at boosting the economy and fighting climate change through separate legislative pieces instead of a single colossal bill.
A person familiar with the discussions confirmed them to Insider. They were granted anonymity to reveal internal deliberations.
The New York Times first reported the emerging shape of the plan. It would be aimed at narrowing economic inequality, reduce carbon emissions, and improve American manufacturing, beginning with an infrastructure bill.
The Times cited documents outlining that the proposed package would spend heavily on infrastructure improvements, with nearly $US1 ($1) trillion in spending alone for roads, bridges, electric vehicles, and more.
The second part of the infrastructure push would be people-focused and spend heavily on education and programs to increase the participation of women in the labor force, including free community college, universal pre-K education, and a national paid leave program. Those elements are targeted at encouraging workers to re-enter the labor force and accelerate the economic recovery.
Many of the plan’s details appear to remain highly in flux. “President Biden and his team are considering a range of potential options for how to invest in working families and reform our tax code so it rewards work, not wealth,” White House press secretary Jen Psaki said in a statement. “Those conversations are ongoing, so any speculation about future economic proposals is premature and not a reflection of the White House’s thinking.”
Administration officials say while funding methods are not yet determined, it might be partially paid for with tax increases on the wealthiest Americans. Biden has already indicated that he would include a federal tax hike on high earners in his next big economic package, which would be the biggest tax increase in nearly three decades.
Insider’s Juliana Kaplan reported Monday that Biden is likely to look at tweaks to the current tax code, instead of a new tax targeting wealth.
But whether Republicans will support one big bill, or a series of legislative pieces, depends largely on funding, and Republican lawmakers have already indicated they will not support a tax hike on the rich.
“I don’t think there’s going to be any enthusiasm on our side for a tax increase,” Senate Minority Leader Mitch McConnell told reporters last week. The Republican opposition to tax increases could prompt Democrats to bypass the GOP using reconciliation, the same tactic used to enact the $US1 ($1).9 trillion stimulus law, but passing it more piecemeal could win bipartisan approval for certain aspects of the spending.
Groups of lawmakers from both parties have already met with Biden to discuss an upcoming infrastructure bill.
Democrats, like Rep. Peter DeFazio, the chair of the House Transportation and Infrastructure Committee, suggested using reconciliation in a CNBC interview to pass the next bill, but Rep. Sam Graves, ranking member of the House infrastructure panel, said in a statement that it “cannot be a ‘my way or the highway’ approach like last Congress.”
Moderate Democratic Sen. Joe Manchin said in an “Axios on HBO” interview that an infrastructure bill could be as large as $US4 ($5) trillion if it’s funded by tax hikes but that he would not support reconciliation.
“I’m not going to do it through reconciliation,” Manchin said. “I am not going to get on a bill that cuts them [Republicans] out completely before we start trying.”