Biden plans to split spending plan in two

During his first news conference on Wednesday, President Biden said investments in infrastructure would help create jobs and address climate change. (Reuters)

The second proposal, which the administration plans to release in April, would focus more on child care and healthcare programs, among other priorities for the administration, White House press secretary Jen Psaki said on “Fox News Sunday.”

At some point the administration plans to propose tax increases on higher-income households and businesses to help pay for the programs, though it has yet to lay out its tax strategy or how it will fit together with the next two proposals. Ms. Psaki also left open the possibility that both elements of the president’s spending plans could be pursued in one legislative package.

Mr. Biden, asked Sunday if both his proposals would move through Congress as one bill or more, told reporters that he had decided on a legislative strategy for his next economic package, but he declined to comment further.

Democrats say the spending programs will help to make the economy more productive, boosting growth and household incomes. Republicans are wary of wasteful spending and reject efforts to raise taxes. Some economists warn the government risks piling on too much debt, overstimulating the economy and causing inflation. However, interest rates and inflation are low, which has left administration officials believing they have room to maneuver to make long-term investments in growth.

Ms. Psaki said the president believes he can get bipartisan support for his infrastructure proposal, as some spending, such as restoring roads and bridges, is popular in both parties.

Some Democrats believe it would be easier to get Republican support for infrastructure investments in a separate bill and then the administration can pursue its other priorities, including tax measures, through reconciliation, the process which allows the Senate to pass legislation tied to the budget with a simple majority, rather than the 60 votes most bills require.

Senate Democrats passed a $1.9 trillion coronavirus relief package earlier this month along party lines, 50-49, through reconciliation.

“I will say that I don’t think Republicans in this country think we should be 13th in the world as it relates to infrastructure,” Ms. Psaki said. “Roads, railways, rebuilding them—that’s not a partisan issue.” The World Economic Forum has ranked the U.S. 13th in the world in infrastructure quality and second in overall economic competitiveness behind Singapore.

There are signs of some potential GOP support in the House. “I’m definitely going to get on board with any proposal that is going to provide rural broadband to my district,” said Rep.-elect Julia Letlow (R., La.) on CBS’s “Face the Nation.” Ms. Letlow said she would have to take a closer look at the infrastructure bill before deciding whether to support it.

However, Senate Minority Leader Mitch McConnell (R., Ky.) last week signaled opposition, saying the Biden administration was likely to stuff an infrastructure bill with other “wish list” priorities for Democrats. “They’re now cooking up yet another package they’re going to call infrastructure, but it’s going to be a Trojan horse that includes massive tax increases on Americans,” Mr. McConnell told Fox News last week. “They’re going hard left.”

The multipart plan could cost as much as $3 trillion over a decade, people involved in the discussions said last week. Republicans will likely balk at the price tag of the new package after opposing the coronavirus relief package because they said it was too costly.

“He’s going to introduce some ways to pay for that and he’s eager to hear ideas from both parties as well,” Ms. Psaki said on Sunday.

Senior administration officials have discussed raising taxes on companies, among other options, to offset the cost of the spending packages. If the proposals add up to $3 trillion over a decade, as has been projected, that would represent 1% of GDP and a 5% increase in federal spending beyond current projections.

Democrats also are exploring raising the top marginal income-tax rate for high-income individuals, increasing capital-gains taxes and tightening international tax rules on companies, according to lawmakers and aides.

A bipartisan agreement on infrastructure has been elusive in Congress in recent years, with disagreements on the cost and how it should be paid for.

During his first news conference last Wednesday, Mr. Biden said investments in infrastructure would help create jobs and address climate change.

“It’s the place where we will be able to significantly increase American productivity, at the same time providing really good jobs for people,” he said. “But we can’t build back to what they used to be. We have to build—the environment has—global warming has already done significant damage.”

“The roads that used to be above the water level—didn’t have to worry about where the drainage ditch was—now you got to rebuild them 3 feet higher. Because it’s not going to go back to what it was before; it will only get worse, unless we stop it,” Mr. Biden said.

Administration officials so far have been quiet about providing fuller details on the specific programs they plan.

The push for another economic recovery package is hitting as Washington’s policy agenda gets increasingly crowded, which could affect the timing and prospects of the effort. Calls for a voting-rights bill, gun-control measures and comprehensive immigration reform are intensifying.

Georgia Gov. Brian Kemp, a Republican, signed into law last week changes to the state’s election requirements, drawing a rebuke from Democrats for provisions that altered how people vote absentee and where people can drop off their ballots.

Sen. Raphael Warnock (D., Ga.) has said the Senate should act quickly on a bill to safeguard voting rights but that Mr. Biden’s infrastructure plan should be a priority as well.

“We have got to work on the infrastructure of our country, our roads and our bridges, and we have got to work on the infrastructure of our democracy,” he said on CNN. “We got to do both of those things.”

Mr. Biden recently pitched his ideas to Democratic senators, specifically on infrastructure and education while saying he wants to make the tax system fairer, according to a person familiar with the virtual meeting.

Plans for the second proposal, which will address the “caregiving economy,” as the president calls it, are still in flux. Administration officials said Mr. Biden’s $775 billion campaign proposal on caregiving would likely serve as a blueprint for that section of the plan.

They view investments in child care and elder care as necessary to boost women’s participation in the workforce.

Women’s participation in the labor force slipped to 57%, the lowest it has been since 1988, according to an analysis of government data by the National Women’s Law Center. More than 2.3 million women have dropped out of the labor force during the pandemic, compared with 1.8 million men, according to the report.

This story has been published from a wire agency feed without modifications to the text.

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