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$3 trillion is the minimum sum the Biden team will spend within the initiative. Since the package includes several tax incentives, its cost could approach $4 trillion.
One month after passing a $1.9 trillion COVID-19 relief bill, Joe Biden administration is considering another holistic package to stimulate the economy. According to those familiar with the matter, the proposal that will be presented to Biden this week will cost as much as $3 trillion. It will focus on jobs, infrastructure, and climate change, as well as human capital and healthcare.
According to The New York Times that was the first to report about the initiative, the package will consist of two separate parts. The first one will address infrastructure improvements like the construction of roads, bridges, rail lines, etc., include spending on clean energy deployment, as well as focus on “high-growth industries of the future” like the 5G network. In addition, it will include money for rural broadband, advanced training for millions of workers, and energy-efficient housing units.
The second part of the Biden team’s $3 trillion initiative will spend heavily on education and healthcare. In particular, it will include programs for expanding women’s participation in the labor force. Besides, it will provide free community college tuition, universal pre-K education, a national paid leave program. It will also reduce child care costs.
Senior Fellow at the liberal Center for American Progress think tank Seth Hanlon commented:
“President Biden’s plan represents a stunning shift in priorities, addressing many of the nation’s most pressing challenges. As reported, the plan is very wide-ranging, reflecting the fact that we’ve underinvested in so many areas.”
Notably, $3 trillion is the minimum sum the Biden team will spend within the initiative. Since the package includes several tax incentives, its cost could approach $4 trillion. According to Biden’s advisers, they will not raise the tax bills of any individual earning less than $400,000. However, they may tax all individual income above this amount at 39.6%, in order to raise more revenue.
As long as the package will feature raising the revenues and increasing corporate taxes and rates for the affluent, Republicans are unlikely to support the proposal. Notably, it will be the biggest tax increase since the 1990s, which Republicans will not favor. In addition, they are already skeptical about infrastructure improvements.
Senate Republican leader Mitch McConnell stated:
“We’re hearing the next few months might bring a so-called infrastructure proposal that may actually be a Trojan horse for massive tax hikes and other job-killing left-wing policies. Democrats have an obsessive focus on climate policies to the exclusion of everything else.”
Previously, Democrats faced resistance from Republicans while passing a $1.9 trillion pandemic relief bill. However, at that time, Biden used a reconciliation process. The massive bill was passed through Congress without any backing from the Republicans.