Another trillion-dollar fix

WASHINGTON—On Wednesday, President Joe Biden in his first joint address to Congress pitched a massive spending package that could transform aspects of early childhood, young adulthood, and parenting into government-funded ventures.

The audience for the speech looked quite different from those at previous addresses by presidents to joint sessions of Congress. Instead of a packed room, only 200 people made the invite list. Despite many lawmakers having been vaccinated, they were socially distanced throughout the House chamber. National Guard troops took up posts throughout the building as a precautionary security measure.

Biden opened by talking about the COVID-19 pandemic, the passing of the $1.9 trillion American Rescue Plan to address the coronavirus, and the rate of vaccinations in the country. He also addressed gun laws, immigration, and police reform. But he spent the bulk of the speech on what will likely consume most of his administration’s focus and political capital for the rest of the year: infrastructure spending and financial support for working families.

“We are in competition with China and other countries to win the 21st century. We are at a great inflection point in history,” Biden said.

In the speech, Biden framed the need for massive government spending as an imperative to keeping up with America’s competitors, namely China. The solution to China’s attempts to surpass the West, Biden posited, is a government-led push to create jobs.

Biden’s answer is a $1.8 trillion proposal he’s calling the American Families Plan, which he said would go hand-in-hand with a $2.3 trillion infrastructure package he unveiled last month called the American Jobs Plan.

The American Families Plan would allocate $1 trillion to education and childcare. It also calls for $800 billion in tax credits. The plan would finance two free years of community college for students and subsidize universal preschool for 3 and 4 year olds, regardless of an individual’s or family’s income. Families who earn less than 1.5 times their state’s median income could receive child care subsidies. The proposal also extends tax credits for families earning up to $400,000, which Congress passed in the COVID-19 relief bill, through 2025. A federal paid leave program would slowly phase in and guarantee 12 weeks of covered parental, family, and personal leave by its 10th year.

In his rebuttal to the speech, Sen. Tim Scott, R-S.C., called the American Families Plan evidence that Democrats wanted “even more taxing, even more spending, to put Washington even more in the middle of your life, from the cradle to college.”

The president wants to pay for his proposal by increasing the income tax rate for wealthy Americans from 37 percent to 39.6 percent. This would return the top individual tax rate to where it was before the 2017 Trump-era tax overhaul. He also would increase taxes on capital gains for Americans who earn more than $1 million annually. The proposal calls for also increasing capital gains taxes on inherited assets, and it allocates more resources for the IRS to crack down on tax evasion.

The administration said those measures would pay for the proposal in full within 15 years. Senate Minority Leader Mitch McConnell, R-Ky., said the tax hikes would hit the economy “at exactly the time our nation needs a recovery” and would lead to lower wages for American workers.

Ryan Burge, an assistant professor of political science at Eastern Illinois University, said the speech came at a “high water mark” of the Biden presidency following the rollout of COVID-19 vaccines and the passage of his pandemic economic relief bill. But Burge said the coming months will likely prove more challenging.

“While getting millions of shots in arms was a logistical challenge, getting any of his other policy agenda passed is a political problem,” Burge said. “In an era of ever-increasing polarization, vaccinating 3 million a day is easier than getting 60 senators to agree on basically anything of consequence.”

It is unclear whether Democrats in Congress will try to muscle through the American Jobs Plan and the American Families Plan as a bundle or separately throughout the year. In total, the proposals would cost $4.1 trillion. Republicans are staunchly opposed to both. Democrats will also have to contend with the moderates in their own party, like Sen. Joe Manchin, D-W.Va., to get either plan across the finish line.

Despite the big price tag of the proposals, Adam Carrington, an associate professor of politics at Hillsdale College, noted that in his speech, Biden sought to appeal to the constituencies that support Manchin and other moderates.

“He really made a play for the working class [and] union votes that Democrats have been losing lately,” Carrington said. “He did so in emphasizing that his proposals would be tough on China, cut child poverty, focus on buying [and] employing American, and that the ‘American Jobs Plan’ would mostly employ those with little to no college education.” Still, Carrington said he was skeptical that Biden would see many of the policies he pushed for become law.