Joe Biden’s investment plans advance in Congress
The House of Representatives approved, Tuesday, a resolution aiming to bypass a possible blockage of Republicans in the Senate, in order to be able to adopt in the fall the great plan of social reforms wanted by Joe Biden. The boss of the Democrats Nancy Pelosi has also pledged to submit to a vote by September 27 the infrastructure plan.
President Biden will propose a $6 trillion budget on Friday that would take the United States to its highest sustained levels of federal spending since World War II as he looks to fund a sweeping economic agenda that includes large new investments in education, transportation and fighting climate change.
Documents obtained by The New York Times show that the budget request, the first of Mr. Biden’s presidency, calls for total spending to rise to $8.2 trillion by 2031, with deficits running above $1.3 trillion throughout the next decade. The growth is driven by Mr. Biden’s two-part agenda to upgrade the nation’s infrastructure and substantially expand the social safety net, contained in his American Jobs Plan and American Families Plan, along with other planned increases in discretionary spending.
The proposal for the 2022 fiscal year and ensuing decade shows the sweep of Mr. Biden’s ambitions to wield government power to help more Americans attain the comforts of a middle-class life and to lift U.S. industry to better compete globally.
The levels of taxation and spending in Mr. Biden’s plans would expand the federal fiscal footprint to levels rarely seen in the postwar era to fund investments that his administration says are crucial to keeping America competitive. That includes money for roads, water pipes, broadband internet, electric vehicle charging stations and advanced manufacturing research. But it also envisions funding for affordable child care, universal prekindergarten and a national paid leave program — initiatives that Republicans have balked at bankrolling. Military spending would also grow, though it would decline as a share of the economy.
“Now is the time to build the foundation that we’ve laid, to make bold investments in our families, in our communities, in our nation,” Mr. Biden told a crowd in Cleveland on Thursday. “We know from history that these kinds of investments raise both the floor and the ceiling of an economy for everybody.”
Mr. Biden plans to finance his agenda by raising taxes on corporations and high earners, and the documents show budget deficits shrinking in the 2030s. Administration officials have said the jobs and families plans would be fully offset by tax increases over the course of 15 years, which the budget request also anticipates.
The documents forecast that Mr. Biden and Congress will allow tax cuts for low- and middle-income Americans, signed into law by President Donald J. Trump in 2017, to expire as scheduled in 2025. Mr. Biden has said he will not raise taxes on people earning less than $400,000 a year. It is possible that he could propose to extend the Trump tax cuts for those earners in a future budget, potentially coupled with additional tax increases on high earners or businesses.
While his plan projects additional tax revenue down the line, the United States would run significant deficits as it borrows money to finance his plans. Under Mr. Biden’s proposal, the federal budget deficit would hit $1.8 trillion in 2022, even as the economy rebounds from the pandemic recession to grow at what the administration predicts would be its fastest annual pace since the early 1980s. The deficit would recede slightly in the following years before growing again to nearly $1.6 trillion by 2031.