With an economy that grew in the first quarter of the year around 6.8%, according to data collated by the New York Federal Reserve, the Democrat now faces the moment of truth to cement his ambitious agenda.
The White House plans to unveil this week the so-called "American Family Plan" as the culmination before the president's speech in Congress on Wednesday. The second part of Biden's economic recovery and infrastructure plan is expected to cost at least another $ 1 trillion and include $ 500 billion in tax credits. In fact, the Washington Post raised the bill to nearly $ 1.8 trillion.
According to the newspaper, the White House made last-minute changes late last week to include an additional $ 200 billion to expand the health insurance subsidies included in the Affordable Care Act, better known as Obamacare. He also planned to revive a measure to reduce consumer and government spending on prescription drugs, something that would collide head-on with the pharmaceutical industry.
In addition, Biden wants to dedicate hundreds of billions of dollars to child care, among other priorities. The bill would extend the child tax credit (which the last fiscal stimulus approved in March raised to $ 3,600 per child per year) until 2025.
Biden will offset the cost with a proposal to raise taxes on the highest incomes and is considering options like restoring the top income tax rate or treating capital gains as ordinary income. In this sense, last week, Bloomberg already advanced the intention of almost doubling from 20% to 39.6% the taxation of capital gains for those who enter more than a million dollars a year.
This would be the most ambitious public outlay in recent decades on this side of the Atlantic.
These proposals will represent the second part of Biden's "Rebuild Better" program. It should be remembered that at the beginning of this month the American Employment Plan was presented, mainly focused on investments in infrastructure and the environment for an approximate value of 2.3 trillion dollars. The proposal would be funded in part through a corporate tax increase.
Taken together, the roughly $ 4 trillion of additional spending the Democrat is seeking is the most ambitious public outlay on this side of the Atlantic in decades.
Obstacles
However, Biden faces challenges in approving both games. The appetite of more moderate Democrats and the Republican opposition to increase spending has waned since the president took office. Although the president has said he wants to reach an infrastructure agreement with the Republicans, they already showed last week that they are not willing to spend more than $ 800 billion, about a third of the price of Biden's proposal.
In addition, both Republicans and moderate Democrats, such as Senator Joe Manchin, oppose the White House proposal to raise corporation tax from 21% to 28% to fund the infrastructure plan. In all likelihood these will also be against the tax increases that will be part of the second phase to pay for the social programs championed by the most progressive wing of the Democrats.
