Finance

Democratic scramble complicates Biden’s human infrastructure plan

Greg Nash

Democrats are scrambling to get their priorities included in President Biden’s next major proposal, potentially raising the cost of a measure already expected to run to more than $1 trillion.

Biden is expected to outline a package called the American Families Plan during a speech to a joint session of Congress on Wednesday. The package will focus on human infrastructure, such as child care and education.

The president sees the package as a way to help families get on a stronger footing than they were prior to the pandemic. But a number of Democrats want to go well beyond what Biden is expected to propose, including in areas such as tax credits for families, unemployment insurance and health care.

The scrambling portends a complicated fight likely to make it more difficult to get a package through the House and Senate and to Biden’s desk for his signature, particularly if the White House is seeking to keep its overall cost down.

It could also provide new openings for Republicans already zeroing in on Biden’s rhetoric on spending and taxes.  

Rep. Don Beyer (D-Va.), the chair of Congress’s Joint Economic Committee, said in an interview with The Hill on Monday that Democrats across the political spectrum see a “unique window” to go big with their goals given the party’s control of the White House and both chambers of Congress — at least through 2022.

“You need to, forgive the cliché, strike while the iron is hot,” Beyer said.

Biden’s family-focused plan is designed to complement the $2.25 trillion infrastructure package released several weeks ago focused on transportation and addressing climate change. The families plan is expected to be paid for by tax increases on the wealthy.

The administration has yet to publicly discuss many specifics, though White House economic adviser Brian Deese on Monday defended the coming capital gains tax hike proposal as only hitting taxpayers with incomes of more than $1 million.

Democrats are already pressuring Biden to add more goodies to his proposal.

One issue that Democratic lawmakers are pressing is making permanent the child tax credit expansion that was enacted by Biden’s relief package in March. The Washington Post and The New York Times have reported that Biden is planning on proposing to extend the expansion through 2025 — the same year that the tax provisions in former President Trump’s 2017 tax law expire.

Sen. Sherrod Brown (D-Ohio), Sen. Michael Bennet (D-Colo.), Rep. Suzan DelBene (D-Wash.), Rep. Rosa DeLauro (D-Conn.) and other lawmakers in the House and Senate who have been leading the efforts on child tax credit expansion say that permanence remains their priority.

“If we’re really going to have the impact to help children and families, we need to make sure that there’s that long-term commitment,” DelBene, a member of the House Ways and Means Committee, told The Hill on Monday.

Extending the child tax credit expansion is popular with centrists and liberals, but it would greatly expand the cost of the overall package. 

Deese on Monday said Biden is proud that he enacted an expansion of the credit, but didn’t provide details about how Biden’s plan will propose extending the expansion.

Senate Finance Committee Chairman Ron Wyden (D-Ore.) is pressing for reforms of the unemployment insurance (UI) system. He, Beyer and other Democrats in a letter to Biden on Friday called for the package to include federal standards for state benefit levels, expanded eligibility and “triggers” that tie benefits to economic conditions.

Wyden, who will play a key role in drafting legislation based on Biden’s plan, said in a statement that improving the UI system is one of his top areas of focus.

“We can’t fail again to fix it in the wake of the second major economic crisis in 10 years,” he said.

A group of Democratic lawmakers that includes Sen. Elizabeth Warren (D-Mass.) and House Assistant Speaker Katherine Clark (D-Mass.) sent Biden a letter Friday calling for the plan to include at least $700 billion in investments in child care, which is much less funding than the Post has reported will be included in Biden’s plan.

“We believe this is a generational opportunity to invest in affordable, quality care for all children who need it, and we urge you not to let it go to waste,” the lawmakers wrote.

Democrats are also pushing for health care related priorities to be a part of the package. 

For example, a group of House members first elected to Congress in 2018 and 2020 on Friday wrote a letter to Biden urging him to make permanent the expansion of ObamaCare subsidies enacted earlier this year, as well as to include provisions to lower prescription drug costs.

“As you prepare to announce your American Families Plan, we urge you to advance comprehensive coverage and affordability provisions,” the lawmakers wrote.

Additionally, groups of both House and Senate Democrats in recent days sent letters to Biden that urged the president to lower the Medicare eligibility age and expand benefits under the program. The lawmakers proposed paying for these changes by allowing Medicare to be able to negotiate with pharmaceutical companies on prescription drug prices.

“We have an historic opportunity to make the most significant expansion of Medicare since it was signed into law,” the senators wrote in their letter.

The Post reported over the weekend that the plan is expected to extend the expansion of the ObamaCare subsidies but not include congressional Democrats’ other health care asks. Deese on Monday wouldn’t confirm whether provisions on prescription drugs would be included but said that Biden considers addressing the rising cost of prescription drugs a priority.

All of the provisions being pushed by various Democrats have their supporters, but lawmakers’ priorities would also add to the package’s cost — which could lead to calls for more tax increases to pay for the new spending.

The White House has repeatedly said any tax hikes will not hit households making less than $400,000 per year, but Republicans are already starting to argue that the middle class could be impacted by the tax increases.  Any additional spending added to Biden’s plan could provide more opportunities for Republicans to sharpen their attacks that Biden and Democrats are doing too much on raising taxes.

Beyer said that the many requests from Democrats makes things harder for the White House, and the administration will need to determine which are the biggest priorities and the most politically feasible to accomplish.

“It’s going to have to be that blended perspective of both policy and politics,” he said.

Tags Brian Deese Child care Donald Trump Elizabeth Warren Infrastructure Joe Biden Katherine Clark Michael Bennet Ron Wyden Rosa DeLauro Sherrod Brown Suzan DelBene tax hikes

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