‘Men have done much better,’ Biden’s Commerce Secretary says as the share of women in the workforce hits a 30-year low

gina raimondo
Commerce Sec. Gina Raimondo.

  • The lack of caregiving has forced women out of the labor force during the pandemic.
  • Commerce Sec. Gina Raimondo told Fortune that caregiving needs to be a part of infrastructure.
  • Vice President Kamala Harris has called women’s exodus from the workforce a “national emergency.”

Jobs are once again being added to the labor market and the economy is showing signs of recovery from the pandemic. But this recovery is not equal, and Commerce Secretary Gina Raimondo said President Joe Biden’s infrastructure plan represents an opportunity to change that.

“You cannot have a strong workforce, a strong economy, and a strong democracy if women aren’t included,” Raimondo told Fortune in an interview.

Raimondo is referring to the toll the pandemic has taken on women in particular, which Vice President Kamala Harris called “a national emergency” in an opinion piece she wrote in February. The latest monthly jobs data found that over 1.6 million women are still missing from the workforce, putting their labor participation rate 11 percentage points lower than men, and at its lowest levels since 1989. A major reason for this is the lack of caregiving opportunities that are keeping women from returning to work, which is why “men have done much better” in the economic recovery, Raimondo said.

Despite a labor shortage, 97% of women who rejoined the workforce are still unemployed

Insider reported in the beginning of July that even as more women are rejoining the labor force, the vast majority of them – 97%, that is – are still unemployed, compared to just the 12% of men who rejoined. And August research from the Census Bureau found that, among those not working, 32.1% of women ages 25 to 44 weren’t working because of childcare, while The New York Times reported that potentially 1.5 million mothers had left the labor force between the onset of the pandemic and September 2020.

That’s why a major part of Biden’s American Families Plan included investments in care-economy measures, like $225 billion for affordable childcare and $225 billion for a national paid family and medical leave program.

“Businesses need to support these investments in the care economy, in the same way that they would support investments in anything else-roads, bridges, airports, Amtrak,” Raimondo said. “Women need to be able to go to work and reliably hold down a job without worrying if their kids are being cared for-or spending half their income on childcare.”

Raimondo’s call is the latest from a growing number of Democratic lawmakers who want to ensure care-economy measures are not left behind in the final draft of Biden’s infrastructure plan.

Although Biden reached an agreement with a bipartisan group of senators on the American Jobs Plan, it left a number of measures out, like caregiving for the elderly, and some Democrats have said they will not support this bipartisan agreement unless a reconciliation bill consisting of care-economy measures is passed alongside it.

“Now is the time to make critical investments in our care economy and care infrastructure, so we can increase women’s participation in the labor force and have vibrant economic growth,” Raimondo said. “We cannot wait. It has to happen now.”

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The White House offers to cut infrastructure plan down to $1.7 trillion

amtrak joe biden
President Joe Biden.

  • The White House presented a $1.7 trillion infrastructure counteroffer to Republicans.
  • It slashes the $2.25 trillion price tag substantially and reduces funding for roads and bridges.
  • The counteroffer came after a GOP group did not meet a Tuesday deadline to bring a new offer.
  • See more stories on Insider’s business page.

President Joe Biden has offered to cut down the cost of his infrastructure plan – the American Jobs Plan – from $2.25 trillion to $1.7 trillion, presenting a counteroffer to Republicans on Friday.

The offer did not address the $1.7 trillion American Families Plan, which is largely focused on care-economy measures, so the initial $4.1 trillion combination of packages would now come to about $3.2 trillion.

White House press secretary Jen Psaki said that officials including Transportation Secretary Pete Buttigieg and Commerce Secretary Gina Raimondo offered up the reduced package.

“In our view, this is the art of seeking common ground,” Psaki said.

Psaki said that proposed funding for broadband was reduced to match that of Republicans, and proposed funding for roads, bridges, and major projects was also reduced to be more in line with senators’ proposals. Investments in research and development, supply chains, manufacturing, and small businesses will be shifted into different legislative pushes.

But the White House said it would continue to push for funding for critical transportation infrastructure, especially railways.

Psaki also said the White House planned to reiterate the president’s unwillingness to raise taxes on Americans making under $400,000, such as through a gas tax and user fees.

“He believes that the extraordinarily wealthy, that companies – many of whom have not paid taxes in recent years – can afford a modest increase to pay for middle-class jobs,” Psaki said.

Republicans had previously offered a $568 billion counteroffer to the White House, well below the $2.25 trillion originally proposed and still substantially lower than the new counteroffer. It would preserve Trump-era tax cuts, which are directly countered in Biden’s proposed funding.

After the GOP group met with Biden last week to discuss its $568 billion counterproposal, Biden gave them a Tuesday deadline to bring him a new plan to negotiate, but that never happened.

Instead, the group met with Buttigieg and Raimondo, and a new plan wasn’t introduced, with the senator from West Virginia who led the Republican plan, Shelley Moore Capito, telling reporters after the meeting that there was “progress, but we still got a ways to go.”

“I think they’re digesting what we proposed, and I think the plan is for them to react to that,” Capito added.

Capito’s office said in a statement to Insider that Friday’s White House offer was “well above the range of what can pass Congress with bipartisan support” and that Republicans and the White House still differed on what’s considered infrastructure, how much should be spent on it, and where that money should come from.

“Based on today’s meeting, the groups seem further apart after two meetings with White House staff than they were after one meeting with President Biden,” Capito’s office said. “Senate Republicans will further review the details in today’s counteroffer and continue to engage in conversations with the administration.”

Separately this week, Capito also floated using unused unemployment benefits to fund infrastructure after April’s weak jobs report, which caused a growing number of GOP-led states to end Biden’s weekly $300 unemployment benefits early.

The White House’s counteroffer comes as Democrats are increasingly calling on Biden to ditch negotiations with Republicans and act big on infrastructure legislation.

Psaki said the negotiations were an art of a “different kind of a deal – a deal for the working people.”

Read the original article on Business Insider

Move aside, hot vax summer. Biden is bringing hot tax summer to the US.

Felipe Castro holds a sign advertising a tax-preparation office for people who still need help completing their taxes before the IRS deadline on April 14, 2010, in Miami.
Felipe Castro holds a sign advertising a tax-preparation office for people who still need help completing their taxes before the IRS deadline on April 14, 2010, in Miami.

  • This summer everyone in Washington will be talking about taxes, while parents will get a tax credit.
  • Biden wants to raise taxes to pay for a huge infrastructure bill that may be ready in July.
  • Meanwhile, millions of American parents will start getting checks from Biden’s expanded tax credit.
  • See more stories on Insider’s business page.

You’ve probably heard that it’s hot vax summer. Vaccination rates have climbed, mask mandates are lifting, and Americans are slowly starting to venture into the first semblance of the After Times. In anticipation of the US fully reopening, cooped-up Americans are buying new going-out clothes and getting ready for the intimacy they put on pause. Even brands are getting thirsty.

But another thing will be heating up this summer: tax policy. President Joe Biden has already shepherded a law through Congress that will change the tax code (for a few years) to send monthly checks to American families, and he’s hard at work on another that would raise taxes on corporations and families earning more than $400,000 a year.

The tax-credit checks will start going out in July, just when Speaker Nancy Pelosi has vowed to deliver Biden his infrastructure bill in the House.

The stakes are scorchingly high, because despite the reopening economy, the pandemic exacerbated preexisting inequalities, while millions of Americans remain unemployed and April’s surprisingly dismal jobs report showed an uneven labor-force recovery.

Enter the hot tax summer.

Biden wants to raise taxes on the wealthy and corporations to offset massive infrastructure spending

Some of the country’s highest earners will see tax increases if Biden gets his way. He’s proposed increasing the income tax rate to 39.6% for Americans earning over $400,000, and raising the capital gains rate to the same level.

That increase – targeted only at Americans earning $1 million or more – would hit wealthy investors who get the bulk of their income from assets like stocks. The capital gains rate is generally lower than the rate that income is taxed at. As Insider’s Liz Knueven reported, the change would affect just about 0.4% of American taxpayers.

Overall, only the top 1% of filers would be affected and have to pay $100,000 more a year in taxes.

“This is about making the average multimillionaire pay just a fair share,” Biden said in a fiery speech defending the increases. “It’s not going to affect their standard of living a little bit.”

Significantly, Biden also wants to close up some tax-code loopholes and to ramp up tax enforcement on the wealthiest American, who have been found to hide billions in income from the IRS. The IRS estimates that there’s a tax gap of $441 billion a year. But Charles Rettig, the agency’s commissioner, has told Congress that the number could actually be over $1 trillion.

The gap between taxes owed and taxes paid could grow only if left untouched, according to the Department of Treasury. Treasury estimates that Biden’s proposed $80 billion investment in the IRS could bring in an additional $700 billion over 10 years. That would still leave hundreds of billions in taxes going uncollected each year, as Insider’s Ayelet Sheffey reported.

Biden’s also proposed raising taxes on corporations, aiming to bring the corporate tax rate up to 28% from 21%, though it will likely end up closer to the international average rate of 25%.

Meanwhile, an expanded tax credit will start putting checks into families’ pockets

Regardless of what happens with the infrastructure negotiations, many Americans will start feeling the effects of new Biden tax policies this summer.

Beginning July 15, families will start receiving monthly checks of up $300 from the IRS. Every 15th of the month for the next year – unless it falls on a holiday – checks will come. Those checks come from the expansion of the child tax credit, which was revamped under Biden’s $1.9 trillion American Rescue Plan.

One of Biden’s proposals in the American Families Plan is extending those checks through 2025 (many Democrats want to make them permanent). The checks are, as Insider’s Aria Bendix reported, essentially akin to basic income, and most children in the United States are set to benefit from then.

Low-earning Americans will also see an income boost from the expanded Earned Income Tax Credit, which subsidizes wages. According to an analysis from the left-leaning Center on Budget Policy and Priorities, over 17 million adults will now be eligible for an expanded subsidy.

Biden’s proposed tax increases are already seeing pushback. Some businesses have come out against the corporate increase, and there’s likely to be a lot of back and forth over what can and cannot be included in Biden’s two-pronged infrastructure package.

As Politico reported, lobbyists and executives think that they’ll be able to kill off many of the tax hikes that the president is putting forward. That could put some of Biden’s promises in jeopardy.

So while it’s not clear what, exactly, taxes will look like on the other side of all of this, they’re already in the spotlight – and they’ll probably only become a hotter topic as the temperature goes up this summer.

Read the original article on Business Insider

Kids in universal pre-K are more likely to attend college and graduate high school, study finds

Connecticut pre-k school coronavirus
  • A new study finds that children who attended universal pre-K were more likely to attend college.
  • Universal pre-K also seems to have positive behavioral impacts on attendees across race and income.
  • President Biden wants to establish universal pre-K and more affordable childcare in his new package.
  • See more stories on Insider’s business page.

President Joe Biden wants to establish universal pre-K as part of his infrastructure package, proposing a $200 billion investment. The White House estimates the program could benefit 5 million children, and save the average family $13,000.

But it could have a bigger impact: A new study finds that kids who attended universal pre-K are more likely to graduate from high school and attend college.

The study, conducted by researchers from University of Chicago, MIT, and UC Berkeley, looked at 4,000 public preschool applicants in Boston; they compared the outcomes of students randomly selected by lottery for the program versus those whose numbers were not called.

Attending that universal pre-K did not have a “detectable” impact on standardized test scores. It did, however, have notable impacts elsewhere: The students that enrolled in preschool were 6% more likely to graduate from high school. They were also likely to enroll in the SAT, and to enroll in college.

In the short term, too, students fared better behaviorally: The likelihood of juvenile incarceration went down, along with the total number of high-school suspensions. Benefits were widespread. Students across races and incomes felt benefits similarly, with boys seeing a slightly impact.

“Notwithstanding the gender difference, this study suggests that all students – regardless of race or income – are likely to benefit from a universal preschool program,” the researchers wrote in a brief.

Universal pre-K and affordable childcare could also have a big impact on parents

The American Families Plan contains several childcare-centered provisions, with universal pre-K as one of its planks. Biden has also proposed $225 billion in funding for affordable childcare. An analysis from the National Women’s Law Center and Columbia University found that access to affordable childcare doesn’t just benefit children; it could boost lifetime earnings for women with two children by $94,000.

Additionally, access to universal childcare options would also boost the number of women – especially mothers – in the workforce, an issue that’s come into stark relief with the surprisingly dismal April jobs report.

According to the NWLC and Columbia, expanding childcare access could increase the number of women with young children working full-time by 17%.

Biden has proposed increasing income tax rates for the wealthiest Americans and upping capital gains rate – along with closing some potential loopholes and cracking down on tax enforcement – to offset the costs of his childcare proposals.

“We can take … this money and pay for universal pre-K for every three- and four-year-old in America,” Biden said in remarks on the American Families Plan. He added that it’s a choice:

“[Is it] more important to shield millionaires from paying their fair share? Or is it more important that every child gets a real opportunity to succeed from an early age and ease the burden on working families?”

Read the original article on Business Insider

How Biden’s historically diverse administration plans to improve workforce diversity and economic equity

Biden cabinet
Joe Biden holds the first Cabinet meeting of his presidency on April 1, 2021.

  • President Biden vowed to appoint the most diverse Cabinet in history and fix economic inequities.
  • Financial support for women, communities of color, and low-income American are among the pledges.
  • The president faces an uphill battle to get the plans through Congress amid Republican resistance.
  • See more stories on Insider’s business page.

President Joe Biden promised his Cabinet would be the most diverse in history. Recently released data revealed his progress.

After saying he wanted his administration to “look like America” in December last year, the 78-year-old president has mostly succeeded in his plan to diversify the executive branch, according to an analysis by Insider in February.

As the country tries to emerge from the worst economic crisis since the 1930s, Biden has installed a diverse team to forward his economic and business agenda, which includes tackling entrenched inequities.

Among them, Treasury Secretary Janet Yellen as the first woman to lead the department in its 231-year history, Cecilia Rouse as the first African American to chair of the Council of Economic Advisors, and Pete Buttigieg as the first openly gay cabinet member in his role as transportation secretary.

Last week marked the first 100 days of the Biden administration. We take a look at some of the actions taken since his January inauguration to promote diversity in business, the workplace and support communities disproportionately affected by the Covid-19 pandemic.

Bridge
Biden’s $2 trillion American Jobs Plan aims to rebuild the country’s aging road and bridge network.

A $2 trillion infrastructure plan that targets funding towards underserved neighborhoods

Biden’s proposed $2 trillion infrastructure bill sets out to repair the country’s dilapidated road and bridge network, expand access to high-speed broadband and accelerate the clean energy transition.

The American Jobs Plan targets infrastructure projects towards historically underserved communities. The plan includes proposals to replace lead pipes that disproportionately harm Black children and a $20 billion investment to “reconnect” previously cut-off areas to affordable public transportation systems.

The plan would also build more climate-resilient public infrastructure, with a focus on low-income people and communities of color, who are most vulnerable to the impact of extreme weather events such as flooding.

However, Republicans have opposed the bill, citing its “far-left” priorities and the corporate tax hike Biden has said will finance the plan.

Jennifer Granholm
Energy secretary Jennifer Granholm speaks at Howard University.

Proposed funding to build a diverse clean-energy workforce, with investments targeted towards historically Black colleges

Biden’s administration is pushing for more solar panels to be installed in communities disproportionately affected by pollution, as part of his American Jobs Plan.

The Department of Energy announced on Tuesday that $15.5 million would go into installing solar panels in underserved communities and training a diverse clean-energy workforce.

The DOE also committed $17.3 million to fund internship and research programs, with a focus on training more students of color in STEM fields. More than $5 million will be directed to 11 colleges, including historically Black universities Howard and Florida A&M.

Historically Black colleges have long been denied equal access to federal funding opportunities, DOE secretary Jennifer Granholm said in a roundtable discussion at Howard University on Monday.

“This administration is really committed to making the transition to clean energy an inclusive transition, offering benefits to every community,” Granholm said.

Working mom
Biden’s American Families Plan aims to support working mothers.

A plan to introduce 12 weeks of paid family leave – and Biden hopes it will encourage women to stay in the workforce

Biden has introduced a $1.8 trillion American Families Plan – made up of a mix of investments and tax cuts – that would create a national paid family and medical leave program.

The plan is estimated to cost $225 billion over 10 years.

The Biden administration hopes that introducing 12-weeks of paid family leave will help mothers to keep working, reduce racial disparities in lost wages, and improve children’s health.

Biden’s plan also commits to providing support for low- and middle-income families to access childcare, ensuring this does not account for more than 7% of their income, and investing in the childcare workforce.

Childcare workers are among the most underpaid in the US and more than nine in ten jobs are held by women, and more than four in ten by women of color.

D&I training
Biden reversed a decision by former President Trump to ban federal workplace diversity training.

An overturn of Trump’s ban on federal workplace diversity and inclusion training

One of Biden’s first actions as president was to revoke the workplace diversity training ban, signed by former President Trump, across federal agencies and their contractors.

Biden issued an executive order on his first day in office, which overturned Trump’s ban on diversity and inclusion training that taught critical race theory and involved discussions on institutional racism.

The new order instead advances a “whole-of-government” approach to addressing racial inequities, and asks federal agencies to consider whether their policies and programs create barriers for underserved communities to access their benefits and services.

Takeout delivery
Biden has extended unemployment insurance for gig workers.

Targeted Covid-19 relief, including protections for those in insecure work

The landmark $1.9 trillion stimulus package includes funding commitments to help communities that have been disproportionately affected by the pandemic.

In the law, signed in March, $5 billion is provided to farmers of color to invest in their business, buy equipment and repay loans.

“This is a big deal for us,” John Boyd, Jr., president of the National Black Farmers Association, told CBS. “We see this as a great opportunity to help thousands.”

In the package, unemployment insurance for self-employed and gig workers, such as ride-share and takeout delivery drivers, has been extended until September.

In announcing the plan, Biden called on businesses to provide back hazard pay to frontline workers – who are disproportionately Black, Latino and Asian American and Pacific Islander – in retail and grocery sectors. It was employers’ “duty,” the proposal stated, to compensate workers who had risked their lives to keep businesses running.

Biden still faces a challenging road ahead

The president’s administration has taken bold and swift action in its first 100 days, even winning praise from more left-leaning members of his own party. But the impact of Biden’s policies will only be felt in the coming months and years.

Biden still faces an uphill battle to get his Jobs Plan and Families Plan through Congress in the face of Republican opposition and with a razor-thin majority.

Read the original article on Business Insider

The 3 economic pledges that will shape Biden’s $4 trillion bareknuckle fight over infrastructure

Joe Biden and Mitch McConnell speaking
Senate Minority Leader Mitch McConnell and President Joe Biden.

  • Biden is entering a more complicated phase of his presidency, as the fight over his infrastructure plans drags on.
  • Biden’s pledges will be tested, including no tax hikes for families earning less than $400,000.
  • McConnell said on Wednesday that “100% of my focus is on standing up to this administration.”
  • See more stories on Insider’s business page.

With the first 100 days behind him, Joe Biden is entering a new phase of his presidency – one with the capacity to be a lot messier than the initial three months of the administration.

The White House is now gearing up to shepherd $4 trillion in new spending plans through the cauldron of Congress. Democrats have paper-thin majorities in both the House and the Senate, where their control stems from Vice President Kamala Harris’s tie-breaking vote.

Biden has brought up and doubled down on three economic pledges over the past week:

  • No tax hikes for families earning below $400,000,
  • Willingness to negotiate with Republicans on infrastructure package, and
  • No deficit-spending on his long-term economic plans.

These promises are setting the parameters for the Biden administration’s next stage and test the limits of the president’s economic ambitions, given the strong Republican opposition to his proposals.

Mark Warner
Sen. Mark Warner (D-VA).

Roadblocks ahead for spending on roads, bridges, and more

The White House is likelier to face more roadblocks compared to its push to pass $1.9 trillion in emergency virus relief spending earlier in the year. Some of it will arise from Democrats themselves.

“As far as I can tell, this next tranche of spending will be a lot more difficult to get done than the last one,” Jim Manley, a former aide to Senate majority leader Harry Reid (D-Nev.), told Insider. “Not only am I not convinced that Republicans are going to play ball, but there’s also some differences with Democrats – not only in the House, but the Senate as well – about how to proceed.”

Centrist Democrats are already pushing to trim some of the tax hikes that Biden has laid out, largely focused on fetching new revenue from multinational firms, high-earners and other wealthy Americans.

Sen. Joe Manchin (D-W.Va.) said he favors a 25% corporate tax rate, lower than the 28% level the president called for. He’s also insisted on cooperating with Republicans on a wide range of issues, including the economy.

Manchin isn’t alone on corporate taxes. Sen. Mark Warner (D-Va.) told NBC News on Tuesday that he “probably wouldn’t go as far” as Biden on a corporate tax increase. He also voiced some disapproval with the White House’s early move to rule out user-fees to finance infrastructure.

“I wish the president had not taken user fees off the table, whether it be a gas tax or whether it be vehicle-miles traveled,” Warner said. “I think user fees make sense and they need some bipartisan support.”

User-fees enjoy strong support from Republicans, who argue infrastructure spending should financed by people who benefit from the federal investments – essentially, the people who will drive on a rebuild road or bridge should pay for it.

A group of Senate Republicans led by Sen. Shelley Moore Capito put forward a $568 billion infrastructure counteroffer mostly focused on roads, bridges, water systems, and broadband in mid-April. That part of the plan is unlikely to gain the administration’s backing. White House Press Secretary Jen Psaki said last month that user-fees would violate Biden’s tax pledge, which she described as a “line in the sand for him.”

Biden is still attempting to cut a deal with the GOP. Psaki recently said he’s meeting with Capito and other Republicans at the White House next week to discuss infrastructure. It remains unclear if they can strike an agreement given wide differences on the scope of their spending plans and who should pay for them.

Senate Minority Leader Mitch McConnell (R-Ky.) drew a red line of his own on Monday, saying Republicans would not go above $600 billion for an infrastructure plan, an amount less than a fifth of Biden’s spending proposals. Two days later, he said at a press conference in Kentucky that “100% of my focus is on standing up to this administration.”

Other Democratic bills on voting rights, immigration, and DC statehood have garnered no GOP support.

“As far as I can tell, Sen. Manchin is the only Democrat left on Capitol Hill that still thinks its possible to cut deals with McConnell,” Manley said.

Read the original article on Business Insider

Most voters support Biden’s American Families Plan, poll finds

U.S. President Joe Biden addresses a joint session of Congress as Vice President Kamala Harris (L) and Speaker of the House U.S. Rep. Nancy Pelosi (D-CA) (R) look on in the House chamber of the U.S. Capitol.
President Joe Biden addresses a joint session of Congress as Vice President Kamala Harris (L) and Speaker of the House U.S. Rep. Nancy Pelosi (D-CA) (R) look on in the House chamber of the Capitol.

  • A Morning Consult/Politico poll found 58% of voters support Biden’s American Families Plan.
  • Individual provisions within the plan, such as universal pre-K, are even more popular.
  • Republican lawmakers oppose the scope and price of the plan, calling it a “$4.1 trillion grab bag.”
  • See more stories on Insider’s business page.

While Republican lawmakers have strongly opposed President Joe Biden’s American Families Plan, citing concerns with its $1.8 trillion price tag and corporate tax hikes, a new poll found the majority of voters, including Republicans, support it.

A Morning Consult/Politico poll released on Wednesday found that 58% of all voters support the president’s plan, with 86% of Democrats, 54% of Independents, and 25% of Republicans backing it. Meanwhile, individual provisions within the plan were found to have more support than the overall package, with 64% of voters supporting ensuring low- and middle-class families pay no more than 7% of their income on childcare.

“The poll, conducted in the days after Biden’s address to Congress unveiling the plan, shows that most of the individual provisions in the package are more popular among voters than the plan overall – something to keep in mind as Biden reportedly considers splitting his proposal into multiple parts to reach a bipartisan compromise,” the poll said.

Here are other main findings from the poll:

  • 63% of voters support universal pre-K for 3- and 4-year-olds;
  • 59% of voters support two years of free community college;
  • 59% of voters support a $15-per-hour minimum wage for childcare workers;
  • 57% of voters support extending the expanded child tax credit;
  • And 56% of voters support two years of subsidized tuition for Historically Black Colleges and Universities and minority serving institutions.

Biden has cited this kind of bipartisan voter support from polling in arguing for a new definition of bipartisanship that doesn’t necessarily include any Republican votes.

Before unveiling his plan, for instance, Biden said there’s no reason why infrastructure cannot be bipartisan, and The Washington Post reported in April that Biden’s definition of “bipartisanship” means support from Republican and Democratic voters – not necessarily Republican lawmaker. Indeed, while not a single Republican in Congress voted for Biden’s stimulus, several have touted elements of it. Even House Minority Leader Kevin McCarthy promoted a restaurant aid program from the stimulus.

Democratic lawmakers have advocated for the individual provisions, such as extending the expanded child tax credit from Biden’s $1.9 trillion stimulus. Many members of the party want it to be permanent, instead of the four-year extension Biden proposed.

When it comes to the price of the plan, although the majority of voters support the spending, Democrats and Republicans disagree the topic. On Monday, Senate Minority Leader Mitch McConnell drew a red line at $600 billion for infrastructure and jobs, which is less than a fifth of the $4 trillion in spending Biden proposed.

“I don’t think there will be any Republican support – none, zero – for the $4.1 trillion grab bag, which has infrastructure in it, but a whole lot of other stuff,” McConnell said.

McConnell’s remarks followed a group of GOP senators unveiling a $568 billion counter-proposal, largely focused on physical infrastructure, which Democrats called “a slap in the face” and “a joke.”

Separately, Penn Wharton Budget Model released an analysis on Wednesday that found Biden’s American Families Plan will actually cost $700 billion more than the White House’s initial $1.8 trillion estimate, while also noting that strengthened Internal Revenue Service enforcement will help raise $1.3 trillion in tax revenue over 10 years.

Read the original article on Business Insider

Treasury Secretary Janet Yellen says Americans can expect a ‘big return’ from Biden’s $4.1 trillion spending proposal

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Treasury secretary Janet Yellen pushed for stimulus checks

  • President Biden’s spending plans can offer a “big return,” Tres. Sec. Janet Yellen said Sunday.
  • The measures should be paid for while interest rates sit at historic lows, she added.
  • If inflation rises more than expected, the government “has the tools to address it,” Yellen said.
  • See more stories on Insider’s business page.

Treasury Secretary Janet Yellen reiterated her support for President Joe Biden’s spending plans on Sunday, pitching the measures as strong investments in the country’s future.

The president on Wednesday rolled out a $1.8 trillion spending proposal that includes funding for paid family and medical leave, universal pre-K, and childcare. The measure follows the March passage of Biden’s $1.9 trillion stimulus package and joins the president’s $2.3 trillion infrastructure plan as his latest step in big-government economic policy.

Republicans and some moderate Democrats have balked at the follow-up plans cost, saying the measures would dangerously inflate the government’s debt pile. Yellen countered on NBC’s “Meet The Press,” saying it’s a better time than ever to spend on such projects.

“We’re in a good fiscal position. Interest rates are historically low… and it’s likely they’ll stay that way into the future,” the Treasury Secretary said. “I believe that we should pay for these historic investments. There will be a big return.”

That’s not to say the government shouldn’t offset the multitrillion-dollar price tag. The Biden administration rolled out a handful of tax hikes and stronger enforcement to cover the spending, but those proposals were swiftly rejected by Republicans. The GOP has criticized Biden’s public-works plan and a proposed corporate tax increase, calling it a “slush-fund” and a “Trojan horse” for Democratic priorities.

The economy is poised to rebound from the coronavirus pandemic throughout 2021 and, in turn, bring in greater tax revenues. That stronger growth justifies some spending, but the safest and most sustainable way to spend on infrastructure and care involves equitable tax increases, Yellen said.

Stricter tax compliance would also play a critical role. The country is currently estimated to lose $7 trillion through tax underpayment over the next decade. Stepping up compliance efforts and adequately funding the IRS can also boost tax collection, Yellen added.

The Treasury Secretary also rebuffed concerns of the massive spending fueling a sharp rise in inflation.

Administration officials and the Federal Reserve already anticipates the latest stimulus and economic reopening to drive a sharp but temporary bout of stronger inflation. While Biden’s latest proposals are far larger than the March stimulus, plans to spend them over eight to 10 years cuts down on the risk of rampant inflation, Yellen said.

“I don’t believe that inflation will be an issue, but if it becomes an issue, we have tools to address it,” she added. “These are historic investments that we need to make our economy productive and fair.”

Read the original article on Business Insider

Biden won’t get all his tax increases through Congress. Here’s what Morgan Stanley thinks is possible.

joe jill biden
President Joe Biden and First Lady Jill Biden.

  • President Joe Biden wants to pay for his infrastructure proposals with tax increases.
  • Morgan Stanley strategists predict taxes will go up, but not as much as Biden’s proposing.
  • Still, it said Americans earning over $400,000 should expect to see their income tax rate increase.
  • See more stories on Insider’s business page.

President Joe Biden wants to increase taxes on some of the country’s highest earners to pay for affordable childcare, paid family leave, and free community college.

But how much will taxes actually go up? Morgan Stanley thinks Biden will only get some of what he’s asking for.

The investment bank cited comments from moderate Democratic Sen. Joe Manchin of West Virginia in predicting that a 25% corporate tax rate – not 28%, as Biden proposed – is possible. And while the income rate increasing to 39.6% for those earning over $400,000 remains possible, it said, an increase to the capital gains rate would be 30% or below, not the 39.6% currently proposed.

Manchin has signaled he wants a corporate tax rate closer to 25%, while Axios reports that some Senate Democrats are also currently resistant to potential tax hikes.

The bank also said that extending a 3.8% Obamacare tax to high earners is likely possible, but eliminating the step-up basis, which allows valuable assets to be passed along without taxes on any of its gains, may not be.

Screen Shot 2021 04 29 at 9.28.45 AM
Chart via Morgan Stanley.

Increased funding for ramped-up IRS enforcement – which would target the wealthiest Americans, and ensure they’re paying taxes owed – is possible, according to Morgan Stanley. That measure alone could bring in an additional $700 billion over the next decade, according to the Department of Treasury. But, as Insider’s Ayelet Sheffey reported, that boost in funding would likely mean the wealthiest would still be hiding hundreds of billions every year.

Since neither eventual bill is likely to garner GOP support, the bank said a package is likely headed for party-line reconciliation – and require some negotiation.

Still, Morgan Stanley’s base case sees Congress passing about $4 trillion in spending, whether it’s in one package or two, essentially the total that the White House wants.

“Look, I’m not out to punish anyone. But I will not add to the tax burden of the middle class of this country,” Biden said on Wednesday evening in his first joint address to Congress. “They’re already paying enough. What I’ve proposed is fair. It’s fiscally responsible.”

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‘Thank you, Jill’: The First Lady is a key voice on Joe Biden’s educational reforms

jill biden
First Lady Jill Biden.

  • Joe Biden credited First Lady Jill Biden for the boost to Pell Grants in his new spending plan.
  • Nearly 60% of Black students rely on Pell Grants to pay for college.
  • Jill Biden continues to teach at a community college and included education reforms in her First Lady agenda.
  • See more stories on Insider’s business page.

President Joe Biden’s first joint address on Wednesday night, during which he officially unveiled his $1.8 trillion American Families Plan, included a shoutout to a key influence on its educational reforms: First Lady Jill Biden.

Of the $1.8 trillion package, $318 billion of it is going to reforming the country’s education system, and Biden revealed that Jill Biden, who teaches at a community college while serving as First Lady, led the effort to include aid to Historically Black Colleges and Universities (HBCUs) and minority serving institutions (MSIs) and has been instrumental in advocating for education accessibility and certain education policies.

“She’s long said – if I’ve heard it once, I’ve heard it a thousand times: ‘Joe, any country that out educates us is going to outcompete us,'” Biden said during his speech.

Biden said in his speech that the reason for investing in Pell Grants is because HBCUs and MSIs “don’t have the endowments, but their students are just as capable of learning about cyber security, just as capable of learning about metallurgy, all the things that are going on that provide those jobs of the future,” and Jill Biden is to thank.

As part of the postsecondary education investments in the infrastructure plan, the president included investments in the Pell Grant program, which gives government subsidies to students who need it to pay for college. His plan proposed increasing the maximum Pell Grant award to $4,000, which would assist the nearly 7 million students who rely on Pell Grants.

This comes on top of a $39 billion program in the plan that provides two years of subsidized tuition for students from families earning less than $125,000 enrolled in a four-year HBCU or MSI.

A White House fact sheet said that among students of color, nearly 60% of Black, half of American Indian or Alaska Native, almost half of Latino, and over one-third of Native Hawaiian or Pacific Islander students rely on Pell Grants to pay for college.

Jill Biden continues to teach classes at Northern Virginia Community College and has laid out an agenda of her own, which includes educational reforms.

“She’ll be deeply involved in leading this effort,” Biden said. “Thank you, Jill.”

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