The 4 major takeaways from Biden’s $1.8 trillion economic spending package

Biden
President Joe Biden.

  • Biden unveiled a new spending plan focused on families with new spending on childcare and education.
  • It aims to flood federal money into sectors of the economy and make the lives of families easier.
  • The plan likely won’t attract much Republican support – if any.
  • See more stories on Insider’s business page.

President Joe Biden is aiming to unleash a flood of new federal spending to cut into inequality and realign the role of the federal government to better assist families.

The second plan is different from the first measure, which was largely focused on physical infrastructure such as roads and bridges, although it also included other provisions like major funding for in-home elder care and broadband expansion.

This plan from the White House includes around $1 trillion in new spending and $800 billion set aside as tax credits. It’s likely to undergo some changes, however, as Congress takes it up and writes the legislation in the coming months.

Here are the four key takeaways from the administration’s latest plan.

(1) Flooding new money into education and childcare

The plan would parcel out money for childcare, education, and healthcare initiatives. Experts say many parts of the plan are geared toward assisting middle and low-income families, especially those with kids.

“Almost everything in the plan would directly benefit people, particularly children, particularly lower-income children,” Jason Furman, a former top economist to President Barack Obama, wrote on Twitter. “You can’t go very wrong with these policies.”

It essentially guarantees an additional four years of education for Americans with a universal pre-K and two years of tuition-free community college. Those two measures come out to around $309 billion, largely contingent on a partnership between the federal government and states.

It also tackles the rising costs of childcare, which is often beyond the reach of many families. Most have to pay the majority of those care expenses on their own. The Biden plan aims to keep a family’s childcare spending at no more than 7% of monthly income.

(2) Biden wants the wealthiest Americans to pay up with tax hikes

The package includes tax hikes on the richest Americans. A central element in the administration’s revenue plans appears to be $80 billion set aside for the IRS to crack down on tax evasion. The White House projects raising $700 billion from the agency over a decade.

As reported by Insider’s Ayelet Sheffey, that would represent a huge jump over current collections, but still leave hundreds of billions on the table very year. It would also only partially reverse a dramatic decline in IRS audits over the past decade.

Biden also wants to raise the top marginal income-tax rate to 39.6% from 37% and hit investors earning above $1 million with a new tax on capital gains, among other things.

(3) Permanently maintaining some emergency stimulus programs

The plan includes a permanent extension of subsidies for people to buy health insurance from exchanges set up under the Affordable Care Act. It would also make permanent the Earned Income Tax Credit, a step to benefit essential workers like

The administration is likely to face pressure from Democrats to keep the boosted child tax credit. It was enlarged to $3,600-per-child under age 6 and $3,000 per kid between 6 and 17. Starting in July, parents will be able to get a monthly payment.

The current plan only extends the elevated levels until 2025, while leaving untouched the monthly payment component. Rep. Rosa DeLauro, a lead architect of the expansion and chair of the House Appropriations Committee, said in a statement to Insider that lawmakers would take up the Biden blueprint and advocate for changes.

“I look forward to turning the framework of the American Families Plan into legislation and working with Chairman Neal to enact our shared desire to include a permanent extension of the expanded Child Tax Credit in the final bill,” she said, referring to Rep. Richard Neal, chair of the House Ways and Means panel.

(4) The ‘families plan’ is unlikely to attract GOP support

Republicans were largely opposed to Biden’s first infrastructure plan, arguing it went beyond the scope of physical infrastructure spending that they could back. Some lawmakers, however, favor a slimmed-down spending plan, and negotiations are ongoing.

The GOP appears likely to resist the newest plan on the basis of its tax hikes and spending priorities.

“Even if the spending’s popular -a lot of it probably will be – the tax increases I think are going to be a hard sell, not just with people in the country or with Republicans, but I think for some Democrats too,” Sen. John Thune told reporters on Wednesday.

Read the original article on Business Insider

Lindsay Graham slammed Mitch McConnell for delaying $2,000 stimulus payments: ‘Going from $600 to $2,000 doesn’t make you a socialist’

lindsey graham
Lindsey Graham.

  • Sen. Lindsey Graham on Friday urged Congress to seriously consider giving Americans $2,000 checks, an idea that’s been rejected by Senate Republicans multiple times.
  • In a Thursday floor session, Senate Majority Leader Mitch McConnell said increasing stimulus checks from $600 to $2,000 would be “socialism for the rich.” 
  • Graham disagreed with McConnell’s characterization, saying, “Going from $600 to $2,000 doesn’t make you a socialist.”
  • Visit Business Insider’s homepage for more stories.

Sen. Lindsay Graham on Friday urged the Republican-led Senate to avoid delaying passing a bill that includes $2,000 direct checks to Americans, a move that’s been shut down by the top leaders in the upper chamber.

In a Thursday floor session, Senate Majority Leader Mitch McConnell said increasing stimulus checks from $600 to $2,000 would be “socialism for the rich.” 

“Borrowing from our grandkids to do socialism for rich people is a terrible way to get help to families who actually need it,” he said. 

McConnell’s characterization struck Graham, who pushed back against it in a tweet Friday.

 

“With all due respect to my Republican colleagues, a $2k direct payment for individuals and families who are struggling is not socialism,” Graham said. “In my view, it is necessary in the times in which we live.”

“The country is being overwhelmed by #COVID, hospitals are full, and business are hanging by a thread. Direct payments may not be the most efficient way to help people in need but, given the situation we face are extremely necessary,” he continued. 

In December, after monthslong negotiation and delays, lawmakers finally reached a deal on another coronavirus stimulus package. It came with $600 direct checks for taxpayers, in an effort to offset some of the financial devastation brought on by the coronavirus pandemic. This was the second relief package since March, when President Donald Trump signed a bill that included $1,200 direct payments to Americans.  

Since the second bill, Trump has urged Congress to come to an agreement that includes $2,000 checks for Americans. House Democrats immediately pounced on the suggestion, but McConnell has repeatedly shut it down. Friday became the fourth day in a row that Senate Republicans, led by McConnell, blocked the House-passed bill that includes $2,000 checks. 

“Going from $600 to $2,000 doesn’t make you a socialist,” Graham said in a tweet. “Mr. President, keep fighting for the American people who are suffering. Insist on a standalone vote.

The White House did not immediately respond to a request for comment from Business Insider.

Read the original article on Business Insider