Biden releases slimmed-down $1.75 trillion spending framework, cutting social-benefits plan by over half


Joe Biden

President Joe Biden. Manuel Balce Ceneta/AP

  • Joe Biden released a $1.75 trillion spending framework for his Build Back Better agenda.

  • It’s far less than many Democrats wanted to spend to provide new social benefits for Americans.

  • It’s unclear whether the framework will gain support among progressives who wanted a much bigger plan.

The White House on Thursday unveiled a $1.75 trillion framework for President Joe Biden’s social-spending plan, dramatically curtailing its economic ambitions in an effort to appease the centrist holdouts Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona and break a logjam in negotiations bogging down the party.

CNN first reported the framework, which Biden is set to speak about later Thursday. It includes investments in childcare, housing, and climate, among other things.

The agreement would encompass $1.75 trillion in spending over 10 years – half of Biden’s initial proposal for the Build Back Better plan. Some key provisions include:

  • Universal preschool

  • One-year expanded child tax credit

  • Four-year extension of Affordable Care Act health-insurance subsidies

  • Tax breaks to encourage a transition to cleaner energy

  • Investments in affordable housing

The plan would be paid for with a collection of tax hikes on rich Americans. Measures include a 15% corporate minimum tax, a tax on companies that buy back their own stock to boost share prices, and a new 5% surtax for Americans earning at least $5 million in income.

The sum is far less than most Democrats had envisioned spending on a package that’s supposed to be the centerpiece of Biden’s economic agenda. Progressives, chiefly led by Sen. Bernie Sanders, initially laid out a $6 trillion budget in June. Less than a month later, Senate Democrats struck a deal on a $3.5 trillion budget plan, which they advanced in August by relying only on Democratic votes over unanimous Republican opposition.

But the $1.75 trillion plan reflects the painful sacrifices Democrats are making to win support from Manchin and Sinema, a pivotal pair of holdouts that they can’t lose in the 50-50 Senate. Manchin has attempted to limit the reach of new social benefit programs, warning that it could cause American society to slip into an “entitlement mentality.”

Some priorities, like tuition-free community college, were jettisoned because of opposition from Manchin and Sinema. Other provisions, like expanding Medicare so it would cover dental, vision, and hearing, have been pared down, with just hearing covered.

“Does Sen. Manchin really believe that seniors are not entitled to digest their food and that they’re not entitled to hear and see properly?” Sanders said earlier this month about the proposed Medicare expansion. “Is that really too much to ask in the richest country on Earth – that elderly people have teeth in their mouth and can see and can hear?”

The plan also dropped a provision that would have empowered the federal government to negotiate prescription-drug prices, long a top Democratic priority, but ran into opposition from a small group of House and Senate Democrats.

It would renew bulked-up child-tax-credit payments for only a year. House Democrats initially sought a four-year extension.

The latest price tag is far closer to centrists’ demands than those of Sanders. While provisions like universal preschool and affordable childcare remain, it doesn’t appear that paid family and medical leave has made it in. Politico first reported on Wednesday night that the leave programs were imperiled.

“It is still a little inconceivable to me that after the last 18 months – and everything we saw during the course of the pandemic – that we are hearing that Congress is going to leave paid leave for another day,” Laura Narefsky, the counsel on education and workplace justice at the National Women’s Law Center, previously told Insider.

Last week, Biden conceded that unwinding part of President Donald Trump’s tax cuts for corporations and high-earning individuals was probably out because Sinema was opposed. Instead, the bill would be financed through other measures, including enhanced IRS enforcement and a surtax on multimillionaires and billionaires. It does not appear that a tax on billionaires’ income – announced Wednesday morning and seemingly jettisoned by Wednesday afternoon – is included.

Read the original article on Business Insider

Source link