Biden Team Weighs Next Economic Plan of Up to $3 Trillion

The Biden administration is considering as much as $3 trillion worth of measures to include in the long-term economic program that will follow the $1.9 trillion pandemic-relief bill signed earlier this month, according to three people familiar with the deliberations.

The proposal will be presented to President Joe Biden this week, one person said, asking not to be named as the discussions are private.

Infrastructure and climate change have long been described as key efforts in the pending program, and the new details show the administration is eyeing some $400 billion for so-called green spending, according to the two people.

The plan also addresses investing in human capital, with tuition reductions among minorities along with health-care initiatives, one said. Another person familiar with the talks said there’ll be money for child care and elder care.

Unlike the Covid-19 emergency-spending program, the longer-term proposals will feature a major revenue-raising effort. Aides say increasing corporate taxes and rates for the wealthy will be central components of what’s set to amount to the biggest tax increases since the 1990s.

The New York Times and Washington Post earlier reported on the administration’s discussions of a $3 trillion program, likely to be divided into two separate packages.

“It’s coming soon, so this week he’ll be talking to his team about what the options are, the size and scope, the options of what it could look like,” White House Press Secretary Jen Psaki said Monday.

The $3 trillion figure compares with economists’ estimates for a range of $2 trillion to $4 trillion. The person familiar with the talks said no final spending total has yet been decided on.

Biden is expected to make his case for his so-called Build Back Better program in a joint address to Congress in April.

Separate Packages

Democratic aides have increasingly expected the program will be split into more than one package, given legislative challenges. Putting everything into a reconciliation bill, which allows for a simple majority vote in a Senate with a 50-50 partisan split, may be too difficult given the rules for what things can be included.

Republicans have already made clear they won’t favor tax increases, and are unlikely to support major spending on renewable energy.

“We’re hearing the next few months might bring a so-called infrastructure proposal that may actually be a Trojan horse for massive tax hikes and other job-killing left-wing policies,” Senate Republican leader Mitch McConnell said on the chamber floor Monday. Democrats “have an obsessive focus on climate policies to the exclusion of everything else,” he said.

But many Republicans favor more traditional infrastructure tied to transport such as highways, and have endorsed spending designed to enhance the competitiveness of American technology versus China. Senate Majority Leader Chuck Schumer has teamed up with GOP Senator Todd Young of Indiana to propose such a China-oriented bill.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.