Here’s What’s in Biden’s $1.75T Social Spending Plan — and How It Will Be Paid For
Free prekindergarten for all youngsters, expanded health care and climate change programs are among the list of priorities still in the scaled-down plan
After months of talks with Democratic lawmakers, President Joe Biden outlined Thursday a $1.75 trillion framework to support families and education as well as protect against global warming.
The updated plan includes universal preschool, funding to limit child care costs and a one-year continuation of a child tax credit that was expanded earlier this year and applied to more families. But Democrats are scaling back some investments and shortening the timeframe for funding in order to whittle down spending.
The framework fits an approximately $1.75 trillion budget over 10 years, rather than the $3.5 trillion budget plan originally envisioned. Paid family leave and free community college have been jettisoned, while increased Medicare coverage has been scaled back.
Still, Democrats are hoping the programs will prove so popular that future Congresses will continue to fund them in the years ahead. It seems unlikely that any Republican will support the measure.
Negotiations are fluid and the package is very much in flux. It also won’t be possible to fully assess the details until legislative text is released.
But here’s where the framework stands so far and how the Biden administration, which vowed no new taxes on those earning less than $400,000 a year, plans to pay for it:
More Spending Plan Coverage
Child Care and Other Social Programs
- Universal preschool for all 3- and 4-year-olds funded for at least 6 years
- Subsidized child care for low-income and middle class families. Parents earning up to 250% of the state’s median income will pay no more than 7% of their income on child care. But only for six years and parents must be working, seeking a job, in school or dealing with a health issue to use this program.
- A one-year extension of the current enhanced Child Tax Credit ($3,000 per child age 6-17 and $3,600 per child age 5 and under)
- Expand free school lunch programs and provide $65 per child per month to purchase food during the summer
- Commit $150 billion toward housing affordability with the goal of building more than 1 million new rental and single-family homes. The goal would be to reduce price pressures by providing rental and down payment assistance.
- One year extension of the expanded Earned Income Tax Credit that goes to 17 million childless workers.
- Provide $90 billion for investments that would include funding maternal health, community violence initiatives, disadvantaged farmers, nutrition and pandemic preparation.
- Increases Pell Grants by $550 and expands its access to DREAMERS. Provides financial aid to low-income students.
- Expanded medicare coverage to include hearing aid benefits for senior ($35 billion for the program over 10 years)
- Expanded tax credits to reduce insurance premiums for Americans who buy insurance through the Affordable Care Act. Extension will last through 2025 and would help a family of four earning $80,000 a year save nearly $3,000 a year on insurance premiums, for example.
- Offers four years of subsidized health insurance under the Affordable Care Act exchange for people with lower incomes living in states that did not expand Medicaid under the health care law. The plan would provide $0 premiums for some four million people in the “coverage gap,” the White House said.
- Fund $320 billion worth of clean energy tax credits for 10 years to help businesses and homeowners shift to renewable energy sources. The tax credits will apply to the installation of solar panels, electric vehicles and clean energy manufacturing.
- Direct $105 billion toward investments that would improve communities’ ability to withstand the extreme weather caused by climate change. The funding would also create a Civilian Climate Corps.
- Expand electric vehicle charging stations to “facilitate the deployment of cleaner transit, buses and trucks.”
- $100 billion to bolster the legal immigration and border processing system.
How Will It Be Paid For?
Most of the financing for the social and climate spending framework will come from raising taxes on wealthy Americans and closing corporate loopholes.
- Impose a new 5% surtax on individual income over $10 million a year. That rate would rise another 3% on income above $25 million
- Institute a new 15% minimum tax on corporate profits that large corporations —those making over $1 billion in profits — report to shareholders. The White House says this minimum requirement will help close the tax loopholes large corporations have used to pay $0 in taxes.
- 1% surcharge on corporate stock buybacks
- Adopt the Treasury Department-brokered 15% minimum global tax on foreign profits of U.S. corporations, “so that they can no longer claim huge tax benefits by shifting profits and jobs abroad.”
- Additional revenue to help pay for the package would come from rolling back some of the Trump administration’s 2017 tax cuts, along with stepped-up enforcement of tax-dodgers by the IRS.
The Associated Press contributed to this report.