Biden Administration is planning for a $3T Infrastructure & Economic Package

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The Biden administration officials are making a plan for a multipart infrastructure and economic package. The supposed package could cost around $3 trillion. It would fulfill key elements of President Biden’s campaign agenda. The first proposal would center on roads, bridges, and other infrastructure projects including many of the climate-change initiatives Biden outlined in the “Build Back Better” plan, released during the 2020 campaign. The package would be followed by measures focusing on education and other priorities including extending the newly expanded child tax credit scheduled to expire at the end of the year and providing for universal prekindergarten, and tuition-free community college. The plan could face a difficult path through the narrowly divided Congress.

Point to be noted that all Democrats aren’t in agreement on how they should move forward with their spending and tax proposals. President Biden is expected to be briefed on the details of the proposals this week. He would need to sign off on the legislative strategy for it to move forward. The New York Times also reported some details of the strategy under consideration. The White House press secretary, Jen Psaki said, “Those conversations are ongoing, so any speculation about future economic proposals are premature and not a reflection of the White House’s thinking”. The price tag of the next package is sure to draw objections from Republicans. On Monday, US Senate Minority Leader Mitch McConnell spoke on the Senate floor and panned the idea of including other Democratic priorities in an infrastructure package.

McConnell said, “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”. Senior Biden administration officials have discussed raising taxes on companies to offset the cost of the spending packages. If the proposals add up to $3 trillion over a decade, that would represent 1% of GDP and a 5% increase in federal spending beyond current projections. Democrats are also exploring raising the top marginal income-tax rate for high-income individuals, increasing capital-gains taxes, and tightening international tax rules on companies. The chairman of the Senate Finance Committee, Ron Wyden is expected to detail more international-tax proposals soon.