The Biden administration is reportedly preparing a massive spending package totaling at least $3 trillion aimed at addressing a host of major policy priorities such as jobs, infrastructure, climate change, education, and income inequality.
News of the mammoth package shows the new administration plans to waste little time introducing trillions of dollars in government spending into the economy as it comes only weeks after a $1.9 trillion coronavirus relief package was passed by Congress and signed into law.
According to the New York Times, the White House may split the effort into two separate bills in order to make it more appealing in Congress, the first proposal likely being a major infrastructure plan funded through tax hikes on corporations and the rich. The second proposal would reportedly focus on other domestic priorities related to students and those left behind in the job market. It would include universal prekindergarten, free community college tuition, expanded child care, and a national paid leave program.
The Washington Post reported that the infrastructure component of the proposal is set to include "$400 billion in spending to combat climate change, including $60 billion for infrastructure related to green transit and $46 billion for climate-related research and development."
The total spending proposal, as well as how it will be paid for, is reportedly still under discussion and is subject to change. However, the final legislation is all but certain to include in a litany of tax increases.
Reports surfaced last week indicating that the administration was planning the largest tax hike in nearly 30 years to fund domestic policy initiatives. Among the specific tax increases under consideration were raising the corporate tax rate to 28% from 21%, raising the income tax rate on individuals earning more than $400,00, and implementing a higher capital gains tax rate for individuals earning at least $1 million annually.
"President Biden and his team are considering a range of potential options for how to invest in working families and reform our tax code so it rewards work, not wealth. Those conversations are ongoing, so any speculation about future economic proposals is premature and not a reflection of the White House's thinking," White House press secretary Jen Psaki said in a statement.
According to a CNBC report, Psaki clarified last Wednesday that the $400,000 threshold applies to families, not individuals. For example, individuals who make $200,000 could be affected if they are married to someone who earns that same amount.
Tax increases of any kind are likely to be a non-starter for Republicans, but it remains to be seen how the chips will fall once negotiations begin. After all, Democrats were able to sneak $60 billion in new tax hikes into the coronavirus relief bill without hardly anyone noticing.