The White House is finalizing a follow-up spending plan that's focused on helping American families and set to be unveiled later this month, The Washington Post reported late Monday night.
The package, known as the American Families Plan, is expected to include $1 trillion in new spending and $500 billion in new tax credits, sources familiar with internal deliberations told The Post. Such a proposal would join Biden's $2.3 trillion American Jobs Plan in his hugely ambitious spending push and follow a $1.9 trillion stimulus bill approved last month.
Where the American Jobs Plan includes funds for traditional infrastructure, nationwide broadband, and clean-energy projects, the Families Plan will place social assistance front and center.
Here's how some funding will be allocated, according to The Post:
- About $225 billion for child-care support
- $225 billion for paid family and medical leave
- $200 billion for universal pre-K schooling
- "Hundreds of billions" in education funding
- "Other sums" for nutritional assistance
The administration also aims to extend the child-tax credit included in the March stimulus package through 2025, sources told The Post. The policy gave families an annual credit of $3,600 per child aged 5 and under and $3,000 per child aged 6 to 16. The credit is slated to expire this year. The White House's proposal doesn't go as far as some Democratic legislators sought, with some pushing for Biden to make the expanded credit permanent.
"No recovery will be complete until our tax code provides a sustained pathway to economic prosperity for working families and children," Sens. Sherrod Brown, Cory Booker, and Michael Bennet, along with Reps. Rosa DeLauro, Suzan DelBene, and Ritchie Torres said in a Tuesday statement. "Permanent expansion of the CTC will continue to be our priority."
The White House is expected to reveal the new plan's details before President Joe Biden's speech to a joint session of Congress on April 28, The Post reported. The address is scheduled for the 99th day of Biden's first term and will likely focus on the administration's achievements so far.
Like with the administration's jobs and infrastructure proposal, Biden aims to offset the family plan's cost with a collection of tax hikes. The White House is expected to lift tax rates for wealthy households and investors as well as improve enforcement practices at the Internal Revenue Service, according to The Post.
The plan faces a steep uphill climb if it's to return to the president's desk for a signature. Republicans balked at Biden's job plan in recent weeks, saying the package is too large and uses too liberal a definition of "infrastructure." GOP senators also slammed Biden's proposal to lift the corporate tax rate to 28% from 21%, calling the hike a "non-negotiable red line."
Not all hope is lost for the White House. Senate Democrats could move to repeat their stimulus strategy and pass both Biden's jobs and families plans through budget reconciliation. The process requires Democrats are united in backing the bills, as they lose their simple majority if just one member strays from voting in support.
Some expect a compromise from the White House to ensure Democrats pass both measures through reconciliation. The packages will be lumped together and likely cost about $3.3 trillion by the time they reach a final vote, Goldman Sachs economists led by Jan Hatzius said in an April 11 note to clients. Biden will soften his corporate tax hike as well, lifting the rate to 25% instead of 28%. Legislation including both spending plans will likely pass without any GOP support sometime between July and September, Goldman added.
"The risk in this approach is that some centrist Democrats might balk at passing such a large bill through the reconciliation process, which could delay or potentially imperil passage," the economists said.