U.S. President Joe Biden delivers remarks on his Build Back Better infrastructure agenda at the NJ TRANSIT Meadowlands Maintenance Complex in Kearny, New Jersey, U.S., October 25, 2021.
Jonathan Ernst | Reuters
WASHINGTON – President Joe Biden will announce Thursday that he has reached a deal with Senate Democratic holdouts on a $1.75 trillion social spending and climate bill, according to senior administration officials.
The apparent deal represents the culmination of months of sometimes tense negotiations between moderate and progressive lawmakers.
The package contains a wide-ranging set of programs that, if enacted, will profoundly impact the lives of families with children, low-income Americans and the renewable energy economy.
They include:
- Universal preschool for all 3- and 4-year olds, which is funded for at least 6 years.
- Subsidized child care that caps what parents pay at 7% of their income, which is funded for 6 years.
- A one-year extension of the current expanded Child Tax Credit, which impacts approximately 35 million households nationwide.
- Expanded tax credits for 10 years for utility and residential clean energy, including electric vehicles.
- Extend the current, pandemic-related Affordable Care Act subsidies for 4 years.
- Allow Medicare to cover the cost of hearing.
Also notable is what the framework bill does not contain. A longstanding proposal to create a federal paid family and medical leave system was dropped from the bill on Wednesday afternoon after Sen. Joe Manchin, a key Democratic swing vote, said he did not believe the program belonged in the bill.
Senior administration officials said Thursday that Biden is “confident this framework will win the vote of every Democratic senator,” but that they would let the lawmakers speak for themselves about it.
Biden will travel to Capitol Hill on Thursday morning to attend a meeting of the House Democratic caucus. There, he is expected to appeal to House progressives to vote for the stalled $1 trillion infrastructure bill, which has already passed the Senate.
It was unclear Thursday whether progressives would agree to rally behind the infrastructure bill, which does not contain many of their top priorities. Progressives so far have refused to back the infrastructure bill, demanding that Democratic leaders first release firm legislative language for the companion social spending bill.
Following the House meeting, Biden will deliver remarks on the framework at 11:30 am ET, before departing for a week of summits in Europe.
The announcement comes after haggling over how to pay for the plan threatened to further delay the Build Back Better agenda. Still, the caucus managed to coalesce around a handful of revenue raisers broadly aimed at big business and those Americans to make more than $400,000 annually.
Paying for it
The plan, if passed, will impose a 15% minimum tax on corporate profits by large corporations, adopt the 15% minimum global tax brokered by Treasury Secretary Janet Yellen, and apply a 5% surtax rate on individual income above $10 million.
That rate would rise another 3% on income above $25 million.The Democrats’ plan also includes a 1% surcharge on corporate stock buybacks, which the Biden administration believes “corporate executives too often use to enrich themselves rather than investing workers and growing their businesses.”
The Biden administration plans to beef up the IRS with a cash infusion to help the tax collector hiring more auditors, updating technology and expand its enforcement division. Thanks to years of budget cuts, audit rates on those making over $1 million per year fell by more than 60% over the last decade, the White House said.
Another plan that would have compelled banks to report cash-flow information to the IRS for accounts with more than $10,000 in nonwage deposits was dropped from the bill on Wednesday.
Democratic Rep. Richard Neal, chairman of the powerful House Ways and Means Committee, said it was being “reworked” to apply only to people who earn more than $400,000 a year.
This is a developing story, please check back for updates.
