Joe Biden is set to consider a plan from his top advisers to plough roughly $3tn in additional government spending into the US economy for investments in infrastructure, clean energy and education, two people familiar with the matter said on Monday.
The additional fiscal support for the US recovery would closely track Biden’s 2020 presidential election pledges to tackle some of the major structural deficiencies afflicting the US economy. It is expected to be partially offset by increases in taxes on wealthy households and US corporations.
It would represent the second stage of Biden’s ambitious economic agenda, after Congress approved a $1.9tn stimulus plan to deliver immediate relief to households during the pandemic.
Biden’s advisers have turned to infrastructure and education investment plans in recent weeks, and are expected to present the president with more detailed proposals this week. People familiar with the matter said Biden had not yet signed off on any specifics, and nothing has been finalised.
“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,” Jen Psaki, the White House press secretary, said. “Those conversations are ongoing, so any speculation about future economic proposals is premature and not a reflection of the White House’s thinking.”
Biden had previously said he wanted to present his multitrillion-dollar investment package as early as February, but that goal was quickly sidelined as White House officials and lawmakers focused on passing the $1.9tn coronavirus stimulus package.
Clinching congressional approval for a massive new round of spending with razor-thin majorities for Democrats in both the House of Representatives and the Senate may be even more difficult than it was for the stimulus package.
Although Republicans on Capitol Hill have often expressed an interest in approving more infrastructure spending, they have balked at tax increases and other domestic spending initiatives.
During the presidential campaign, Biden proposed increasing the corporate tax rate from 21 per cent to 28 per cent, as well as raising individual taxes on Americans earning more than $400,000 per year.
The New York Times first reported that Biden’s economic advisers were close to presenting the president with an investment plan worth $3tn this week, noting that they were considering splitting it into two separate packages.
The first would be focused on traditional infrastructure and clean energy investments, while the second would be centred around child care and education investments, including funding for universal pre-kindergarten courses and free community college.