Biden unveils details of $1.8 trillion American Families Plan

Biden unveils details of $1.8 trillion American Families Plan
Hans Nichols, AXIOS
Wed, April 28, 2021, 3:00 AM

President Biden on Wednesday will present his third $1 trillion+ package to Congress since taking office, asking for $1.8 trillion in new spending to expand the American education system, provide more help for childcare and create millions more jobs.

The big picture: Biden is also proposing a series of tax hikes on the rich, which his administration vows will not hit Americans who make less than $400,000 and households with less than $1 million in capital gains.

Administration officials insist that Biden’s American Families Plan — with $1 trillion in new spending and $800 billion in tax breaks — will be entirely offset by new revenue.

Most of the $1.8 trillion cost will be covered by increasing personal taxes on individuals, but officials will also need to draw some revenue from the corporate tax increases that Biden proposed earlier this month.

The White House is calculating additional revenue over 15 years, while the spending proposals mostly cover eight years, an accounting method questioned by Republican lawmakers — and privately, by some Democrats.

Driving the news: The bulk of Biden’s proposals have been telegraphed for several days and largely reflect the promises he made during the campaign. Those "Build Back Better" proposals sought to use the COVID-19 crisis to reimagine the American economy.

But several campaign promises are missing from this proposal, including efforts to lower the cost of prescription drugs and expand Medicare eligibility — omissions that will aggravate his party's progressive base.

Biden didn’t include a campaign promise to increase the estate tax rate from 40% to 45% and lower the exemption from $11 million to $3.5 million in this package.

Wednesday's proposal comes after the $2.25 trillion American Jobs Plan the president proposed earlier this month. That focuses on physical infrastructure, like bridges and broadband, and what White House officials call human infrastructure, like caregivers and health care.

Zoom in: A centerpiece of this latest proposal is $310 billion to offer four more years of free education for all Americans, with two years of universal preschool and two years of free community college, regardless of income levels.

Biden is also building on a popular feature of the $1.9 trillion relief package he signed last month by proposing to extend child tax credits by up to $3,600 a year through 2025.

And Biden wants $225 billion to improve childcare and ensure that low and middle-income families don’t spend more than 7% of their income on childcare.

Biden also wants to make permanent tax credits for health insurance in Obamacare exchanges that were passed in last month's American Rescue Plan.

Between the lines: To pay for his plans, Biden is essentially relying on five new lines of revenue.

Raise the top marginal tax rate from 37% to 39.6% for Americans who make more than $400,000.

Treat capital gains as regular income, and tax it at the highest rate plus a 3.8% Obamacare surcharge for a total of 43.4% on households with more than $1 million in investment income.

Tax capital gains at death and eliminate the so-called “stepped-up” basis that allows estates to revalue assets after their original owner dies.

Inject some $80 billion into the IRS to audit high-income earners and collect an additional $700 billion by increased tax compliance over 10 years.

Draw on any leftover revenue from increasing the corporate tax rate, as Biden previously proposed in the American Jobs Plan, including a global minimum tax and raising the rate from 21% to 28%.

What we are asking: Will the proposed tax increases, especially on capital gains, be retroactive and capture all the massive equities’ gains in 2021?

Is the cutoff for married couples, filing as one household, $800,000 or $400,000?

The bottom line: After rushing a $1.9 trillion stimulus package through Congress on partisan lines, Biden is now signaling he wants to work with Republicans and Democrats to spend an additional $4 trillion on specific programs.

His speech Wednesday night will be an opening bid, but officials suspect that any final legislation, if there is a final legislation, will look different.

Published 10 mins ago
Two border state Dems break with Biden on the crisis: 'Want to see more action'
Arizona Sens. Mark Kelly and Kyrsten Sinema are not satisfied with Biden's handling of issue
By Jon Street | Fox News

Two border state Democratic senators say President Biden is not doing enough to address the ongoing border crisis.

In a statement released Wednesday following Biden's address to Congress, Sen. Mark Kelly (D-Ariz.) lamented the lack of attention that Biden paid to the issue during his primetime speech.

FOX NEWS POLL: THREE TIMES AS MANY SAY BORDER SECURITY WORSE UNDER BIDEN

"While I share President Biden’s urgency in fixing our broken immigration system, what I didn’t hear tonight was a plan to address the immediate crisis at the border, and I will continue holding this administration accountable to deliver the resources and staffing necessary for a humane, orderly process as we work to improve border security, support local economies, and fix our immigration system," Kelly said.

Arizona's other Democratic senator, Kyrsten Sinema, echoed Kelly.

"Sen. Sinema has been clear that she -- along with Sen. Kelly -- wants to see more action from the administration to address the border crisis and support Arizona border communities. She's spoken directly with administration officials on this," Sinema's office told Fox News.

While Biden did not address the surging number of migrants flooding the U.S. southern border, he did make a pitch to Congress to pass something that Washington lawmakers have talked about for decades but have failed to do: a comprehensive immigration bill.

"If you believe we need to secure the border, pass it because it has a lot of money for high-tech border security," Biden urged.

According to a recent Fox News poll, 46% of Americans believe the situation at the border is worse under Biden than under Trump just two years ago. Just 15% said border security is better under Biden than Trump; 33% said it is the same under Biden as under Trump.

In March, Biden tapped Vice President Kamala Harris to work with Latin American leaders on stemming the "root causes" of emigration from their countries. Nearly 40 days later, the vice president still has not traveled to the border and has not announced any plans to do so. Harris will, however, travel to Guatemala in June.