White House plans another $3 trillion in spending for economy
WASHINGTON — President Joe Biden’s economic advisers are pulling together a sweeping $3 trillion package to boost the economy, reduce carbon emissions and narrow economic inequality, beginning with a giant infrastructure plan that may be financed in part through tax increases on corporations and the rich.
After months of internal debate, Biden’s advisers are expected to present the spending proposal to the president and congressional leaders this week, as well as begin outreach to industry and labor groups. On Monday, Biden’s national climate adviser, Gina McCarthy, discussed his infrastructure plans — and their role in combating climate change — in a meeting with oil and gas industry executives.
Administration officials caution that details remain in flux. But the enormous scope of the proposal highlights the aggressive approach the Biden administration wants to take as it tries to harness the power of the federal government to make the economy more equitable, address climate change, and improve American manufacturing and high-technology industries in an escalating battle with China.
The $1.9 trillion economic aid package that Biden signed into law this month includes money to help vulnerable people and businesses survive the pandemic downturn. But it does little to advance the longer-term economic agenda that Biden campaigned on, including transitioning to renewable energy and improving America’s ability to compete in emerging industries, like electric vehicles. Administration officials essentially see those goals — building out the nation’s infrastructure and shifting to a low-carbon future — as inseparable.
The package under consideration would begin that effort in earnest.
“President Biden’s plan represents a stunning shift in priorities, addressing many of the nation’s most pressing challenges,” said Seth Hanlon, a senior fellow at the liberal Center for American Progress think tank, contrasting the plan with the priorities of previous administrations. “As reported, the plan is very wide-ranging, reflecting the fact that we’ve underinvested in so many areas.”
Just how to approach the legislative strategy is still under discussion given the size of the proposal and the thin majority that Democrats hold in the House and the Senate.
Biden’s advisers plan to recommend that the effort be broken into pieces, with Congress tackling infrastructure before turning to a second package that would include more people-focused proposals, like free community college, universal prekindergarten and a national paid leave program.
Some White House officials believe the focus of the first package may be more appealing to Republicans, business leaders and many moderate Senate Democrats, given the long-standing bipartisan push in Washington for an infrastructure bill.
That plan would spend heavily on clean energy deployment and the development of other “high-growth industries of the future” like 5G telecommunications. It includes money for rural broadband, advanced training for millions of workers, and 1 million affordable and energy-efficient housing units. Documents suggest it will include nearly $1 trillion in spending on the construction of roads, bridges, rail lines, ports, electric vehicle charging stations, and improvements to the electric grid and other parts of the power sector.
Whether it can muster Republican support will depend in large part on how the bill is paid for.
Officials have discussed offsetting some or all of the infrastructure spending by raising taxes on corporations, including increasing the 21 percent corporate income tax rate and a variety of measures to force multinational corporations to pay more tax in the United States on income they earn abroad. That strategy is unlikely to garner Republican votes.