Pros and cons of big-government plan

The historic expansion of government education, health- and childcare benefits President Biden proposed on Wednesday would make it substantially easier for Americans to work, raise children and educate themselves. And yet it has significant gaps, both in taxing and in spending.

Biden proposed boosting Pell Grants, which assist lowincome students, and making two years of community college free. Meanwhile, his plan would enable parents to stay in the workforce by, for example, guaranteeing that low- and middle-income families do not pay more than 7 per cent of their incomes on childcare for children under 5.

Biden’s plan would guarantee Americans 12 weeks of paid leave in case of personal illness, the sudden sickness of a loved one or the birth of a child. And he wants to keep an expansion of the earned-income tax credit, which tops up wages for low-income workers. To offset the cost, he would boost funding for Internal Revenue Service enforcement against large companies, wealthy taxpayers and big estates, and restore the top marginal income tax rate to 39.6 per cent. He would also tax capital gains at the same rate as income for people earning more than $1 million a year.

But, yes, there is a catch or two. Biden proposed keeping the expanded child tax credit only until 2025. Fighting child poverty should take precedence over free community college. He pledged not to raise taxes on anyone making less than $400,000 a year. Meantime, the federal government is running huge deficits. Climate change, future recessions and other issues may require emergency spending. Biden can keep his tax pledge or create a strong, sustainable federal safety net. He probably cannot do both.