America needs Biden’s big budget bill
This plan would improve the lives of children, parents, the working class and seniors.
A casual reader of the news out of Washington these past few weeks has every reason to believe that our president has transformed from anodyne Uncle Joe, determined to prudently reinvest in America’s physical and social infrastructure and win over fair-minded Republicans while doing it, into a firebreathing Socialist who has lost control of his agenda. How else to read the hyperventilating headlines out of the political press, such as “Biden Throws In With Left, Leaving His Agenda in Doubt” or “Left Seizes Control of Biden’s Agenda”?
It’s the same old story: What bleeds leads, or in Washington parlance, never highlight a story about policy when you can frame it as a human drama of victory or failure.
The problem is the real drama in this story isn’t the Democratic infighting over the size of Biden’s $3.5 trillion spending plan, or the major tax increases he’s proposed to pay for it, or even the fate of the $1 trillion bipartisan infrastructure bill that has already passed the Senate, but which progressives are holding up to gain leverage for the bigger bill. The human story behind this bill is about how it will impact the lives of hundreds of millions of Americans once it gets through the congressional gauntlet.
As it stands now, the budget bill represents a long-overdue investment in human capital that would improve the lives of children, parents, the working class and seniors. It would expand education, housing, health care, women’s opportunities to work and lift millions of children out of poverty. Critically, the bill is also likely the nation’s best chance, perhaps our last chance, to make a major down payment on combating climate change, the existential crisis of our time.
These are not just worthy goals, they are key requirements for America to succeed. It’s also extraordinarily expensive. But Biden’s plan largely pays for itself, thanks to the revenue he and congressional Democrats anticipate from new and higher taxes on large corporations and wealthy individuals. That doesn’t mean it’s free of course, but it does mean that unlike his three most recent predecessors, Biden is matching his ambitious spending goals with tax hikes that will hugely cushion the bill’s impact on the national debt.
Republicans and even some Democrats have balked at the big price tag and the tax increases. That’s a fair debate, and no wonder the massive legislation is caught on the horns of competing political and policy agendas. That’s not proof that Biden’s agenda and thus his whole presidency is on the rocks, however. It’s ordinary scrambling among elected representatives trying to hammer out that rarest of D.C. products: A compromise.
We support the big bill, and many of the tax increases, too. But we also see the value in taking a big bite at the apple now and coming back to fight over second and third courses later. For that to happen, liberal and conservative wings of the Democratic Party must find common ground. Republicans, too, could find a new vocabulary in this debate other than “no.”
Biden has already signaled he’s happy to accept a package that will cost something north of $2 trillion, which is more than the $1.5 trillion holdout Sen. Joe Manchin, D-W.Va., has said he’d support. Biden knows that three-quarters of a ham sandwich tastes like a feast when the alternative is going away hungry.
Getting to a yes will take time, and yes it will take leadership from Biden and his allies on Capitol Hill. But when Biden finally does sign the bill, even a heavily compromised version, it will be one of the biggest investments in America’s social and physical infrastructure in more than half a century.
So, what’s in it, anyway? Much that will improve people’s lives.
A $200 billion investment in universal preschool for all 3- and 4-year-olds through a national partnership with states, benefiting as many as 5 million children and saving the average family $13,000 when fully implemented.
The nation’s first federal paid and medical leave benefit. The plan would create a new federal program at a cost of $225 billion over 10 years. It would guarantee 12 weeks of publicly financed paid leave, at a minimum of two-thirds of one’s previous wages up to $4,000 a month.
A historic $2 billion investment in housing vouchers, targeted toward extremely low-income families on the verge of homelessness, bridging the gap between household incomes and the fast-rising cost of housing. The voucher program would ensure that eligible households pay no more than 30 percent of their income toward rent.
A permanent expansion of Medicaid eligibility for people who live in states such as Texas that have not expanded the program under the Affordable Care Act. This would allow up to 1.4 million Texans and 4 million uninsured people nationwide to gain access to coverage.
New polluter fees, consumer rebates for home electrification and weatherization, clean energy, manufacturing, and transportation tax incentives and grants that would go a long way toward meeting Biden’s goal of reducing carbon emissions by 50 percent and enabling the power grid to get 80 percent of its power from emission-free sources by 2030.
These are just a sampling of the bill’s essential elements that can truly improve lives. In all, the bill is about Biden keeping his word, or rather helping America keep its word, that life here will be fairer for the next generation than it has been in the past.
A big part of that push for equity is in how the president and the House Democrats have proposed to pay for this spending through tax hikes. The top marginal rate would increase from 37 percent to 39.6 percent. Individuals making more than $5 million would pay a 3 percent surtax on income over that level. The corporate tax rate would go from 21 percent to 26.5 percent, still nearly 10 percent lower than the corporate rate prior to Donald Trump’s tax cuts.
Progressives, and Biden, are right: The wealthy should pay more in taxes, and companies should not be able to so easily pay so little. And yet we count it as a win for everyone that the compromise bill will come in at a lower cost. That means some of the more controversial tax hike proposals by Democrats — such as raising the capital gains rate increase to 48 percent, which would be the second-highest rate in the world.
The bill would also increase America’s competitiveness on the global stage. The United States ranks 24th on the World Economic Forum’s “energy transition readiness” index, which measures how prepared countries are to transition toward green energy systems. We rank even lower — 35th of 37 countries — in public dollars spent on early childhood education and care, relative to gross domestic product, and dead last compared to 40 other developed countries in offering paid family leave. These are not rankings commensurate with a global superpower.
The budget bill would begin to change that narrative. There will surely be more twists and turns before the proposal reaches Biden’s desk. There will be days when machinations of a few progressive or moderate lawmakers will churn political reporters into a frenzy, and days when the razor-thin margins Democrats hold in the Senate and House appear insurmountable.
History tells us that most bills that could have seismic societal impacts chart a circuitous path. But in this case, it’s the right path.
Biden and the Democrats should remain on it.