Politicians and pundits from both parties are tearing into Joe Biden’s massive spending proposals as questions arise over how the president plans to pay for it all.
‘The words of this speech sounded like what you would hear from a 15-year-old if you gave him a credit card with no credit limit on it,’ former New Jersey Governor Chris Christie said Wednesday night during a discussion on ABC News.
‘Except the words came out of the mouth of an adult who should know better,’ the Republican added.
Biden unveiled in his first address to a joint session of Congress Wednesday evening yet another multi-trillion-dollar plan – this time aimed at ‘human infrastructure’ or economic and social welfare plans.
His American Rescue, Jobs and Family Plans could cost a combined $6 trillion – and only $1.9 trillion has been approved by Congress.
Senator Joe Manchin, a centrist Democrat who could derail any Biden proposal, said he isn’t super ‘comfortable’ with the price tag of Biden’s new plan.
‘It’s a lot of money, a lot of money,’ the West Virginia senator told reporters on Capitol Hill after the speech. ‘That makes you very uncomfortable.’
‘We’re at $28.2 trillion now, debt, so you have to be very careful. There’s a balance to be had here,’ Manchin continued.
‘Are we going to be able to be competitive and be able to pay for what we need in the country?’ he said. ‘We’ve got to figure out what our needs are and maybe make some adjustments. Who knows?’
Biden brought the total new spending commitments announced in his first 100 days in office to $6 trillion on Wednesday – but he’s facing questions over whether tax rises he proposes will be enough to cover the ambitious plans he needs to put through Congress.
Chris Christie said Joe Biden’s spending proposals are like ‘what you would hear from a 15-year-old if you gave him a credit card with no credit limit on it’
During President Biden’s first speech to a joint session of Congress Wednesday, he proposed trillions more in spending
Speaking to 200 lawmakers in Congress, Biden set out plans for his $2.3 trillion ‘American Jobs Plan’ that he called ‘a blue-collar blueprint to build America’. It joins the American Rescue Plan and the American Families Plan, at a time when national debt is at its highest level since 1945.
The $1.9 trillion American Rescue Plan that gave aid to American citizens amidst the coronavirus pandemic has passed Congress and is already covered through federal spending.
The $2.3 trillion American Jobs Plan and the $1.8 trillion American Families Plan he has proposed will cost a total of $4.1 trillion, still needs Congressional approval and Republicans have demanded negotiation to lower the costs.
In order to pay for those two plans, the president announced a series of tax initiatives including almost doubling capital gains to 39.6 percent and hiking the rate for the top one 1 percent of income earners to 38.6 percent.
He would also push corporate tax rates from 21 percent to 28 percent, impose a global minimum tax on corporations and will give the IRS $80 billion to chase town tax evaders – which he says will generate $700 billion in net revenue over 10 years.
Republican Wyoming Senator John Barasso called the ‘radical’ spending by Biden and the left-wing ‘dangerous’ and ‘scary.’
Even Democrats are weary of where the money is coming from.
‘We’re probably going to have some work to do in our own caucus,’ Pennsylvania Senator Bob Casey said. ‘I think we’re still a ways away from that. I don’t think there’s a 50-vote consensus yet.’
‘In some ways we’re negotiating against ourselves,’ he added. ‘I don’t think it’s our job just so we can say, ‘Well, that piece over there was bipartisan,’ and wait for the pat on the back.’
Former White House economic adviser Steven Rattner, who worked for Barack Obama when he was president, warned against Biden’s ‘massive’ spending plans.
Even Democrats have expressed concern over how the $6 trillion in proposals will be paid for. Centrist Joe Manchin said he is ‘very uncomfortable’ with it
Former Obama White House economic adviser Steven Rattner told MSNBC there is a ‘high potential for mistakes’ and ‘failure’
COULD BIDEN OVERHEAT THE ECONOMY AND SEND INFLATION SOARING?
President Joe Biden ‘s plan for a $6 trillion spending spree could risk overheating a US economy that is already rebounding from the COVID-19 pandemic and send inflation spiraling out of control.
Biden has announced three major tax and spending proposals that he argues will boost the economy, including the $1.9 trillion American Rescue Plan to give COVID-19 aid that already passed in the Senate .
He also laid out plans Wednesday night for a $2.3 trillion American Jobs Plan and an American Families Plan worth $1.8 trillion at a time when national debt is at its highest level in 76 years.
The Biden Administration argues its spending spree can boost the economy without negative side effects, but economists – both liberal and conservative – are warning it’s a gamble.
Many argue the already surging economy is now expected to expand so fast that it could ignite inflation, which is the measure of price increases of goods, like food and gasoline.
Federal Reserve Chair Jerome Powell has already insisted that he can keep inflation under control and said any surge will be temporary.
But some economists warn the price tag will be high if the Biden administration and Fed are wrong.
Biden says it’s time for the ultra-rich to ‘pay their fair share’
‘A major problem with Biden’s budget policy is that it could soon lead to an overheating of the US economy and a return to higher inflation,’ Desmond Lachman, a resident fellow at the American Enterprise Institute, said in a statement to
Sung Won Sohn, an economics expert at Loyola Marymount University, told the Washington Post : ‘The philosophy behind the Biden administration is everyone can have more. We can have the cake and eat it, too. There is no price to pay in terms of inflation, higher interest rates or slower growth.
‘If they are wrong, the price tag will be pretty high.’
Biden’s plans, which would see tax hikes for the rich and corporations in order to pay for it, will provide a significant boost for lower-income Americans.
There are concerns, however, that such a large stimulus will cause the economy to overheat and result in rapid price increases.
‘Sure, I worry about inflation,’ Rattner told MSNBC’s ‘Morning Joe’ Thursday. ‘Sure, I worry about the deficit and the debt. But I also worry about the execution job here.’
‘This is a massive execution job,’ Rattner said. ‘The last plan, the jobs plan alone, had 76 different initiatives in it. All have to be created and executed.’
‘The potential for mistakes, failure of execution here is high.’
‘And if it fails,’ he continued, ‘I think it will set back the cause of progressivism for several more decades,’ he added. ‘Getting it executed, I think, in some ways, is going to be the president’s biggest challenge. He’s got to deliver, not just passage, but actual real results for Americans, and programs that people perceive are working or else we go back to government being the income again.’
According to experts at The Tax Foundation, Biden’s tax increases announced in Congress on Wednesday would raise an estimated $2.37 trillion.
Their analysis of Biden’s taxation plans in full project that his planned taxes will raise a total of $3.3 billion – however this is subject to many factors including the performance of the economy.
Biden also intends to crack down on multinationals, forcing US firms that make money overseas and companies who use offshore businesses to pay significantly more in taxes under his ‘Made in America’ tax plan.
The looming gap between Biden’s spending ambitions and the projected tax revenues raises the prospect that the President could resort to further borrowing to cover his spending.
Republicans widely panned the speech on Wednesday as ‘boring’ and a list of ‘socialist dreams’.
In the GOP’s rebuttal to Biden’s speech, Senator Tim Scott belittled the new president’s initial priorities – aimed at combating the deadly virus and spurring the economy – as wasteful expansions of big government.
‘We should be expanding options and opportunities for all families,’ Scott said. ‘Our best future won’t come from Washington schemes or socialist dreams.’
The national debt currently stands at around $28 trillion, 100 percent of GDP and the highest it has been since 1945; and on track to reach 107 percent by 2031, not factoring in Biden’s proposed 10-year spending.
Under Biden’s predecessor Donald Trump, America’s national debt rose by $7.8 trillion, and was rising even before the coronavirus pandemic forced the need for economic injection.
But unlike Biden, Trump was often more reluctant to pass spending bills, and in contrast to Biden’s tax proposals, the former president introduced sweeping tax cuts under the Tax Cuts and Jobs Act of 2017.
The American Jobs Plan: $2.3 trillion
The ‘Made in America’ tax plan falls under the The American Jobs Plan, that if passed will see $2.3 trillion spent on improving America’s ageing infrastructures, including its roads, bridges, rail lines and utilities, as well as huge spending on R&D.
The plan includes a raise in corporation tax – from 21 percent to 28 percent – and a substantial increase in tax on the activities of U.S. multinational corporations, both locally and abroad.
Biden unveiled sweeping tax hikes Wednesday night as part of his administration’s proposal to raise $6 trillion for his three plans; The American Rescue Plan, The American Jobs Plan and The American Families Plan
Ahead of Biden’s address on Wednesday, the New York Times reported that the spending plan is so large, that 15 years of higher corporate taxes will be required to cover around eight years of spending.
Part of that spending will include a huge $621bn for transportation projects as well as funds going towards improving drinking water, infrastructure, expanding broadband, maintaining electrical grids and elderly care.
The Tax Foundation estimates that if passed at 28 percent, the new corporate tax rate could raise around $886.3 billion between 2022 and 2031, before factoring in potential reduced economic output.
The foundation also estimates that Biden’s proposed 15 percent minimum book tax would raise about $202.7 billion in additional revenue from 2021 to 2030.
Furthermore, it predicts that the proposed increase on U.S. multinational’s tax liabilities would see them pay an additional $104 billion in 2022, and $1.2 trillion over 10 years, and would increase the tax burden on the foreign operations of multinationals by more than $714 billion over the next decade.
However, in its conclusion of its assessment of Biden’s proposed corporation tax increase, The Tax Foundation said: ‘Raising the U.S. corporate income tax rate would erode America’s international tax competitiveness, giving us the highest combined corporate tax rate in the OECD.
‘Such a relatively high corporate tax rate would encourage profit shifting abroad and otherwise out of the U.S. corporate sector.’
Addressing Congress and those watching, Biden told his audience: ‘I know some of you at home are wondering whether these jobs are for you. You feel left behind and forgotten in an economy that´s rapidly changing. Let me speak directly to you.
‘Independent experts estimate the American Jobs Plan will add millions of jobs and trillions of dollars in economic growth for years to come. These are good-paying jobs that can’t be outsourced. Nearly 90% of the infrastructure jobs created in the American Jobs Plan do not require a college degree. 75% do not require an associate´s degree.
‘The American Jobs Plan is a blue-collar blueprint to build America. And, it recognizes something I’ve always said. Wall Street didn´t build this country. The middle class built this country. And unions build the middle class.’
The American Rescue Plan, worth $1.9 trillion, has already passed the senate in a 50-49 party-lines vote held in March. The American Jobs Plan worth around $2.3 trillion and the The American Families Plan worth $1.8 trillion take the combined total of Biden’s three plans to $6 trillion, that will be spent over roughly 10 years. Pictured: President Biden addresses Congress
The American Families Plan: $1.8 trillion
Having beat back progressive primary challengers and pushed major government interventions in the economy through taxes and spending, Biden put a focus on the wealthy and demanded measures to bring more economic equality in his speech.
Funds for the $1.8 trillion American Families Plan – in which Biden has proposed $1 trillion worth of new spending and $800 billion in tax credits – will also be raised through taxation.
However, The Committee for a Responsible Federal Budget predicts the tax increases under the American Families Plan will see $1.5 billion raised in total through tax hikes, leaving a $300 billion deficit after the $1.8 billion spending over 10 years.
Under the plan, the IRS’ funding would be increased, and marginal income tax for top 1 percent and capital gains and dividend tax rates for those earning over $1 million per year would also be raised.
The plan would see $506 billion spent on education, including free, universal pre-kindergarten for all three- and four-year-olds, as well as two free years of community college tuition for all Americans.
A further $495 billion would e spent on families and children, including subsidized child-care, paid family medical leave program, and $855 billion on expanded tax credit extensions, including the extending the child Tax Credit expansions from the American Rescue Plan through 2025 and permanently make the Child Tax Credit fully refundable.
In order to raise the funding, the proposal would see $80 billion in enhancements to the Internal Revenue Service (IRS) which could raise $700 billion from tax evaders, according to estimates made by the White House.
It would also raise marginal income tax for top 1 percent of earners, or those earning over around $400,000, to 38.6 percent – from the current rate of 37 percent.
‘That’s where it was when George W. Bush became president,’ Biden said referring to the current rate, after bashing the ‘big tax cut of 2017’ enacted under Trump. ‘It was supposed to pay for itself and generate vast economic growth. Instead it added $2 trillion to the deficit,’ he said.
‘We’re going to get rid of the loopholes that allow Americans who make more than $1 million a year pay a lower rate on their capital gains than working Americans pay on their work,’ Biden said.
‘This will only affect three tenths of 1% of all Americans. And the IRS will crack down on millionaires and billionaires who cheat on their taxes,’ he added.
Biden unveiled on Wednesday a massive capital gains increase. California, New York, New Jersey, Minnesota and Oregon would have the highest top capital gains rates
Capital gains and dividend tax rates for those earning over $1 million per year would also be increased from the current 23.8 percent to 39.6 percent, with an effective rate of 43.4 percent when the Medicare surcharge is added.
For those earning more than $1 million in high-tax states, the total rate will be even higher given the combined federal and state tax capital gains. In New York it could be as high as 52.22 percent and for Californians it could be 56.7 percent.
Biden has still vowed that no one earning under $400,000 a year will pay more taxes under his administration.
Analysis of Biden’s tax plans during his 2020 campaign from The Tax Foundation suggested his plans would raise $3.3 trillion over the next decade.
The remaining funding will have to come from sources that are yet to be announced, through cutting spending elsewhere, or added to the national debt.
Republicans slam Biden’s speech as a ‘boring, socialist dream’
Republicans widely panned the speech on Wednesday as ‘boring’ and a list of ‘socialist dreams’.
GOP Senator Tim Scott said in his party’s rebuttal that the president was ‘pulling the country apart’ instead of promoting unity, that his remarks were ‘full of empty platitudes’, and belittled the new president’s initial priorities – aimed at combating the deadly virus and spurring the economy – as wasteful expansions of big government.
‘We should be expanding options and opportunities for all families,’ said Scott, who preached a message of optimism while remaining a loyal supporter of former President Donald Trump, ‘not throwing money at certain issues because Democrats think they know best.’
Citing the partisan battle over Biden’s $1.9 trillion COVID-19 relief bill, which Congress approved over unanimous GOP opposition, Scott said: ‘We need policies and progress that bring us closer together. But three months in, the actions of the president and his party are pulling us further apart.’
South Carolina Republican Sen. Tim Scott delivered his party’s response to President Joe Biden’s first address before Congress
Biden’s address came three months into a presidency that’s seen Republicans repeatedly accuse him of abandoning his campaign pledge to seek bipartisan compromises. While Biden cited a rosy roster of accomplishments and goals in his own speech – ‘America is on the move again,’ he said – Scott said it was Republicans who had bolstered the economy and began to tame the pandemic.
‘This should be a joyful springtime for our nation,’ said Scott, citing the Trump administration’s role in helping spur vaccine development and beginning a revival of the staggered economy. ‘This administration inherited a tide that had already turned. The coronavirus is on the run!’
The address also came as Scott, a 10-year veteran of Congress who usually keeps a low profile, has found a spotlight leading his party in a bipartisan effort to overhaul police procedures. That drive was prompted by last May’s slaying of George Floyd, a Black man, and energized anew by this month’s conviction of a white former Minneapolis police officer for the killing.
‘I’m still working. I’m still hopeful,’ he said of the talks.
Scott criticized many school systems’ decisions to halt or limit in-person classes during the pandemic as a safety measure. Those closures, which were recommended by public health officials, have drawn fire from Republicans as an overreaction and become part of the GOP’s culture war with Democrats.
‘Locking vulnerable kids out of the classroom is locking adults out of their future,’ Scott said.
Scott cited low unemployment rates for minorities before the pandemic struck last year, calling it ‘the most inclusive economy in my lifetime.’ And he praised GOP efforts including tax breaks to encourage business investments in low-income communities.
‘Our best future won’t come from Washington schemes or socialist dreams,’ he said, echoing the GOP’s oft-repeated theme that Democrats are pushing far-left plans. ‘It will come from you – the American people.’
Scott has long embraced themes of opportunity and a cheerful optimism that were conservative calling cards during the Reagan era. He retold the story of a grandfather who left grade school to pick cotton and led a lifetime of illiteracy, his own childhood living in a single bedroom with his single mother and brother and nearly failing out of high school.
Scott said his family went ‘from cotton to Congress in one lifetime. So I am more than hopeful – I am confident – that our finest hour is yet to come.’
Those messages could make Scott a positive messenger for the GOP in what could otherwise be a divisive 2022 election campaign, when the party has high hopes of winning control of the House and perhaps the Senate. Scott is strongly favored to be reelected next year.
Over the years, Scott at times called out Trump in measured tones over some of his racially offensive broadsides. Yet he’s remained a strong supporter of the former president and opposed Trump’s removal from office after the House impeached him for inciting the Jan. 6 attack on the Capitol.
Jobs, the case for big government and NO mention of Trump: The key takeaways from Biden’s speech
President Joe Biden on Wednesday returned to the U.S. Capitol, his home for more than three decades, and used his first address to Congress to make the case that the era of big government is back.
He said the U.S. is ‘on the move again’ after struggling through a devastating pandemic that killed more than 570,000 Americans, disrupted the economy and shook daily life. And he pitched an expansive – and expensive – vision to rebuild the nation´s roads, bridges, water pipes and other infrastructure, bolster public education and extend a wide swath of other benefits.
Here are some key takeaways from the president´s address:
BIDEN’S FOUR-LETTER WORD: JOBS
Biden uttered the word ‘jobs’ a whopping 43 times.
It´s perhaps no surprise for an administration that has made beating back the pandemic and getting Americans back to work the central guideposts for success.
Biden noted that the economy has gained some 1.3 million new jobs in the first few months of his administration – more than any in the first 100 days of any presidency. But he quickly pivoted to the need to pass his American Jobs Plan if the country is going to sustain momentum and get back to the historic low levels of unemployment before the pandemic.
He also aimed to frame his push for the U.S. to meet its international obligations to slow the impact of climate change as, ultimately, a jobs plan.
‘For too long, we have failed to use the most important word when it comes to meeting the climate crisis,’ Biden said. ‘Jobs. Jobs. For me, when I think about climate change, I think jobs.’
WHO TURNED THE TIDE?
Biden said ‘America’s house was on fire’ when he took office, citing the devastating COVID-19 pandemic, its damaging economic impact and the Jan. 6 insurrection at the Capitol.
‘Now – after just 100 days – I can report to the nation: America is on the move again,’ Biden said, adding that the U.S. is now ‘turning peril into possibility. Crisis into opportunity. Setback into strength.’
It´s a tried and true strategy by the president to take credit for the more hopeful moment, as the coronavirus vaccines have provided a path out of the pandemic.
Republicans, meanwhile, made it clear they see things differently, with Sen. Tim Scott, R-S.C., implicitly crediting former President Donald Trump for Biden´s good fortune.
‘This administration inherited a tide that had already turned,’ he said in the official GOP response to Biden´s address.
From polling, it´s clear Biden´s view is winning the day – at least so far – with more Americans approving of his job performance than ever did of Trump, with strong marks even from Republicans for handling the pandemic.
MAKING THE CASE FOR BIG GOVERNMENT
In the past, presidents from both parties used similar speeches to talk about the limits of government. Biden went in the opposite direction, offering a resounding embrace of the role Washington can play in improving lives.
The president ticked off details of some of his plan for $1.8 trillion in spending to expand preschool, create a national family and medical leave program, distribute child care subsidies and more.
The plan comes on top of his proposal for $2.3 trillion in spending to rebuild roads and bridges, expand broadband access and launch other infrastructure projects.
Republicans have shown little interest in Biden´s spending plan. Senate Minority Leader Mitch McConnell has argued that Biden´s plans are a ‘Trojan horse’ that will lead to middle-class tax hikes.
But Biden and his aides say all of this new spending is a wise investment in Americans – and doable at a time of low interest rates. Much of it can be paid through raising taxes on the wealthy and would go a long way toward addressing the frailties of life for the middle class and working poor exposed by the pandemic, Biden argues.
‘I’m not out to punish anyone,’ Biden said. ‘But I will not add to the tax burden of the middle class of this country.’
While achieving bipartisan backing for the proposals is a long shot, Biden seems to be betting he can win support across the electorate.
He even made a thinly veiled pitch to blue-collar and non-college-educated white men who voted for Trump in November, noting that 90% of the infrastructure jobs that will be created by his spending plans don´t require a college degree and 75% don´t require an associate´s degree.
‘The Americans Jobs Plan is a blue-collar blueprint to build America,’ Biden said. ‘And it recognizes something I´ve always said: Wall Street didn´t build this country. The middle class built this country. And unions built the middle class.’
‘REAL´ RACIAL JUSTICE
A week after former Minneapolis police officer Derek Chauvin was convicted in the killing of George Floyd, and as the nation continues to grapple with a disproportionate number of Black men being killed by police, Biden called on Congress to meet the moment.
‘We have all seen the knee of injustice on the neck of Black America,’ Biden said, referencing Floyd´s death under Chauvin’s knee. ‘Now is our opportunity to make real progress.’
Biden, who won the presidency with strong support from Black voters, called on Congress to send him a police reform bill named after Floyd by the anniversary of his death, May 25. But he also went further, saying he aimed to root out systemic racism in housing, education and public health.
‘We have a giant opportunity to bend the arc of the moral universe toward justice,’ said Biden. ‘Real justice.’
PRESSING GOP ON GUNS, IMMIGRATION AND VOTING RIGHTS
Biden was elected on the promise of delivering action on gun control, immigration reform and voting rights protections, but even he seemed muted about the prospects for action on these priorities.
Biden spoke in emotional terms about gun violence and appealed to Republicans who have expressed support for providing a path to citizenship for people brought to the U.S. illegally as children.
‘The country supports it,’ Biden said repeatedly. ‘Congress should act.’
The issues were too important to the Democratic base to leave out. But they face stiff opposition among the GOP in the Senate, where 10 Republicans would have to join with Democrats to overcome a filibuster.
`WE HAVE TO PROVE DEMOCRACY STILL WORKS´
Biden said that while the nation´s democracy survived the deadly Jan. 6 insurrection at the Capitol meant to block the certification of his election, leaders in Washington must do more to boost the resilience of the nation´s system of government.
Biden argued that the nation´s adversaries ‘look at the images of the mob that assaulted this Capitol as proof that the sun is setting on American democracy.’
‘We have to prove them wrong,’ he said. ‘We have to prove democracy still works. That our government still works – and can deliver for the people.’
It was a familiar refrain for Biden, who has sounded an alarm about the nation´s divisions for years, but the urgency spiked after Jan 6.
Still, the appeal for unity appeared unlikely to sway many minds in Congress. Republicans have already lined up in opposition to Biden’s agenda, and the push for a bipartisan commission to probe the insurrection has struggled to gain support.
Biden campaigned on a promise to substantively and stylistically move the country past Trump, and in keeping with that tone, he made no direct mention of the 45th president.
Instead, he spoke only of the ‘last administration,’ blaming Trump and his team for abandoning an effort made by his old boss – Barack Obama – to financially assist the Northern Triangle nations in Central America. Migrants are now fleeing from those countries – El Salvador, Guatemala and Honduras – and arriving at the U.S. border.
In some ways, the absence of talk about Trump, who still falsely claims the election was stolen from him, isn´t surprising. Biden grumbled at a CNN town hall in February that he´s ‘tired of talking about Trump’ and he wants to make the next four years about the American people.
His omission made clear he´s determined to move on.
– Associated Press