Scoop: Biden plans to ask Congress to pay for $1.8 trillion in new spending
President Biden plans to ask Congress to pay for the entirety of the $1.8 trillion in new spending on health care, child care and education he’ll unveil on Wednesday night, people familiar with the matter tell Axios.
Why it matters: Biden’s decision to fully offset both the $2.25 trillion American Jobs Plan he announced last month, and the $1.8 trillion American Families Plan being rolled out in his joint address, all but guarantee big political battles on both the spending and tax sides of the combined $4 trillion proposal.
- To pay for the second package, Biden will zero in on a series of tax increases for the rich, including increasing the top marginal rate and nearly doubling the capital gains rate.
- He'll also draw on some of the corporate tax increases he announced last month to pay for a portion of the $1.8 trillion plan, as the individual tax increases won't cover the entire proposal.
- Biden will pledge not to raise taxes on households making less than $400,000.
- Biden doesn't plan to increase the rate, or lower the exemptions, on estate taxes, like he vowed to do during the campaign, according to Bloomberg News.
- To claim the plans are offset, the White House will count increased revenue over a 15-year window to pay for the $4 trillion in spending, most of which they will do in eight years, the people tell Axios.
The big picture: Biden will use his first address to Congress to take stock of his first 100 days in office. He'll also make the case for the additional spending he previewed during the campaign as part of his Build Back Better agenda.
- He's already signed $1.9 trillion in pandemic relief, which passed Congress on a purely party line vote in March.
- In total, Biden will have asked Congress for approximately $6 trillion in new spending, outside of his annual budget request.
Go deeper: The American Families Plan will offer another four years of free education, with two for preschool education before kindergarten and another two years for community college.
- The president also will propose more money for Pell Grants, and lowering tuition at some colleges, including historically Black colleges and universities.
- In addition, he plans to increase paid family leave and extend the Child Tax Credit.
- Finally, Biden wants to make permanent the temporary tax credits for health insurance in Obamacare exchanges that were part of the American Rescue Plan, Axios has learned.
Editor's note: This article has been updated to include President Biden's plans on estate taxes.