Biden Team Prepares $3 Trillion in New Spending for the Economy

Whether it can muster Republican support depends in large part on how the bill is paid.

Officials have discussed offsetting part or all of infrastructure spending through corporate tax increases, including a 21 percent increase in the corporate tax rate and a series of measures to force multinational corporations to pay more taxes in the U.S. on income they earn abroad to earn. This strategy is unlikely to win Republican votes.

“I don’t think we’re going to get excited about a tax hike,” Kentucky Senator Mitch McConnell, the Republican leader, told reporters last week. He predicted the administration’s infrastructure plan would be a “Trojan horse” for tax hikes.

The total price of the package could approach $ 4 trillion as it includes several tax incentives such as loans designed to help families afford childcare and promote energy efficiency in existing buildings. It could also extend temporary poverty alleviation tax cuts, which officials estimate could add hundreds of billions of dollars to the proposal.

Mr Biden supports all of the individual spending and tax proposals under consideration, but it is unclear whether he will split his agenda back into pieces or what legislative strategy he and the Democratic leaders will pursue to maximize the chances of moving the effort forward through Congress .

His advisors have discussed the merits of compromising aggressively with Republicans and business leaders on an infrastructure package that would most likely have to drop or scale back plans to raise corporate taxes. Another way would be to put the comprehensive bill through a special parliamentary process that only requires democratic votes, as Mr Biden did with the stimulus package.

“President Biden and his team are considering a number of potential options for investing in working families and reforming our tax laws to reward work, not wealth,” said Jen Psaki, White House press secretary. “These talks are ongoing, so speculation about future economic proposals is premature and does not reflect the thinking of the White House.”

Mr Biden said in January that his auxiliary bill would be followed by a “Build Back Better Recovery Plan” that would include investments in infrastructure, manufacturing, clean energy, skills and other areas.

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