Pres. Biden To Propose $200B Investment For Free Preschool
WASHINGTON (AP) — President Joe Biden will call for free preschool for all three- and four-year-old children, a $200 billion investment to be rolled out as part of his sweeping American Families Plan being unveiled Wednesday in a joint address to Congress.
The administration said the historic investment would benefit 5 million children and save the average family $13,000. It calls for providing federal funds to help the states offer preschool, with teachers and other employees earning $15 an hour.
“These investments will give American children a head start and pave the way for the best-educated generation in U.S. history,” the administration said.
The new details are part of Biden’s $1 trillion-plus package focused on so-called human infrastructure — child care, health care, education and other core aspects of the household architecture that undergird everyday life for countless Americans. It would be paid for by hiking taxes on very high-income households, in keeping with the president’s vow not to raise taxes on those making less than $400,000 a year.
Before Wednesday night’s address, with details of the plan still in flux, lawmakers have been pushing to make sure key priorities are included in this next phase of Biden’s massive infrastructure reinvestment program.
A group of leading centrist and progressive Democrats is meeting late Tuesday with the White House to discuss its priority of making permanent the Child Tax Credit, which was increased to as much as $300 a month as part of a COVID-19 relief package. Right now, that benefit expires in 2022 and Biden has suggested extending it to 2025.
“We continue to push,” Sen. Sherrod Brown, D-Ohio, the chairman of the Banking Committee and advocate for a permanent child tax credit, said late Monday evening. “We’re hopeful. We want it to be permanent because it’s so important for so many people’s lives.”
The president’s speech and the rollout of the American Families Plan come as Biden is marking his first 100 days in the White House, a rare moment for congressional action. Democrats narrowly control the House and Senate, giving the president’s party the full sweep of power for the first time in a decade.
While Biden is determined to reach out for bipartisanship, Republicans in Congress have largely panned his proposals as big government spending and vowed to oppose them. Biden’s Democratic allies in Congress are just as determined to ensure they seize this rare alignment of political power to deliver on long-sought priorities.
Administration officials said Monday that details of the proposal were yet to be finalized. But the package builds on Biden’s proposed $2.3 trillion American Jobs Plan, a massive investment in infrastructure that goes beyond roads and bridges to include veterans hospitals, child care centers and other developments.
The White House has portrayed its plan as a Robin Hood-style effort to tax the rich in order to spend on benefits for the middle class and poor.
It’s an argument that the hundreds of billions of dollars controlled by the wealthiest sliver of the country would lead to better results for the country if they were distributed instead to families.
In addition to extending an expanded child tax credit through 2025, giving parents monthly payments of at least $250 per child, it would provide free community college and paid family leave, among other benefits.
Funding the initiative would be a tax increase on the extremely rich, most notably a near doubling of the capital gains tax rate on incomes above $1 million to 39.6%.
Similarly, the top income tax bracket for those households earning beyond $400,000 is expected to revert to 39.6%, according to a Democratic aide granted anonymity to discuss the planning. That had been the top rate before the 2017 GOP tax overhaul approved by Donald Trump.
Initial reports of an increase in capital gains taxes triggered a stock market sell-off last week. But Brian Deese, director of the White House National Economic Council, tried to assuage voters Monday by saying just a fraction of the country would be paying more.
At a White House briefing, Deese said that only the top 0.3% of taxpayers would owe more. Out of 1,000 taxpayers, that means three would be subject to the higher tax on capital gains — which reflect the profits from a sale of an asset such as a stock or house.
Because capital gains are taxed at a peak rate of 20% now, wealthier individuals who earn most of their income through the financial markets can often pay a lower tax rate than people who think of themselves as middle class and live off their salary.
“We believe that it’s not only fair, but it would also help to reduce the kinds of tax avoidance that significantly undermines trust and fairness in the tax code itself,” Deese said. “The revenue from this provision would help invest directly in our kids and our families and our future economic competitiveness.”
Republican leaders have said they are unwilling to undo the 2017 tax law, their signature achievement of the Trump presidency, to pay for what they view as big spending by Democrats.
No Republicans voted for Biden’s coronavirus rescue plan, which was signed into law last month. Last week, Republican senators proposed an alternative infrastructure plan focused on more traditional highway and bridge investments that would be one-fourth the cost, paid for by tolls and other user fees.
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