August 1, 2021

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Biden to unveil major new spending plans as Democrats eye bigger role for government – The Washington Post

7 min read

The forthcoming proposals reflect a broader political shift underway in Washington, where Democratic leaders have sought to capitalize on their 2020 election victories to advance once-dormant policy priorities and unwind years of budget cuts under administrations past.

But Biden’s aggressive agenda also may test his stated support for bipartisanship — after passing his $1.9 trillion stimulus plan without any Republican support — as well as the public’s willingness to embrace the sizable tax increases on wealthy families and profitable companies that may be necessary to help finance the burst in federal spending.

Biden’s push begins Wednesday, when he is scheduled to head to Pittsburgh to pitch the first part of a $3 trillion or more effort to improve the country’s roads, bridges and water systems nationwide. White House press secretary Jen Psaki said on Fox News Sunday that Biden would follow that announcement in April with a second package to include spending on social welfare programs, addressing healthcare, child care and other issues.

Democratic leaders on March 14 expressed hope for a bipartisan infrastructure package after the American Rescue Plan was signed into law. (JM Rieger/The Washington Post)

The White House this week also intends to release the early contours of its 2022 budget request to Congress. The blueprint is expected to call for a major increase in domestic spending starting next fiscal year, particularly targeting federal agencies that tackle education, climate change, housing insecurity and other longtime Democratic priorities, according to the party’s top congressional aides.

For Biden, the forthcoming infrastructure and budget proposals showcase Democrats’ broader desire to rethink the role of the federal government over the course of his presidency. Biden himself teased the transformation he seeks at an event in the Rose Garden earlier this month, linking his philosophy to the massive anti-poverty campaign waged by President Lyndon B. Johnson about six decades ago.

“It’s critical to demonstrate that government can function — can function and deliver prosperity, security, and opportunity for the people in this country,” Biden said.

But Biden’s ambitions largely rest in the hands of Congress, where Democrats maintain only a faint, sometimes politically fractious majority — and Republicans have sounded early notes of opposition to his approach.

“I’m very disappointed with what I’m reading,” Sen. Shelley Moore Capito (W.Va.), the top Republican on the chamber’s Environment and Public Works Committee, told reporters last week. While she said infrastructure reform is bipartisan, she expressed early fears that the debate may ultimately end up like the stimulus, attracting no GOP support because of the White House’s thinking on issues including social welfare.

“I think we need to talk to the American people and say, ‘Is this what you envision with infrastructure?’” Capito said. “‘Are these job creators? Are we re-engineering our own social fabric here with a 50-vote majority?’”

Senate Minority Leader Mitch McConnell (R-Ky.) on March 16 said that Republicans would not support tax increases to fund new infrastructure spending. (The Washington Post)

By proposing the new infrastructure spending separately, the Biden administration may be aiming to preserve early political support for what most agree is a pressing national priority — allowing Democrats to forge ahead later, and possibly on their own, to tackle social-welfare programs.

“Roads, railways, rebuilding them, that’s not a partisan issue. That’s a lot of what the president will talk about this Wednesday,” Psaki said Sunday.

For Democrats, the infrastructure and budget plans Biden is set to release this week reflect an emboldened party still celebrating its stimulus victory. Many top lawmakers and White House officials maintain the package, known as the American Rescue Plan, is popular with voters across the political spectrum — and they now seek to build on its passage with a flurry of longer-term legislative efforts.

“The American people know we need big, bold change,” said Senate Majority Leader Charles E. Schumer (D-N.Y.) at a recent news conference when asked about Democrats’ efforts to grow the size of government. The coronavirus “has shown the private sector can’t do it alone … and the federal government has to be a big part of it. I believe the American people want it and are ready for it.”

With it, though, Biden is likely to face a resurgence in criticism about the perils of excessive spending — and the long-term consequences of an unmanaged federal debt. Republicans in particular have sought to sound new austerity concerns in recent months, despite staying silent about the matter as Donald Trump cleaved federal revenue through tax cuts on profitable corporations and high-income earners during his term.

“It will be very dangerous for the economy if they use the justification that it was okay to borrow during the recession to continue borrowing,” said Maya MacGuineas, the president of the bipartisan Committee for a Responsible Federal Budget. She warned against “trying to invest in the next generation while simultaneously handing them the bill.”

Biden’s spending plans are expected to have two parts. The first, which the president is set to showcase its Pittsburgh, seeks to direct billions of dollars to improving roads, bridges, waterways and sewage systems, while investing in technologies including the next generation of Internet access and a wide array of clean-energy research and tools.

The infrastructure push reflects growing, bipartisan concern about the need for heightened federal investment in improving the country’s inner-workings — and the potential that such spending could create jobs and stimulate the economy. A report earlier this year from the American Society for Civil Engineers found the country faced a roughly $2.6 trillion funding gap, resulting in frequent water-main breaks, power outages and significant wear and tear on American roads.

“There is certainly a very significant need in this country,” said Tom Smith, the executive director of ASCE. “We’ve been kicking this can down the road for many years now.”

The second component, slated for April, includes social-safety-net proposals. It would extend the child tax credits authorized under the $1.9 trillion stimulus, for example, while allocating new sums toward child care, universal prekindergarten and free community college, people familiar with the plan previously told The Post. It is expected to include more subsidies for health-care plans and more aid for people of color attending historically Black colleges and universities.

Many of these proposed reforms correspond with promises that Biden and his fellow Democrats made over the course of the 2020 election. Psaki said the administration is still “working out the total package,” stressing Biden is “eager to hear ideas from both parties as well.”

But some of Biden’s agenda threatens to upend the potential for bipartisan compromise before the debate begins in earnest. That includes the president’s plans to pay for the reforms, which could include raising taxes on companies, targeting corporate profits abroad and imposing higher rates on wealthy families and investors. Biden has said his tax increases will not affect people earning less than $400,000 per year.

Infrastructure spending is separate from the president’s forthcoming 2022 budget, which the Biden administration is also set to release this week. The proposal is meant to be be a pared-back version of the more substantive funding document the White House releases annually, according to officials at the Office of Management and Budget, who say a fuller spending plan including revenue-raising measures is due later in the spring.

Democratic lawmakers say they anticipate the first Biden budget is expected to include new increases in domestic spending, as Democrats seek to rejuvenate federal agencies that have lost staff and capacity while tackling new challenges, including the coronavirus pandemic and climate change. Rep. Rosa L. DeLauro, the top Democrat on the House Appropriations Committee, said in a statement she anticipates working with the White House on “federal spending that reflects our values with investments in pressing needs such as education, health, social services, infrastructure, and environmental protection.”

For the first time in a decade, though, Congress and the White House are not constrained by across-the-board spending caps, which lawmakers imposed starting in 2011 in an attempt to reduce the deficit. Over that period, federal spending on nondefense agencies and issues including education and government services plummeted. A new report from the left-leaning Center on Budget and Policy Priorities last week found that funding for these domestic programs is 10 percent lower than it was 11 years ago, adjusted for inflation and population and excluding veterans’ medical care.

On Capitol Hill, Democrats said this week they expect the Biden administration will seek to reverse those declines starting with his budget for 2022.

“We do have considerable investments we need to make,” said Rep. John Yarmuth (D-Ky.), the chairman of the House Budget Committee, who lamented “glaring deficiencies” created because of the soon-expiring budget caps.

Like infrastructure, though, Biden could face early headaches — potentially even from his own party, Yarmuth said, particularly if the president seeks too large an increase in defense spending. Yarmuth added Republicans similarly may be less willing to deal with Biden on the budget, pointing to their opposition to the stimulus and emerging skepticism of infrastructure reform.

“The more it resembles what Biden wants to do,” he said, “the less chance Republicans will support it.”

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