What's in Biden's latest budget offer: Climate programs and universal preschool, but no paid leave
WASHINGTON – President Joe Biden delivered his latest offer to Congress on his plan to expand safety-net and climate change programs Thursday, the result of months of talks with lawmakers to pare down his original proposal.
The plan would provide free preschool for more than 6 million children, expand Medicare coverage to cover hearing and raise Pell grants to help offset college tuition.
But it does not include several key programs Biden and congressional progressives have been pushing for such as free community college, paid family leave, and a mechanism that would have punished utilities for not converting to clean energy sources fast enough.
The framework also would impose a minimum 15% tax on corporations and new levies on high-earning Americans. It carries a $1.85 trillion price tag over 10 years – about half the $3.5 trillion expansion he first pitched.
Still, the president touted his "framework" as an important step that will help all corners of the economy while also confronting the looming threat of a warming planet.
"The Build Back Better Act will create millions of good-paying jobs, enable more Americans to join and remain in the labor force, spur long-term growth, reduce price pressures and set the United States on course to meet its clean energy ambitions," he said.
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Here's a look at what's in Biden's latest proposal – and what got left out:
Medicare would cover hearing benefits and the government would help millions of lower- and middle-income people pay for private insurance, under the president’s framework. That was an idea pushed by Sen. Bernie Sanders, I-Vt., who had also called for expanded dental and vision benefits. Those are not included.
The deal would also extend through 2025 the enhanced premium subsidies made available in the March coronavirus relief package for people who buy insurance on their own instead of getting it through an employer or the government. Subsidies became more generous for those who already qualified for assistance, lowering both premiums and deductibles. They were made newly available to people earning more than four times the federal poverty rate – about $51,000 for a single person.
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Private plans would become available without premiums to people living below the poverty line in the 12 states that have not expanded Medicaid through the 2010 Affordable Care Act. Those states are: Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas, Wisconsin and Wyoming.
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Calling it the biggest expansion of affordable health care coverage since the ACA, the White House said millions more people will gain health insurance under those private insurance provisions. But they last only through 2025 to keep down the overall cost of the package.
The framework does not include provisions to lower the cost of prescription drugs which has been fiercely fought by the pharmaceutical industry and was a top priority of progressives.
The proposal includes $320 billion to expand tax credits over the next decade for utility and residential clean energy, clean passenger and commercial vehicles, and clean energy manufacturing.
Embedded in the proposal is Biden's call for a massive expansion of electric vehicle charging stations and other infrastructure that would help de-carbonize the single largest sector of the economy contributing to global warming.
It also includes $105 billion in "resilience" programs to ward off and prepare for extreme weather events such as wildfires and hurricanes made worse by climate change. And it creates a Civilian Climate Corps designed to deploy a force of young workers to help communities address the threat of climate change.
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Also not included: A $150 billion program central to climate change efforts that would have required electricity suppliers that do not transition fast enough to clean energy (4% increase per year) to pay a penalty. Hailing from coal country, Sen. Joe Manchin, D-W.Va., opposed the creation of the Clean Electricity Performance Program.
The framework proposal includes $100 billion for immigration reform and enhancements to the asylum process such as expanding legal representation for individuals and addressing processing backlogs.
However, details on a provision that would offer protection for undocumented immigrants have yet to be released. Senate Democrats are planning to present a plan to the Senate parliamentarian, a government official who determines whether policies qualify under reconciliation, a process Democrats are employing to pass the bill without Republican support.
Sen. Bob Menendez, D-N.J., said in an interview with Axios last week that a “Plan C” would likely be a parole option for about 8 million undocumented immigrants. Menendez said that it will allow those that meet certain requirements to work lawfully in the United States and protect them from deportation. The parole, which would last for five years and be able to be renewed for another five years, would also allow undocumented people to travel domestically and internationally, Menendez said.
Democrats have previously presented two other immigration proposals to the parliamentarian, who rejected both.
Biden’s framework includes provisions for both the youngest students and those seeking post-secondary education.
Under Biden's plan, free universal preschool would be extended to all 3- and 4-year-olds, an expansion the Biden Administration says will include more than 6 million children. That program would be funded for six years under a $400 billion line item that also includes money for expanded child care benefits.
The new framework does not include free community college, a 2020 Biden campaign promise that was part of earlier versions of the plan. Biden acknowledged last week during a televised town hall that free community college would not make the final cut as he and other Democrats negotiated over the final framework.
The proposal expands the maximum Pell grant for low-income students by $550. For the 2021-22 academic year, Pell grants ranged from $650 to $6,495, according to the National Association of Student Financial Aid Administrators.
The Biden administration said it also will invest more in historically Black colleges and universities, tribal colleges and universities and minority-serving institutions and set up community colleges to train workers and invest in registered apprenticeships. The framework bumps the Labor Department’s spending on workforce development by 50% for five years.
The White House summary of Biden’s proposed framework for a package of social programs doesn't include his proposal to provide 12 weeks of paid family leave, which disappointed some House Democrats.
Biden’s initial proposal called for $225 billion for a national program to provide paid family and medical leave for workers for three months after having a child, rehabilitating from an illness, caring for a disabled relative or dealing with a partner’s military deployment.
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That proposal called for up to $4,000 per month in paid leave for individuals who participate, with a minimum of two-thirds of average weekly wages and increasing to 80% for the lowest wage workers.
The head of the House Appropriations Committee, Rep. Rosa DeLauro, D-Conn., said members of Congress get paid time off when they are sick, but that many Americans do not.
“Isn't it unfortunate that will not be the case for the American people?” DeLauro asked.
Biden had called for increasing the top corporate tax rate from 21% to 28%. The rate had been slashed from 35% under the Trump tax bill Congress passed in 2017. This proposal abandons that plan and instead calls for a 15% minimum tax on "large corporations" that's expected to raise about $325 billion. Also included is a 1% surcharge on corporate stock buybacks.
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The framework also calls for higher taxes on U.S. companies that ship jobs overseas and on higher earning American households (those earning above $400,00 per year). It includes a new surtax on multimillionaires and billionaires though the specifics of that charge are not spelled out.
Under the current proposal, the top tax rate for corporations would jump from 21% to 26.5% on incomes beyond $5 million. Biden had originally suggested raising the corporate tax rate to 28%, but Democrats and some corporations objected.
Missing, however, is a Biden proposal to raise the top tax rate for capital gains – money earned from the sale of stocks or property – which the president had initially proposed lifting to 25% from the current 20%.
Biden’s framework proposes $150 billion for affordable housing. That includes funding for the construction and rehabilitation of more than 1 million new affordably priced rental and single-family homes; down payment assistance for first-time homebuyers; new rental assistance; and capital needs improvements for public housing. The plan also includes financial incentives to encourage states and cities to adopt local zoning changes that support new affordable housing.
The White House called the package “the single largest and most comprehensive investment in affordable housing in history.”
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But it is still less than half the $327 billion that Biden proposed for affordable housing in his original $3.5 trillion plan.
Among the most significant housing trims: Biden has cut the expansion of rental assistance from $90 billion, as originally proposed, to $25 billion; scaled back public housing improvements from $80 billion to $65 billion; and reduced funds proposed for the national Housing Trust Fund from $37 billion to $15 billion. The latter means the Housing Trust Fund would build and preserve a projected 150,000 new affordable homes as opposed to an original target of 330,000.
Biden’s framework includes $150 billion to expand home caregiving services for low-income seniors and disabled Americans through an existing Medicare program.
The plan is twofold: reduce the backlog of 800,000 eligible seniors and Americans with disabilities unable to get in-home care services and boost the pay and improve conditions for home care workers.
The White House hailed Biden’s plan as “the most transformative investment in access to home care in 40 years.” Yet Biden has scaled back plans significantly from the $400 billion proposed for home caregiving in his initial $3.5 trillion framework.
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