Washington (AP) – US President Joe Biden is proposing an extension of Social Security benefits to provide more support for families and to cover a greater share of educational costs for children and students.
The plan would cost about $ 1.8 trillion in ten years and should be funded by tax increases and more consistent duty collection, the White House said on Tuesday evening. Biden wants to present the plans Wednesday evening (local time; Thursday 3:00 a.m. CEST) in his first speech before both houses of the United States Congress.
According to the information, Biden proposes investing about $ 1 trillion and $ 800 billion in tax breaks for families. Among other things, he wants to fund two years of nursery school for three and four-year-olds with about $ 200 billion. There is growing scientific evidence that 13 years of school is not enough “to prepare students for success in today’s economy,” the White House said. It is therefore essential to enable children from all walks of life to attend kindergarten.
The US government also wants to invest around $ 109 billion to offer free two years of basic study at so-called community colleges, which will allow for cheaper university education. Existing exchanges will be expanded by an additional $ 85 billion. In addition, Biden wants to expand the tax-free child benefit and, depending on the income, also help with the costs of childcare.
Paid sick days and up to three months of maternity leave should also become the norm in the US. In caring for family members, the right to twelve weeks per year should increase after ten years, the White House explained. These three program points alone are expected to cost around EUR 225 billion within a decade.
Biden’s proposal requires Congressional approval. His Democrats have a sufficient majority in the House of Representatives, but in the Senate they call on dissenters among the Republicans for many projects. With some proposals, Biden could also face rejection from individual moderate Democrats in the Senate. It is therefore still unclear which points from his ‘American family plan’ could be implemented when.
The president has promised his constituents that taxpayers with annual incomes less than $ 400,000 will not have to pay higher taxes. To fund his plan, he wants to raise the top tax rate from 37 percent to 39.6 percent – effectively undoing a tax cut implemented in 2017 by his predecessor Donald Trump. In addition, Biden wants to give the IRS additional resources to further investigate companies and income millionaires. To this end, he wants to oblige banks to automatically inform the tax authorities about assets and capital income. “All told, this plan would bring in $ 700 billion in ten years,” he said.
For Biden, who hit the symbolic milestone of his first 100 days in office on Thursday, the family plan is already the third trillion program: in early March, his Democrats in Congress had an economic stimulus package of about $ 1.9 trillion thanks to the corona crisis – and In early April, Biden then proposed a massive investment package of about $ 2 trillion over the next eight years to renew the country’s infrastructure and create millions of jobs. It is still unclear whether, when and to what extent the infrastructure package could be determined by the congress.
The White House was said to have the infrastructure package and family plan with the proposed counter-financing to remain cost neutral for 15 years. In addition, it would increase productivity and economic growth, and therefore budget deficits would decrease in the long run, the White House promised.