President Biden’s releases $1.75 trillion spending plan

• The current framework is way smaller than President Biden’s original $3.5 trillion proposal

• An additional $100 billion has been kept aside to reduce immigration backlogs and speed up asylum processing

President Joe Biden unveiled his $1.75 trillion framework for his signature climate and social spending bill to House Speaker Nancy Pelosi, D-Calif., and a room full of Democrats.

President Biden released his spending plan in a closed-door meeting in the basement of the Capitol on Thursday morning. 

The latest framework is extremely detailed but would still require a lot of effort to win over key congressional holdouts. “I know we have a historic economic framework. I’ll have more to say after I return from the critical meetings in Europe this week,” Biden said in remarks at the White House.

Outlining the key points

The current framework is way smaller than President Biden’s original $3.5 trillion proposal. Despite that, it contains a wide-ranging set of programs that aim to impact the lives of families with children, low-income Americans, and the renewable energy economy, if brought into action. 

These include -

• Universal preschool for all 3- and 4-year olds, which is funded for at least 6 years.

• Subsidized child care that caps what parents pay at 7% of their income, which is funded for 6 years.

• A one-year extension of the current expanded Child Tax Credit, which impacts approximately 35 million households nationwide.

• Expanded tax credits for 10 years for utility and residential clean energy, including electric vehicles.

• Extend the current, pandemic-related Affordable Care Act subsidies for 4 years.

• Allow Medicare to cover the cost of hearing.

Sourcing the capital

Along with the $1.75 trillion, which is the total cost of the program, an additional $100 billion has been kept aside to reduce immigration backlogs and speed up asylum processing. The Senate Parliamentarian, who is the Senate’s nonpartisan rule maker, needs to approve this extra amount. 

The Senate Parliamentarian has rejected the attempts made by the Democrats to include immigration language in a budget bill, twice.

If the bill is approved, it will impose a 15% minimum tax on corporate profits by large corporations, and adopt the 15% minimum global tax brokered by Treasury Secretary Janet Yellen.

It would also apply a 5% surtax rate on individual income above $10 million, which would rise another 3% on income above $25 million. 

A 1% surcharge on corporate stock buybacks would also be applicable.

Mixed reactions

The bill evoked a mixed response from key members. Ahead of the meeting, Progressive Caucus chair Rep. Pramila Jayapal (D-Wash.), told reporters that she intended to stick with her position.

"What we said consistently is that we want to see what's actually in the bill. We want to see the legislative text. And then assuming that we're fine with that we'll vote both bills through at the same time," she said.

A program to create a federal paid family and medical leave system was dropped from the bill after Sen. Joe Manchin (D-W.Va.), a key Democratic swing vote, said he did not believe it belonged in the bill.

Another program to create free community college and measures to lower the cost of prescription drugs were also dropped from the bill.

CNBC reported that this has infuriated House and Senate progressives, and Bernie Sanders told reporters on Thursday that “it needs to be improved.”

“What we have to do now is, first of all, make sure that before the [infrastructure bill] vote takes place in the House, to make sure that there is a very explicit legislative language” on the social spending plan, he said.

ALSO READ: U.S. records $2.77 trillion budget deficit for 2021, second-biggest ever

(Inputs from CNBC)