Biden signs bill to keep government open in PRIVATE amid effort to get party behind spending plans

The text of the Build Back Better Act, released by Democrats on the House Budget Committee over the weekend, for the first time reveals how President Biden’s allies plan to spend a whopping $3.5 trillion.

Critics have already seized on one of its most controversial measures: An extra $79 billion for the Internal Revenue Service over the next decade to expand audits and strengthen enforcement.

There are also a number of welfare, social and climate provisions contained in the 2,465 page bill that have led to opposition from moderates in the Democratic party and Republicans. 

Two free years of community college

The legislation provides two years of free community college for all students. The anticipated to cost $108 billion.

The bill would also add $80 billion in funding for Pell Grants for families with a total income of up to $50,000 which Democrats say hasn’t kept pace with the increasing cost of college.

Climate change

The plan includes $3 billion for ‘tree equity’, $12 billion for electric cars, $1 billion more to turn government facilities into ‘high-performance green buildings’ and millions more for gender identity and bias training.

The legislation would also spend billions of dollars to tackle climate change, including President Biden’s proposed ‘Climate Change Corps.’ It would get $7.5 billion for conservation work on public lands.

Government training 

Race and gender-based issues come with smaller spending, but will likely raise hackles among Republicans and moderate Democrats.

The bill includes $25 billion for non-profits to provide ‘anti-discrimination and bias training’ in health care.

Biden spoke to Republicans and Democrats during a visit to the Congressional baseball game on Wednesday evening

Extended child tax credit

Democrats expanded the child tax credit for 2021 in their $1.9 trillion COVID-19 relief plan, and now want to extend it through 2025.

Under the enhancement, families receive $3,600 per child under age 6, and $3,000 per child age 6 to 18. Most families receive monthly payments of either $250 or $300 per child.

The full expanded child tax credit is available to individuals making up to $75,000 or married couples making up to $150,000, 

Tax cuts for workers without children

The White House says roughly 17 million low-wage workers will benefit from the increase in the Earned-Income tax credit from $543 to $1,502. 

Paid family medical leave

U.S. would have comprehensive paid leave, covering 12 weeks of paid family and medical leave. The legislation would replace at least two-thirds of earnings, up to $4,000 per month, while the lowest-paid workers would receive 80 percent of their income.

Child care and universal pre-K

Every family that applies shall be offered child care assistance for children ages 0 to 5. In all, the plan allocates roughly $450 billion to lower the cost of child care and provide two years of universal pre-K for 3- and 4-year-olds, according to the House Education and Labor Committee.

The panel estimated that this proposal would keep the cost of child care at or below 7 per cent of most families’ income.

Medicare expansion

This heavily debated provision would expand Medicare to include coverage of dental, hearing and vision services. 

Cut prescription drug prices

Another key part of the bill is aimed at helping to slash prescription drug prices. 

Americans on average pay two to three times as much as people in other countries for prescription drugs, according to the White House.

The administration will lower drug costs by letting Medicare negotiate prices and removing the impact of pharmaceutical companies. 

How the Biden administration plans to pay for it

Democrats have included tax plan to pay for the huge bill, that mainly targets the rich.

The corporate tax rate would rise from 21 per cent to 26 percent, and the top income tax rate for Americans making over $400,000 would increase from 37 per cent to 39.6 percent. The top capital gains rate would also go from 20 percent to 25 percent.

Biden has promised he won’t raise taxes on anyone earning less than $400,000, but Republicans insist that simply won’t happen. 

Democrats are also looking to spend $79billion in additional funding to bulk up IRS enforcement and try and crack down on tax avoiders.

This includes a plan that banks will be have to report transactions over $600 to the IRS. 

This crackdown on unreported income is expected to generate $463 billion over the next decade, according to the Office of Tax Analysis. That money would be used to partially fund Biden’s $3.5 trillion budget reconciliation plan.

The Joint Committee on Taxation estimates the tax changes spearheaded by Democrats would raise more than $2 trillion in revenue over 10 years, with roughly $1 trillion in tax increases from high-income Americans and nearly $1 trillion from corporate and international tax reforms.

How much will it really cost?

The White House has suggested that the huge spending plan will cost ‘zero dollars’.

But an analysis by the Committee for a Responsible Federal Budget (CRFB) found the proposals in the agenda would require the US to directly borrow $1 trillion, projecting that nearly $3 trillion would be added to the national debt over the next 10 years.

The former measure, which passed the Senate in August, would only offset its own costs by about $200 billion according to the CRFB. That leaves $350 billion to be paid.  

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