Biden touts ‘historic economic framework’ after spending compromise

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WASHINGTON — President Biden on Thursday said he brokered a “historic economic framework” after he and Democratic leaders on Capitol Hill settled on a blueprint for nearly $2 trillion in new social and environmental spending — despite some Democratic members, including progressives, still withholding their support.

“I think we have a historic — I know we have a historic economic framework,” Biden said at the White House after an early morning visit with House Democrats, where he pleaded with them to go along with it.

“We spent hours and hours and hours over months and months working on this. No one got everything they wanted, including me,” he said.

The compromise sets the stage for final passage as early as Thursday of a $1.2 trillion Senate-passed bipartisan infrastructure bill. The larger social spending and environmental bill likely will take days to write.

Biden took a victory lap at the White House with Vice President Kamala Harris standing nearby and first lady Jill Biden watching from behind reporters. 

“The agenda that’s in these bills is what 81 million Americans voted for… Their voices deserve to be heard, not denied, or worse, ignored,” Biden said before departing DC for a Thursday afternoon trip to Rome, Italy.

President Joe Biden announced on October 28, 2021 that he and other Democrats have finally reached a compromise on a  nearly $2T new social and environmental spending plan.
President Biden announced on October 28, 2021, that he and other Democrats have finally reached a compromise on a nearly $2 trillion social and environmental spending plan.
Jonathan Ernst/REUTERS

But Biden delivered a warning to House Democrats behind closed doors.

The president told House lawmakers over breakfast, “I don’t think it’s hyperbole to say that the House and Senate majorities and my presidency will be determined by what happens in the next week,” urging them to stick with him.

In his public remarks, Biden claimed the new agreement “will actually reduce the deficit” and “lower the inflationary pressures on the economy.” He took no questions from reporters — and still must win over skeptical House leftists after closely adhering to the requests of moderates in the evenly divided Senate.

Despite reaching the "compromise" some Democrats like Sen. Tom Suozzi have said they still plan to vote against it.
Despite reaching the “compromise,” some Democrats like Rep. Tom Suozzi have said they still plan to vote against it.
Lev Radin/Sipa USA

According to the White House, the framework will cost $1.75 trillion and will be financed through $1.995 trillion in new revenue through new taxes and increased IRS enforcement.

The package, which Democrats can pass with no Republican support using special budget reconciliation rules, contains many elements of Biden’s original plan, but, significantly, doesn’t include free community college or paid parental and family leave for private-sector workers due to opposition from centrists including Sen. Joe Manchin (D-WVa.).

The compromise contains $555 billion in environmental spending and $400 billion for universal preschool and child care subsidies that cap the expenses of most families at 7 percent of income.

US President Joe Biden and Speaker of the House Nancy Pelosi depart following a meeting with the Democratic caucus at the US Capitol.
President Biden and House Speaker Nancy Pelosi depart following a meeting with the Democratic caucus at the US Capitol.
MANDEL NGAN/AFP via Getty Images

The settlement has $150 billion for low-income housing, $150 billion for home health care, $130 billion in ObamaCare tax credits and $35 billion for Medicare to cover the cost of hearing treatment. It would put $200 billion toward extending for one year a bump in the annual child tax credit for families that earn up to $150,000 — from $2,000 to $3,000 per kid, or $3,600 for those under 6.

The spending is offset by a raft of delicately negotiated tax hikes on wealthier people and businesses, as well as $400 billion in projected gains from heightened IRS enforcement.

Proposed tax hikes include a new 15 percent minimum tax on large corporation profits and new taxes on corporate stock buybacks and offshoring of jobs. It also would impose a new income tax surcharge of 5 percent on annual income above $10 million and an extra 3 percent on income above $25 million.

US First Lady Jill Biden looks on as US President Joe Biden speaks about his administration's social spending plans.
First lady Jill Biden looks on as President Biden speaks about his administration’s social spending plans.
Nicholas Kamm/AFP /etty Images

“I don’t want to punish anyone’s success. I’m a capitalist,” Biden said Thursday. “I want everyone to be able to, if they want to be a millionaire or billionaire, to be able to seek their goal. But all I’m asking is, ‘Pay your fair share. Pay your fair share. Pay your fair share.’ And right now, many of them are paying virtually nothing.”

The framework would close a loophole that Biden himself exploited to avoid Medicare taxes on about $13 million of his income in 2017 and 2018 — a policy the White House projects will raise $250 billion. Critics say Biden should reimburse the IRS for $500,000 he avoided paying.

The White House framework doesn’t include repeal of the 2017 “SALT cap” of $10,000 on state and local taxes that residents of high-tax jurisdictions like New York can deduct from federal taxes.

But a source close to Senate Majority Leader Chuck Schumer (D-NY) said the SALT cap repeal — estimated to cost about $160 billion over two years — will be in the final deal. House Ways and Means Committee Chairman Richard Neal (D-Mass.) also said that.

Reps. Josh Gottheimer (D-NJ), Bill Pascrell (D-NJ) and Tom Suozzi (D-NY) have vowed to oppose the package that doesn’t address the SALT cap, potentially tanking a deal due to the extremely narrow Democratic majority in the House.

“No SALT, no deal! I am confident it will be part of the final deal,” Suozzi tweeted Thursday morning.

Rep. Rashida Tlaib (D-Mich.), meanwhile, told reporters Thursday that she’s a “hell no” on proceeding to a vote on the infrastructure bill if the social spending package isn’t passed at the same time.

Although 19 Senate Republicans supported the infrastructure bill, House Republicans are whipping against it citing inflation and the national debt, meaning that Biden and House Speaker Nancy Pelosi (D-Calif.) must keep most Democrats in line and likely win over a handful of GOP votes.

The infrastructure bill provides $110 billion for roads and bridges, $73 billion for “clean energy” electrical transmission, $66 billion for passenger and freight rail, $65 billion for broadband internet, more than $50 billion for water infrastructure, $39 billion for public transit, $25 billion for airports, $7.5 billion to install new electric vehicle charging stations and $5 billion to buy electric and low-emission buses.



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