US mulls $4 trillion jobs, infrastructure spending plan: Report

Raising taxes on companies and the wealthy will be central to funding the package, sources tell Reuters.

US President Joe Biden will be advised this week on a range of options to boost the economy and tackle income inequality and climate change, sources tell news agencies [File: Yuri Gripas/Abaca/Bloomberg]

United States President Joe Biden will be briefed by advisers this week on infrastructure, climate and jobs proposals being considered by the White House that could collectively cost as much as $4 trillion, the Reuters news agency reported, citing people familiar with the discussions.

Biden’s advisers are weighing a price tag of between $3 trillion and $4 trillion for new legislative action, including repairing the country’s crumbling infrastructure and tackling climate change, one source said.

A second source said Biden advisers have a package of proposals totalling up to $3 trillion for infrastructure and other priorities they are discussing with the president this week.

White House spokeswoman Jen Psaki said on Twitter on Monday that Biden would not unveil a proposal this week but that the “focus will be on jobs and making life better for Americans.

“He is considering a range of options, scopes and sizes of plans and will discuss with his policy team in days ahead, but speculation is premature,” she added.

The price range does not include separate proposals to make child tax credits and other benefits to lower-income Americans in the latest stimulus act permanent, the second source said.

The New York Times newspaper reported earlier on Monday that Biden’s advisers were preparing to recommend he spend as much as $3 trillion on boosting the economy, reducing carbon emissions and narrowing economic inequality, beginning with a giant infrastructure plan.

The Washington Post newspaper and broadcaster CNN reported that a $3 trillion effort was expected to be broken into two parts, one focused on infrastructure, and the other devoted to other domestic priorities, such as universal pre-kindergarten, national childcare and free community college tuition.

An administration official briefed on the matter confirmed that splitting the spending plan into two parts was likely.

Many questions remain about how to structure and pay for any infrastructure or climate change-related bill, and what Republicans in Congress might be willing to support.

Tax hikes

Biden used the Democrats’ slender majority in the US Senate to push through a $1.9 trillion pandemic relief bill earlier this month through a special process called reconciliation.

Democrats see infrastructure as one area where they might be able to attract support from Republicans because of the need to rebuild roads, bridges and airports across the country, but Republicans are already expressing scepticism.

Some US Republicans say the Democrats’ plans to improve infrastructure are a ‘Trojan horse’ for large tax hikes [File: Kamil Krzaczynski/Reuters]

“We’re hearing the next few months might bring a so-called ‘infrastructure’ proposal that may actually be a Trojan horse for massive tax hikes and other job-killing left-wing policies,” Minority Leader Mitch McConnell said on the Senate floor on Monday.

Congress never voted on an infrastructure plan unveiled by the Trump administration in 2018 that proposed spending $200bn over 10 years to spur $1.5 trillion in largely private-sector infrastructure spending.

House Republicans voted last week to lift a ban on earmarks, or funding for local projects that can serve as legislative “sweeteners”, a potential boost to any Biden bill.

But many Republicans favour more traditional infrastructure tied to transport such as highways and have endorsed spending designed to enhance the competitiveness of American technology versus China. Senate Majority Leader Chuck Schumer has teamed up with GOP Senator Todd Young of Indiana to propose such a China-oriented bill.

Unlike the COVID-19 emergency-spending programme, the longer-term proposals will feature a major revenue-raising effort. Aides say increasing corporate taxes and rates for the wealthy will be central components of what is set to amount to the biggest tax increases since the 1990s, the Bloomberg news agency reported.

The New York Times said administration officials have considered financing the plan by reducing federal spending by as much as $700bn over 10 years, and raising the top marginal income tax rate to 39.6 percent from 37 percent.

Biden has pledged not to raise taxes on individuals making less than $400,000 a year.

Source: News Agencies