Washington: In an abrupt change, the White House on Wednesday floated new plans to pay for parts of President Joe Biden’s $2 trillion social services and climate change package, shelving a proposed big increase in corporate tax rates though also adding a new billionaires’ tax on the investment gains of the very richest Americans, AP has reported.
The reversal came as Biden returned to his hometown of Scranton, PA to highlight the middle class values he says are at the heart of the package that Democrats are racing to finish. Biden faces resistance from key holdouts, including Sen. Kyrsten Sinema who has not been on board with her party’s plan to undo Trump-era tax breaks to help pay for it.
“This has been declared dead on arrival from the moment I introduced it, but I think we’re going to surprise them, because I think people are beginning to figure out what’s at stake,” Biden said in a speech in Scranton, his first visit home since becoming president.
Negotiations between the White House and Democratic leaders on Capitol Hill are underway on what’s now a scaled-back package but would still be an unprecedented federal effort to expand social services for millions and confront the rising threat of climate change. It’s coupled with a separate $1 trillion infrastructure bill.
Biden and his Democratic Party have given themselves a deadline to seal agreement after laboring to bridge his once-sweeping $3.5 trillion vision preferred by progressives with a more limited focus that can win over party centrists.
The newly proposed tax provisions, though, are likely to sour progressives and even some moderate Democrats who have long campaigned on undoing the 2017 GOP tax cuts. The revisions wouldn’t still be all positive for big companies and the wealthy. The White House is reviving the idea of a minimum corporate tax rate.
In the mix: At least $500 billion to battle climate change, $350 billion for child care subsidies and free pre-kindergarten, a new federal program for at least four weeks of paid family leave, a one-year extension of the $300 monthly child tax credit put in place during the COVID-19 crisis, and funding for health care provided through the Affordable Care Act and Medicare.
Likely to be eliminated or shaved back: plans for tuition-free community college, a path to permanent legal status for certain immigrants in the U.S. and a clean energy plan that was the centerpiece of Biden’s strategy for fighting climate change.
“Nothing is decided until everything is decided,” said Rep. Pramila Jayapal, leader of the Congressional Progressive Caucus after a morning meeting of House Democrats. “We’re just trying to get it done.”