Biden family recovery plan costs more than $ 1 trillion, and extends child tax credit

President Joe Biden’s next economic recovery package will cost at least $ 1 trillion and extend the enhanced child tax credit, a source familiar with the proposal confirmed Tuesday.

Biden will follow the first phase of its infrastructure plan, a proposal worth more than $ 2 billion, with a package known as the American Families Plan. Although the details are still in check, the measure is expected to include about $ 1 billion in new spending and $ 500 billion in tax credits, according to the source who did not want to be named.

The White House is expected to implement the plan within a few days.

Biden’s American Jobs Plan, started by congressional Democrats, calls for renovations to roads, bridges, airports, broadband, utilities, housing and job training.

The second piece is expected to expand childcare, paid leave, preschool education and tax credits for families, while raising taxes on the wealthy. These policies are priorities for progressives, who have said they want to address shortcomings in the social security network exposed by the coronavirus pandemic, which is affecting women in the labor market excessively.

That would increase the enhanced child tax credit – which has been increased by the Democrats’ coronavirus relief bill to as much as $ 3,600 per child per year – until 2025, but not make it permanent, CNBC confirmed. The Biden administration is likely to offset costs by raising taxes on the richest Americans, and considering options to raise the highest income tax rate to the pre-2017 level of 39.6% and to tax capital gains as ordinary income.

The Washington Post first reported details on the proposal.

White House spokesman Michael Gwin said in a statement: “President Biden has already proposed the first part of his historic plan to invest in the strength of the US economy and families, and he will present the second element of the proposal. in the coming year. days. “

“The details of the package are still being finalized, so speculation about the final content is premature,” he said.

Following the approval of its $ 1.9 billion coronavirus relief plan last month, the White House has moved on to its next priority in infrastructure plans. Democrats face challenges in passing one or both parts of the recovery proposal.

The appetite for more spending among Republicans has shrunk since Biden took office. While the president has said he wants to reach an infrastructure deal with his GOP counterparts, Republican lawmakers have shown little desire to spend more than $ 800 billion – about a third of the price of Biden’s first proposal.

The IDP opposed the fight against Biden to increase the tax rate to 28% as part of the initial infrastructure plan. Many Republican lawmakers are also likely to be part of tax increases as part of the second phase.

Some Democrats in Congress have the idea of ​​working with Republicans, a smaller infrastructure bill based on transportation and broadband, and then transferring to pass child care, paid leave, and education provision on their own through budget reconciliation.

Thomas Franck of CNBC contributed to this report.

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