President Joe Biden certainly hit the ground running when he took on the top job, and in his first 100 days at the White House revealed three big spending packages. The first, his $1.9 trillion American Rescue Plan, was passed by the Senate on 6 March, which meant eligible Americans received a third stimulus check of up to $1,400.
But it doesn't look like it's going to be as easy for the 46th president to get his other spending proposals on areas beyond the COVID-19 crisis passed. The bills focusing on infrastructure, jobs and families have seen opposition from Republicans as well as from those who are against the tax hikes that would pay for them. So while the first 100 days of his presidency were characterized by action, could Biden's second 100 days in office be where he comes unstuck? Click or scroll through to discover what changes President Biden is planning for America next, how he intends to pay for them, and what those in opposition are proposing instead.
At the end of March, Biden announced a $2 trillion 'Build Back Better' infrastructure and jobs bill at a speech in Pittsburgh (pictured). The White House is currently in negotiation with Republicans over the bill, and a counteroffer is expected from the Republicans tomorrow (27 May), which means that Biden's initial spending proposal is unlikely to become a reality in its full form. But what did Biden's administration initially propose?
The eight-year spending plan aims to revitalize America's infrastructure, including $115 billion to be spent on 20,000 miles of roads and the 10 "most economically significant bridges" in need of reconstruction, although these have yet to be identified from the nation's 618,000 bridges. A further 10,000 smaller bridges, as well as ports, rail, and airports, will be repaired and expanded. An additional $20 billion would go towards improving road safety, and $80 billion to tackle Amtrak's backlog of repairs.
Not only that, another $100 billion would be used to modernize America's aging electrical grid and help prevent future power outages such as those that recently affected Texas. There would also be a $40 billion boost to social housing and $100 billion to the upgrading and building of new public schools, while $45 billion would be spent on replacing the lead piping that currently pumps poisoned water into 9.2 million American homes. Pictured is Biden at Houston Food Bank in Texas in February following the electricity outages.
As well as more traditional infrastructure spending, as much as $100 billion would go towards increasing internet access, with the aim of eventually reaching 100% broadband coverage across all of America. The plan will also tackle the infrastructure of caregiving, allocating $400 billion to the sector as America's population of over-85s is set to triple. This money would boost existing caregivers' wages and create new jobs as President Biden aims to provide home- and community-based care for individuals who otherwise would need to wait for as long as five years.
The proposed infrastructure plan also includes $174 billion intended to "win the EV (electric vehicle) market", which will include measures such as tax incentives and a national network of half a million electric car chargers. Biden also plans to create a Clean Buses for Kids program through the Environmental Protection Agency, which will see 20% of the famous yellow school buses go electric by 2030.
In fact, as part of the plan, the Biden-Harris administration is set to create millions of "good-paying union jobs" across many sectors. The Center on Education and the Workforce claims the plans could save 15 million jobs too.
To pay for the $2 trillion American Jobs Plan, President Biden has said that he would increase corporate tax from 21% to 28%. The rate was previously 35% until former President Trump reduced it to its current rate in 2017. In fact, if the plan goes ahead, it will be the first rise in corporate tax in more than 25 years. It's predicted that at Biden's proposed rate of 28% it will take 15 years to pay off his infrastructure spending.
But how does the world of business feel about footing the bill? The world's richest person, Amazon founder Jeff Bezos, shocked many by revealing that he is in favor of the proposed increase in corporate tax if it's used to pay for the infrastructure plan. And it's an unusual opinion to have among other American businesspeople, as it's been revealed that 98% of CEOs in the US actually think the change would have a negative impact, notably on business expansion, according to a survey by Business Roundtable. Another group not keen on the rise to implement infrastructure improvements is the Republican Party, which has presented an alternative plan to Biden's...
The Republican Party is opposed to parts of the plan, particularly the unionized elements. In fact, Republicans, led by Senator Shelley Moore Capito (pictured), released a slimmed-down counteroffer of a $568 billion infrastructure plan in late April. This plan focused on more traditional infrastructure such as bridges, roads, ports, airports, and broadband Internet, as well as some funding for electric cars, housing and care. The Republican plan also proposed that it be paid for by user fees rather than a corporate tax hike. In response Biden has tried to compromise...
Last week Biden reduced his plan down to $1.7 trillion, matching the lower $65 billion spending proposal for broadband set out by Republicans, and reducing the original proposal's spending on traditional infrastructure such as roads, bridges and projects by $39 billion. The new plan also removes manufacturing, research and development and supply chains out of the proposal.
However, this week Republican senators have revealed that Biden has told them he would be willing to accept a $1 trillion plan, and so they are expected to reveal another counteroffer on Thursday 27 May with that price tag. But as the Memorial Day (31 May) deadline for the talks quickly approaches, it's not clear whether an infrastructure plan of any kind will actually be agreed...
On 28 April, President Biden announced the American Families Plan. Wanting to build on his Rescue Plan of stimulus checks and other payments, which the White House has projected will lift more than five million children out of poverty in 2021, Biden announced spending plans that will benefit families further, through $1 trillion in investments and $800 billion in tax cuts over a 10-year period.
Proposed investments include $200 billion towards free pre-school for all three- and four-year-olds and $109 billion for two years of free community college "so that every student has the ability to obtain a degree or certificate", as well as a $80 billion investment into Pell Grants to help poorer students attend college. Biden is also proposing that $62 billion goes towards enforcing strategies to improve retention rates in institutions in disadvantaged areas, as well as a $46 billion investment in colleges that cater to minority groups. A further $9 billion will go towards teacher training, while $25 billion will go towards making the Summer Electronic Benefit Transfer Program (EBT) permanent so that children from low-income families who receive free or subsidized school meals can also purchase food during vacation periods.
These investments will be combined with tax cuts, several of which are extensions from those put in place in the American Rescue Plan that benefit lower- and middle-income workers and families. These include the Child Tax Credit, the Earned Income Tax Credit, and the Child and Dependent Care Tax Credit, as well as healthcare insurance tax credits that the White House claims are "lowering health insurance costs by an average of $50 per person per month for nine million people, and will enable four million uninsured people to gain coverage". The Plan will also permanently increase tax credits for families with child care needs.
In order to pay for these improvements to education and childcare, Biden wants to impose higher taxes on the rich, including raising the top marginal income tax rate from 37% to 39.6%, and increasing tax on investment gains from 20% to 39.6% for people who earn more than $1 million. The White House has stated that the tax hike will not impact any families earning less than $400,000 a year.
Biden's reasoning is that the proposed improvements to American families' lives should be paid for by "the wealthiest Americans who can afford it and corporations and businesses who can afford it," according to White House Press Secretary Jen Psaki. However, not everyone is of the same opinion, and it's thought that Republicans in Congress will oppose the plan.
So while the Democrats have a majority, it's small and so without unanimous support from his party President Biden might struggle to get his plan through. And when the news came out it immediately had an impact on Wall Street, with the Dow Jones Industrial Average falling 420 points, and the Nasdaq index dropping 0.9%. That said, the plan seems to be popular with the public, with 64% saying they were in favor of it in a Monmouth University poll.
But over the years many of America's super-rich have asked to contribute more taxes, click here to discover who