WASHINGTON — When congressional committees meet formally this week to begin drafting Democrats’ ambitious social policy plan, they will mark the most significant expansion of the nation’s safety net since the war on poverty in the 1960s , which will create laws that will touch the lives of nearly every American. , from conception to old age.
Passage of the bill, which could cost up to $3.5 trillion over the next decade, is anything but certain. President Biden, who has staked much of his domestic legacy on the measure’s enactment, would need the vote of every single Democrat in the Senate and nearly every one in the House to secure it. and with two Democratic senators, Joe Manchin III of West Virginia And Arizona’s Kirsten Cinema said they would not accept a plan so expensive it would challenge democratic unity as nothing has since the Affordable Care Act.
That’s in large part because the proposed legislation would be so transformative – a cradle-to-serious reworking of a social safety net that has been surrounded for decades by rising income inequality, stagnant wealth and dwindling government resources, the worst in a century. Public health is surrounded by crisis.
The pandemic loosened the reins on federal spending, prompting members on both sides to support the economy by showering them with aid. It also overshadowed decades-old policy wishes – such as expanding Medicare coverage or paid family and medical leave – Democrats argue have proved necessary as the country goes through the coronavirus crisis.
“Polls have shown for a very long time that these issues were important, and popular, to support American families, but suddenly they are not ‘good’ but ‘must be’,” said Heather Bouche, an economic adviser to Mr. Biden. Council members who have been developing such policies for decades.
Democrats say they will finance their spending with a proposed tax increase on corporations – which has already provoked A multifaceted, big budget effort By business groups working to dismantle the idea – and possibly by taxing money in a way the United States has never tried before.
“We are talking about free or affordable child care where no one pays more than 7 percent of their income; We are talking about universal Pre-K programs with two years of formal instruction; We’re talking about two years of post-secondary education,” said New York Representative Jamal Bowman, a former teacher and principal who is deputy chairman of the House Education and Labor Committee. “That’s how you build a strong nation. Huh.”
For Republicans who are preparing for a countermeasure, Democratic plans are nothing short of socialism. They say they are concerned that the plan is economically unsustainable and would undermine economic growth, leaving Americans dependent on the government for their basic needs.
“What are the Democrats trying to do for this country?” Republican Representative Bruce Westerman of Arkansas asked Thursday, as the House Natural Resources Committee began drafting its portion of the massive bill.
To understand the scope of the intended measurement, consider a life from conception to death. Democrats intend to fund paid family and medical leave To allow parents some time off during pregnancy and after the baby is born.
When that parent is ready to return to work, the money extended to care for the child will help cover the cost of day care. When that child turns 3, another part of the bill, Universal Prekindergarten, will ensure that public education can begin at an earlier age, no matter where the child lives.
Most families with children will continue to receive federal income supplements each month in the form of an expanded child tax credit that was created temporarily by Biden’s pandemic-rescue law and will be enhanced by the new social policy bill. School nutrition programs, expanded on an emergency basis during the pandemic, will continue to offer free and low-cost meals to more children until the coronavirus hits back.
And upon high school graduation, most students will be guaranteed two years of higher education through federal financial aid extended toward community colleges.
Even after that, income supplementation and generous workforce training programs – including specific efforts to train workers in home health and elderly care – will keep the government present throughout many adult lives. In old age, people will be helped by tax credits to offset the cost of elderly care and by expanding Medicare to cover dental, hearing and vision services.
“Many of us think this will be the biggest opportunity in our careers to do something deeply structural and transformative for our economy,” said Representative Donald S. Baer Jr., Democrat of Virginia. And we shouldn’t miss it.”
To critics, the law represents a fundamental uplift of American-style governance and a shift toward social democracy. With it, they worry, will come European-style endemic unemployment and depressed economic dynamism.
“There has always been disagreement over the role of government in people’s lives, and the United States has long taken a different approach than Western Europe,” Harvard economist N. Gregory Mankiw, who was the chairman of President George W. Bush’s council. of economic advisors. “It’s clearly designed to be a big step towards the Western European model.”
Defenders brushed off such concerns. The chairman of the House Education and Labor Committee, Virginia Representative Robert C. Scott said the legislation would spur economic growth, with child care subsidies that would bring parents back into the work force, education spending to prepare all Americans equally to work, and jobs to improve labor mobility. Training.
“We are making the US economy more dynamic and globally competitive,” he said.
Furthermore, in a long-standing struggle to balance economic growth against equity and equity, Democrats are set to shift toward the latter.
“The path we have taken has led to the concentration of wealth in the hands of very few, while the rest have struggled to survive,” Mr Bowman said. “It’s time to do something else.”
In a mechanical sense, the law isn’t as big of a change as the creation of Medicare and Medicaid in the 1960s or Social Security in the 1930s. Even the Affordable Care Act of 2010 created an entirely new government infrastructure, a federally-run or regulated exchange where Americans could purchase private health insurance, in line with government strictures on coverage and cost. Should, Michael R., an economist at Conservative. Strain said. American Enterprise Institute.
Conversely, the new law would substantially augment existing programs. Childcare assistance will be provided to states, cities and counties through Community Development Block grants. Universal Pre-K will be secured through block grants and expanded funding for Head Start. Two years of higher education should be accessible through more generous Pell grants and other existing financial aid programs.
But if it is passed, Mr Strain said the law could fundamentally change the relationship between the state and its citizens: “its ambition lies in its size.”
Most Americans traditionally see the federal government’s involvement in their finances once a year, at tax time, when they claim child credits, receiving write-offs for trucks they used for their business. Be bought, or get checks for earned income credits to name a few.
This will change profoundly if the Social Policy Bill is enacted. Started providing Extended Child Tax Credit Monthly check up to $300 per child for millions of families, but is expected to end in 2022. Its extension to a decade could make it a fixture of life that would be very difficult for future Congress to overcome. The same goes for the Child and Dependent Care Credit, which now offers up to $8,000 in child care expenses but also expires in a year.
And the federal government, not private employers, will pay most of the wages of people who qualify for family and medical leave.
“If we pass this, a decade from now, people will see many more touch points of the government that is supporting them and their families,” Ms Bouche said.
A big gap between the social economy that Biden and congressional Democrats hope to make and the welfare state in Europe is how it will be paid for. Most European countries ask their citizens to fund their social welfare programmes, largely through a value-added tax, a sales tax levied at each stage of production of a consumer good.
At the president’s urging, the House and Senate tax-writing committees are to finance the bill’s spending with taxes on corporations and individuals who have an income of $400,000 a year.
To that end, the Senate Finance Committee is considering how to tax the estate, including changing how estates are taxed so that heirs have to pay more tax on the inherited property.
The committee is also looking at taxing the accumulated wealth of billionaires – things like houses, boats, stocks and other assets, whether they are sold or not. new tax policy Which will be difficult to achieve. Senator Ron Wyden of Oregon, chairman of the finance committee, said such measures are the only way to ensure that the superrich pay their fair share of taxes each year.
“I’m going to bring the caucus into that discussion, but I believe billionaires should pay taxes every year, just as nurses and firefighters do” out of every paycheck, Wyden said.