Biden family recovery plan costing more than $ 1 trillion extends the child discount

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

Biden will follow the first phase of its infrastructure plan, a proposal worth more than $ 2 trillion, with a package known as the American Families Plan. While the details are still in flux, the measure is expected to include about $ 1 trillion in new spending and $ 500 billion in tax credits, according to the source, which declined to be named.

The White House is expected to roll out the plan within days.

Biden’s American Jobs Plan, which the Congressional Democrats have begun to work out, calls for renewal of roads, bridges, airports, broadband, utilities, housing and job training.

The second part is expected to expand childcare, paid time off, pre-K education, and tax breaks for families, while increasing taxes for the wealthy. This policy is a priority for progressives, who have said they want to address shortcomings in the social safety net exposed by the coronavirus pandemic, which is disproportionately affecting women in the labor market.

It would extend the boosted children’s tax credit – which raised to a whopping $ 3,600 per child per year by the Democrats’ coronavirus relief bill – through 2025, but not make it permanent, CNBC confirmed. The Biden administration is likely to take measures to offset the costs by increasing taxes on the richest Americans, and is considering options including raising the top income tax rate to the pre-2017 level of 39.6% and taxing capital gains as ordinary income.

The Washington Post first reported the details of the proposal.

In a statement, White House spokesman Michael Gwin said: “ President Biden has already put forward the first part of his historic plan to invest in the strength of the U.S. outline that proposal in the near future. days. “

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

Following the passage of its $ 1.9 trillion coronavirus contingency plan last month, the White House moved on to its next priority in infrastructure plans. Democrats face challenges in adopting one or both parts of the recovery proposal.

Since Biden took office, the hunger for more spending among Republicans has diminished. While the president has said he wants to make an infrastructure deal with his GOP counterparts, Republican lawmakers have shown little point in spending more than $ 800 billion – about one-third of the price tag of Biden’s initial proposal.

The GOP has opposed Biden’s push to increase the corporate tax rate to 28% as part of the original infrastructure plan. Many Republican lawmakers are also likely to oppose individual tax increases as part of the second stage.

Some Democrats in Congress have put forward the idea of ​​working with Republicans to pass a smaller infrastructure law based on transportation and broadband, and then move on to childcare, paid time off and educational provisions themselves through budget reconciliation.

– CNBC’s Thomas Franck contributed to this report.

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