Biden administration planning $3 trillion economic recovery package

by | Mar 24, 2021 | Economy, Policy

The Biden administration plans on going big yet again. After passing a $1.9 trillion COVID relief bill, the White House is now planning an additional $3 trillion package as part of its “Build Back Better” agenda. First reported by the New York Times, the sweeping plan is set to be unveiled next week and will make massive investments in infrastructure, clean energy, education, manufacturing, and more. Should the plan pass, Texas could end up reaping huge benefits. 

Infrastructure appears to be a major part of the package, with nearly $1 trillion allocated for roads, bridges, rail, broadband, electric vehicle charging stations, ports, and the electric grid. Texas is in dire need of an infrastructure upgrade, with the state receiving an overall C grade from the American Society of Civil Engineers, including a D+ for its roads and a D for its levees. The events of last month also show how badly the Lone Star State (as well as the entire country) needs to modernize its electrical grid.

The infrastructure plan is not just about improving the nation’s economic health, it will also take measures to combat climate change. The infrastructure component will reportedly include $400 billion on climate-related measures, including $60 billion for green transit and $46 billion for research and development. Texas will definitely want to follow the plan’s energy initiatives in particular. Texas will not want to be left behind as the nation switches from fossil fuels to clean energy, but as the energy capital of the world it is in a unique position to assist with the transition. 

 The recovery plan provides $200 billion for housing infrastructure, including $100 billion for low-income housing. The plan seeks to create one million affordable and energy-efficient housing units to combat both the housing crisis and the climate crisis. Affordable housing is another nationwide issue that’s particularly acute in Texas. The Lone Star State only has 29 affordable and available homes per every 100 extremely low-income renter households, compared to the national average of 46 (in Austin the number is only 14). 

The recovery plan doesn’t just invest in infrastructure, it also invests in people. Key provisions include free community college, universal pre-K (something Texas needs) and advanced training for millions of workers. The Biden administration also plans to include hundreds of billions of dollars in tax credits and incentives for things like child care and energy-efficient buildings, which could raise the total price tag to nearly $4 trillion.

The plan includes many other provisions from investing in growing new technologies like 5G and extending subsidies for the Affordable Care Act. More proposals will likely be revealed when the Biden administration officially reveals its recovery plan.  

While some might balk at the costs, especially so soon after a $1.9 trillion in spending on COVID relief, there are a couple of things to consider. First, the recovery plan’s spending will almost certainly take place over the course of several years, as opposed to the relief package that is spending $1.9 trillion in one year.

Furthermore, the White House has a plan to actually pay for its proposals. Biden plans on raising taxes on corporations and those making over $400,000 a year, promises he made on the campaign trail. Measures to reduce the price of prescription drugs may also be included, which would simultaneously help Americans dealing with rising while also saving the federal government hundreds of billions of dollars on Medicare and Medicaid. 

White House officials say that the plan is still preliminary and subject to change. On Monday, White House Press Secretary Jen Psaki said that President Biden was still being briefed by his economic aides and no final decisions had been made. “We’ll have to see what his reaction is,” said Psaki. 

Furthermore, it is not clear how the Biden administration plans on getting the plan through Congress. Democrats only have a slim majority and Republicans are unlikely to support a bill with such high spending, especially when tax increases are included. White House officials are reportedly debating whether to pass the package all at once or break it up and try to pass pieces of it with bipartisan support. Democrats might use budget reconciliation as they did with COVID relief, which would allow them to get past the filibuster without needing any Republican support. Should they choose that route, the Democrats will likely take a “kitchen sink” approach as they only have one more use of reconciliation for the year. On the other hand, President Biden may want to avoid ramming through yet another massive bill without any Republican support, which could mean trying to reach bipartisan compromises on issues like infrastructure while saving reconciliation for more contentious provisions like taxes. 

 The situation remains fluid and we’ll keep you updated about the plan as it evolves and crystallizes. Biden is set to give his first address to Congress in April, and you can expect him to pitch his recovery package to factor heavily in his speech.

Photo: Adam Schultz / Wikimedia Commons

Washington Correspondent | + posts

William serves as the Washington Correspondent for the Texas Signal, where he primarily writes about Congress and other federal issues that affect Texas. A graduate of Colorado College, William has worked on Democratic campaigns in Texas, Colorado, and North Carolina. He is an internet meme expert.

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