October 4, 2023

United States President Joe Biden speaks in the East Room of the White House in Washington, DC on Thursday, April 15, 2021.

Andrew Harrer | Bloomberg | Getty Images

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

Biden will be pursuing the first phase of his infrastructure plan, a more than $ 2 trillion proposal with a package known as the American Families Plan. While the details are still in the flow, the move is expected to include around $ 1 trillion in new spending and $ 500 billion in tax credits, according to the source, who refused to be named.

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

Biden’s American employment plan, drawn up by the Democrats in Congress, plans to renew roads, bridges, airports, broadband, utilities, housing and vocational training.

The second piece is designed to expand childcare, paid vacation, pre-K education, and tax credits for families while increasing taxes for the rich. These actions are priorities for progressives who have said they want to address the shortcomings in the social safety net exposed by the coronavirus pandemic that disproportionately affect women in the labor market.

It would extend, but not make permanent, the increased child tax credit, raised up to $ 3,600 per child per year by Democrats’ coronavirus bill, through 2025, CNBC confirmed. The Biden administration is likely to try to offset the cost through tax increases for the richest Americans, and is considering options like raising the highest income tax rate to pre-2017 levels of 39.6% and taxing capital gains as ordinary income.

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The Washington Post first reported 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 American economy and family, and he will shortly outline the second element of that proposal. ” Days. “

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

After passing its $ 1.9 trillion coronavirus relief plan last month, the White House moved to its next priority on infrastructure plans. Democrats face the challenge of getting one or both parts of the recovery proposal adopted.

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

The GOP has resisted Biden’s efforts to raise the corporate tax rate to 28% under the original infrastructure plan. Many Republican lawmakers are likely to oppose individual tax increases even during the second phase.

Some Democrats in Congress pioneered the idea of ​​working with Republicans to pass a smaller infrastructure bill based on transportation and broadband, and then pass childcare, paid vacation, and education regulations through budget voting on their own.

– CNBC’s Thomas Franck contributed to this report.

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