Biden speaks on the economy as Democrats push tax plan

Washington — President Biden is speaking Thursday about leveling the playing field in the U.S. economy, after Democratic-led House committees concluded their work this week on crafting their $3.5 trillion social spending package. The package is key to Mr. Biden’s “Build Back Better” agenda. 

Facing a Wednesday deadline to complete their respective portions of the massive plan, the committee work highlighted Democrats’ intraparty divisions about the size of the wide-ranging proposal and how they want to pay for it, splits that complicate the path forward as Democrats look to deliver a key legislative win for the president. On Thursday, the president reiterated why he believes the plan needs to be passed. 

“I know we still have a long way to go, but I’m confident the Congress will deliver to my desk both the bipartisan physical infrastructure plan and the Build Back Better plan that I have proposed,” the president said Thursday. “As I’ve said many times before, I believe we’re at an inflection point in this country — one of those moments where the decisions we’re about to make can change, literally change the trajectory of our nation for years and possibly decades to come.”

“Each inflection point in this nation’s history represents a fundamental choice,” the president continued. “I believe that America at this moment is facing such a choice, and the choice is this: Are we going to continue with an economy where the overwhelming share of the benefits go to big corporations and the very wealthy, or are we going to take this moment right now, to take this country on a new path? One that invests in this nation, creates real, sustained economic growth, and that benefits everyone, including working people and middle-class folks.” 

The plan comes as the president touted the United States’ uniquely quick economic recovery from the pandemic compared to other nations, as the U.S. economy grows at the fastest rate in nearly 40 years. The country has a record 10.9 million job openings. 

“While this is all good news, I know many Americans are still struggling to make it through each and every day,” Mr. Biden said. “For too many, it’s harder and harder to pay the bills — food, gas, health care. I get it.” 

In his speech, the president also called out GOP governors who are blistering at his requirement that businesses with 100 employees or more mandate vaccines or regular testing. Arizona has already filed a lawsuit. 

“This is the worst kind of politics. Because it’s putting the lives of citizens of their states, especially children, at risk, and I refuse to get into it,” Mr. Biden said. 

Mr. Biden has spent the summer pitching his plan to expand social programs, which he argues will drive economic growth.

A plan to lower the price of prescription drugs failed in one House panel after three Democrats voted with their Republican colleagues against it, but the same provision was separately approved by the House Ways and Means Committee.

The Ways and Means Committee, the chamber’s chief tax-writing panel, unveiled a tax proposal this week to pay for the $3.5 trillion package, which includes Democrats’ plans for universal pre-K, expanding Medicare, child and elder care, and the environment. The committee approved its portions of the sweeping measure in a near party-line vote Wednesday, which included the tax provisions.

The tax proposal unveiled by House Democrats takes aim at high-income Americans and corporations, including by raising the corporate tax rate to rise from 21% to 26.5% and the top income tax rate for Americans making more than $400,000 from 37% to 39.6%.

The top capital gains rate would also increase from 20% to 25%. The plan includes $80 billion for the Internal Revenue Service, used to beef up tax enforcement and improve the agency’s technology to support enforcement activities.

The changes proposed by Democrats would raise more than $2 trillion in revenue over 10 years, according to the Joint Committee on Taxation, with roughly $1 trillion in tax increases from high-income Americans and nearly $1 trillion from corporate and international tax reforms. 

Democrats are using a tool called reconciliation to fast-track the $3.5 trillion package, which together with a more targeted $1 trillion bipartisan infrastructure bill, make up key portions of Mr. Biden’s domestic policy agenda.

The reconciliation process allows Democrats to pass the legislative plan with a simple majority in the Senate, eliminating the need for Republican backing. But two Senate Democrats, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, have objected to the $3.5 trillion price tag.

Mr. Biden met separately with the senators at the White House on Wednesday.