Joe Biden's $7 trillion spending proposal: What's in it?
Biden is expected to formally accept the Democratic presidential nomination on Thursday from Wilmington, Delaware
TrendMacro CIO Donald Luskin adds his perspective on how a Biden administration could impact the economy and markets, the difference between being rich and being wealthy and a proposed California wealth tax.
Joe Biden wants the federal government to spend close to $7 trillion more over the next decade on issues like health care, housing and climate change — part of a sweeping presidential platform that he says will build on President Barack Obama's legacy and unite a fractured nation.
The former vice president has said he will pay for the measures with about $4 trillion in tax increases on corporations, investments and wealthy Americans. That includes an overhaul of President Trump's massive $1.5 trillion Tax Cuts and Jobs Act, which slashed the corporate tax rate to 21% from 35% and temporarily reduced individual income taxes.
"I'm going to get rid of the bulk of Trump's $2 trillion tax cuts, and a lot of you may not like that, but I'm going to close loopholes like capital gains and stepped-up basis," Biden said, according to a pool report of the virtual fundraiser.
Biden's trillion-dollar proposals signal that he'll continue the unprecedented level of government spending that began in mid-March as American life came to a grinding halt because of the COVID-19 crisis.
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In the span of 10 months, the budget deficit climbed to $2.81 trillion, a record high, according to the Treasury Department. In total, the U.S. government has spent more than $5.6 trillion so far this year.
The deficit for fiscal 2020 is projected to hit $3.7 trillion, a record, according to a projection from the Congressional Budget Office. The current record for a fiscal year deficit is $1.41 trillion, set in 2009.
Vermont Sen. Bernie Sanders lauded his one-time rival's policy measures on Monday night during his Democratic National Convention speech.
"Joe will move us forward," he said, citing Biden's policies on paid family leave; universal child care; health care; and criminal justice reform.
"The future of our democracy is at stake. The future of our economy is at stake. The future of our planet is at stake. We must come together, defeat Donald Trump and elect Joe Biden and Kamala Harris as our next president and vice president," he said. "My friends, the price of failure is just too great to imagine."
Biden is expected to formally accept the Democratic presidential nomination on Thursday from Wilmington, Del., where he lives and served for years as a U.S. senator, instead of Milwaukee, the original convention site, as a result of the coronavirus pandemic.
Take a closer look at Biden's multi-pronged proposals - and where the money would go:
Climate change: $2 trillion
In mid-July, Biden unveiled an aggressive plan to boost investment in clean energy and stop all carbon emissions from U.S. power plants by 2035. It would set the country on a path to achieve net-zero emissions by 2050.
Sizeable investments would be made to retrofit the country's infrastructure and housing.
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The climate initiative was unveiled following the release of policy recommendations by joint task forces created by Biden and Sanders.
Infrastructure: $1.3 trillion
Biden in November rolled out a $1.3 trillion plan to make major investments in the country’s infrastructure, with goals of reducing carbon emissions, rebuilding the nation’s ailing highways and bridges and creating middle-class jobs.
The plan to “Invest in Middle Class Competitiveness” calls for spending over a 10-year period, with money coming from reversing Trump’s tax cuts, closing loopholes in the tax code that reward the wealthy and ending fossil fuel subsidies.
The former vice president called for spending $50 billion on repairing existing roads and bridges, $10 billion on transit projects for high-poverty areas, $20 billion in rural broadband infrastructure and $100 billion to modernize the school system, among other proposals. The sprawling plan would also “spark the second great railroad revolution.”
Child care and elder care: $775 billion
The so-called "21st Century Caregiving and Education Workforce” would invest $775 billion during the next decade to rebuild the nation's caregiving economy, with a focus on daycare in early childhood; in-home elder care and long-term care for individuals with disabilities.
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It would expand child care for kids up to five years -- including universal pre-school.
Higher education: $750 billion
Biden has endorsed a higher education plan his campaign estimates will cost $750 billion over the next 10 years. A main goal of the plan would be making community college free for up to two years. It would also double the maximum value of Pell Grants, a federal subsidy for low-income students, and allow DACA dreamers and former prisoners to receive financial aid.
Over $70 billion would be invested in historically Black colleges.
Health care: $750 billion
The former vice president has laid out a plan to expand the Affordable Care Act, one of the biggest legislative accomplishments of the Obama administration, by adding a public option that's open to all Americans but preserves the option for individuals to keep their private insurance. It would maintain protections for patients with preexisting conditions.
He estimates it would cost about $750 billion over the next decade; his campaign has said it would be funded in part by rolling back Trump's $1.5 trillion tax overhaul in 2017.
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"I understand the appeal of Medicare for All," Biden said when he introduced the proposal. "But folks supporting it should be clear that it means getting rid of ObamaCare. And I'm not for that."
"Buy American" plan: $700 billion
Biden proposed a $400 billion, four-year increase in government purchases of U.S.-based goods, on top of $300 billion in new research and development in U.S. technology.
The introduction of Biden's "Buy American" plan in July was an implicit attack against Trump amid the coronavirus pandemic. The former vice president said the proposal was intended to reduce American reliance on foreign countries after the virus-induced crisis exposed the vulnerabilities lurking in the global supply chain.
Housing: $640 billion
Biden's $640 billion housing plan includes tax credits for first-time homebuyers and low-income renters, as well as federal aid for some of the country's poorest renters.
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His proposal would end redlining and increase the supply of affordable housing in the country.
Opioid plan: $125 billion
Biden has called for $125 billion in federal investments to make prevention, treatment and recovery services more readily available. It would be paid for in part by raising taxes on pharmaceutical company profits.
The plan also seeks to curb overprescribing; reforming the criminal justice system and stemming the flow of drugs like fentanyl and heroin into the U.S. from China and Mexico.
Racial equality: $30 billion
The plan from Biden to address racial equity in the U.S. calls for $30 billion in new spending — 10% of the $300 billion he intends to invest in research and development to stimulate the economy — to a new small business opportunity fund.
Biden's campaign estimated it would spur $150 billion in venture capital and low-interest business loans.