White House Press Secretary Jen Psaki announced that a new stimulus plan was under the Biden administration’s consideration. This stimulus plan is not to be confused with President Biden’s infrastructure renewal plan.
In an interview with Fox News, Pskai said, “When the president advocated for the American Rescue Plan, he talked about this being two stages: rescue then recovery. What the American people will hear from him this week, is part of his plan, the first step of his plan toward recovery which will include an investment in infrastructure,”
President Biden recently signed into law a $1.9 trillion stimulus plan to address the economic effects of the pandemic, ranging from relief checks for all Americans earning less than $75,000 per year, expanded unemployment benefits, transfers to the states, and a budget to support a nationwide vaccination plan.
“He’s going to have more to say later in April about the second part of his recovery plan, which will include a number of the pieces you talked about: health care, child care, addressing that. It’s a crisis right now, the number of women who have left the workplace,” Psaki said referring to President Biden. The amount of the next plan has not yet been defined.
Psaki also clarified that the second stimulus plan and the infrastructure plan are two different bills. Biden is expected to detail the infrastructure plan on Wednesday in Pittsburgh.
The spending dimension of Biden’s agenda will involve running higher deficits and raising taxes
Some economists are alarmed by the amount of money released into the economy by the $1.9 trillion stimulus plan and the Federal Reserve, under the guise of “pulling the U.S. out of the crisis.” Many analysts are skeptical about the actual impact of the current stimulus plan on economic growth.
Other criticisms of the stimulus plan include the widening of the U.S. deficit. Public debt currently totals more than 102% of U.S. GDP and according to the CBO is expected to reach 202% of the size of the economy if it continues to grow at the current rate. Currently, the U.S. debt stands at 28 trillion.
The infrastructure plan is estimated to cost around $3 trillion and will be divided into two parts: the first part will focus on the renovation of the physical infrastructure of the United States, which will involve the construction of new roads, bridges, the implementation of renewable energies, and the construction of more than 1.5 million new homes.
The second part of Biden’s infrastructure plan will focus on human capital and is expected to increase transfers to community colleges, schools, and tech programs.
The cost of Biden’s program is not minor, and the White House is also expected to launch a bill to reverse his predecessor Donald Trump’s tax reform, the “Tax Cuts & Jobs Act,” and raise the tax burden on individuals and corporations.
Among the changes that the administration’s tax reform plans to implement are an increase in the income tax on Americans, an increase in the profit tax, and increases in the capital gains tax.