Friday, December 3

Social and climate protection: Biden drastically cuts investment package

According to his plans, expenditures of 1.75 trillion US dollars (1.51 trillion euros) are now planned, as reported from the White House in Washington. Originally, Biden had targeted a package that was twice that size, valued at $ 3.5 trillion. Moderate Democrats, however, had resisted such high spending and forced the president in months of negotiations to say goodbye to parts of his plans.

The White House employees expressed their confidence that the necessary majorities would now come about in both chambers of congress for the slimmed-down package. An official agreement with the various party wings of the Democrats has not yet been reached. Biden specially visited the Democratic parliamentary group in the House of Representatives on Thursday to personally campaign for approval of the compromise package. Such visits by the President to Congress are rare.

Biden: “Historically”, but with restrictions

After visiting Congress, Biden also publicly commented on his plans on Thursday – just before he left for Europe, where he will take part in the G20 summit in Rome and the World Climate Conference (COP26) in Glasgow in the coming days . In his speech, Biden described the economic framework as “historic”, although he admitted that “nobody got everything they wanted”. And Biden added: “Not even me.”

Reuters/Jonathan Ernst

Biden speaking at the White House on Thursday

Climate protection should also play an important role at the G20 meeting. Biden and the White House had therefore intensified their efforts in the past few days to reach an agreement on the social and climate package before the European trip in order to be able to show something internationally.

Focus on social issues

The 1.75 trillion package includes, among other things, $ 555 billion in investments in the fight against the climate crisis, including investments in renewable energies and tax incentives for the purchase of e-cars. The heart of the package, however, is social: Among other things, there are plans to reduce the – up to now sometimes horrific – childcare costs for many families in the country and partly to be taken over entirely by the state, to relieve families of tax and to expand health services.

The package is to be financed through tax increases for corporations and top earners as well as through the more consistent collection of due taxes. The White House expects around two trillion dollars in new revenue – a little more than the cost of the package.

Infrastructure package as a means of pressure

Various plans that Biden had originally included in the package fell out, including his significant plan to introduce twelve weeks of paid parental leave, as well as other improvements in health care. These are things that progressive Democrats hold dear. As a means of pressure, they threatened to block a large-scale infrastructure package that Biden had also initiated, which has already been approved by the Senate but still needs the approval of the House of Representatives.

US President Joe Biden, Nancy Pelosi and Steny Hoyer arrive at the Capitol

WHAT/AFP/Mandel Ngan

Biden and Nancy Pelosi, US House Chairpersons, in Washington on Thursday

The aim of this package is to modernize the country’s infrastructure. Around 550 billion US dollars in new investments are planned over the next few years. In total – including previously budgeted funds – this package is worth more than a trillion dollars.

Dependent on internal unity

The two packages are central domestic political projects for Biden during his tenure – and in view of the internal party struggles among the Democrats, they are politically linked. Biden’s Democrats have very narrow majorities in both chambers of Congress, so the president has to close his own ranks.

With the congressional election approaching next year, halfway through his term in office, time is generally of the essence for Biden to push through his core concerns while the Democrats are in charge of Congress. At least in the Senate, there is a risk of losing the majority in the 2022 election.

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