WASHINGTON — When congressional committees meet this week to formally begin drafting Democrats’ ambitious social policy plan, they will undertake the most significant expansion of the country’s safety net since the war on poverty in the 1960s by enacting legislation that would touch the lives of virtually every American, from conception to ailment of old age.
The bill’s approval, which could cost as much as $3.5 trillion over the next decade, is anything but certain. President Biden, who has invested much of his domestic legacy on the measure’s entry into force, will need the vote of every Democrat in the Senate, and virtually everyone in the House, to secure it. And with two Democratic Senators, Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona, saying they wouldn’t accept such a costly plan, it will challenge Democratic unity like nothing has done since the Affordable Care Act.
That’s largely because the proposed legislation would be so transformative — a cradle-to-grave reweaving of a social safety net frayed by decades of growing income inequality, stagnant wealth and depleted government resources, capped by the worst public health crisis in a century.
The pandemic loosened the reins on federal spending, prompting members of both parties to overload the economy with aid. It also uncorked decades-old policy wishes — such as expanding Medicare coverage or paid family and medical leave — which Democrats argue has proven necessary as the country has been through the coronavirus crisis.
“Polls have long shown that these issues to support American families were important and popular, but suddenly they became not a nice to have but a must have,” said Heather Boushey, a member of the Council of Economic Affairs. Advisers to Mr. Biden, who has been developing such policies for decades.
Democrats say they will fund their spending through proposed corporate tax increases — which has already sparked a multifaceted, major budget effort by corporate groups trying to crush the idea — and by potentially taxing wealth in ways the United States has never attempted before. .
“We’re talking about free or affordable childcare where no one pays more than 7 percent of their income; we’re talking universal pre-K programs with two years of formal instruction; we’re talking two years of post-secondary education,” said New York Representative Jamaal Bowman, a former teacher and principal who serves as vice chair of the House Education and Labor Committee. “That’s how you build a strong nation.”
For the Republicans, who are preparing a counter-offensive, the Democratic plans are nothing less than socialism. They say they are concerned that the plan is financially unsustainable and would undermine economic growth by making Americans too dependent on the government for their basic needs.
“What are the Democrats trying to do to this country?” Arkansas Republican Representative Bruce Westerman asked Thursday as the House Natural Resources Committee began drafting its portion of the sprawling bill.
To understand the scope of the measure envisaged, consider a life, from conception to death. Democrats plan to fund paid family and medical leave so that a parent can take some time off during pregnancy and after the birth of a child.
When that parent is ready to return to work, comprehensive childcare funding would come in handy to help cover childcare costs. When that child turns 3, another piece of the bill, universal kindergarten, would allow public education to begin at a younger age, regardless of where that child lives.
Most families with children would continue to receive federal income supplements each month in the form of an expanded child tax credit temporarily created by Mr. Biden’s pandemic rescue bill and would be expanded by the new Social Policy Act. School feeding programs, which have been expanded on an emergency basis during the pandemic, would offer more children free meals at a discounted price long after the coronavirus pullout.
And upon graduation from high school, most students would be guaranteed two years of higher education through comprehensive federal financial aid centered on community colleges.
Even after that, income supplements and generous staff training programs — including specific efforts to train home health and aged care workers — would keep government presence in many adult lives. In old age, people would be helped by tax cuts to offset the cost of aged care and by an extension of Medicare to cover dental, hearing and vision services.
“Many of us believe this is the greatest opportunity we will have in our careers to do something structural and transformative for our economy,” said Virginia Democrat Donald S. Beyer Jr., “and we can do it.” not missing. .”
For critics, the legislation represents a fundamental shift in American governance and a shift towards social democracy. They worry that this would be accompanied by endemic European-style unemployment and depressed economic dynamics.
“There has always been a difference of opinion about the role of government in people’s lives, and the United States has long taken a different approach to Western Europe,” said N. Gregory Mankiw, a Harvard economist who chaired the study. the Council of President George W. Bush. of economic advisors. “This is clearly intended to be a big step towards the Western European model.”
Defenders shrug off such concerns. Representative Robert C. Scott of Virginia, chairman of the House Education and Labor Committee, said the legislation would boost economic growth, with childcare subsidies that would get parents back to work, education spending to make all Americans more fair at work. and vocational training to improve labor mobility.
“We are making the US economy more dynamic and globally competitive,” he said.
Besides, in the protracted struggle to balance economic growth with equity and equality, Democrats are poised to switch to the latter.
“The route we have taken has resulted in the concentration of wealth in the hands of a few people, while the rest have just struggled to survive,” said Mr Bowman. “It’s time to try something different.”
In a mechanical sense, the legislation isn’t as big of a change as the creation of Medicare and Medicaid in the 1960s, or Social Security in the 1930s. Even the Affordable Care Act of 2010 created an entirely new government infrastructure, a federally operated or regulated exchange where Americans could purchase private health insurance that must meet government restrictions on coverage and costs, Michael R. Strain noted, an economist at the conservative American Enterprise Institute.
In contrast, the new legislation would largely strengthen the existing programmes. Childcare would come to states, cities and counties through the Community Development Block Grant. Universal pre-K would be secured through block grants and extensive funding for Head Start. Two years of higher education should become accessible through more generous Pell scholarships and other existing financial aid programs
But if passed, Mr Strain said the legislation could fundamentally change the relationship between the state and its citizens: “Its ambition is in its scope.”
Most Americans have historically seen the federal government’s involvement in their finances once a year, during tax time, when they claim a child loan, get a write-off for the truck they may have bought for their business, or receive a check for a deserved raise. income credit, just to name a few.
That would change dramatically if the Social Policy Act were passed. The extended child tax credit has begun providing monthly checks up to $300 per child to millions of families, but is expected to expire in 2022. Extending it for as long as a decade could make it a regular part of life that would be very difficult for future conventions to take with them. The same goes for the Child and Dependent Care Credit, which now provides up to $8,000 in childcare costs, but also expires in a year.
And the federal government, not private employers, would pay most of the salaries of people eligible for family and sick leave.
“If we get this passed, people will see a lot more government contact points supporting them and their families in 10 years,” said Ms Boushey.
A major difference between the social economy that Mr. Biden and the Democrats in Congress hope to create and the welfare state in Europe is how it would be paid for. Most European countries broadly ask their citizens to fund their social welfare programs largely through a value-added tax, a sales tax levied at every stage of the production of a consumer good.
At the urging of the president, the House and Senate tax committees must fund the bill’s spending through taxes on corporations and individuals with incomes over $400,000 a year.
To that end, the Senate Finance Committee is considering groundbreaking ways to tax wealth, including changing the way estates are taxed so that heirs have to pay more taxes on inherited assets.
The commission is also looking at taxing billionaires’ accumulated wealth — things like homes, boats, stocks and other assets whether or not they’re sold — a new frontier of tax policy that would be hard to reach. Senator Ron Wyden of Oregon, chairman of the finance committee, said such measures are the only way to ensure that the super-rich pay their fair share of taxes each year.
“I’m going to bring the caucus into that discussion, but I think billionaires should pay taxes every year, just like nurses and firefighters do” out of every paycheck, Mr. Wyden said.