Biden’s American Families Plan Must Be Paid For
For Immediate Release
The White House today released details of President Biden’s “American Families Plan.” The plan proposes roughly $1.8 trillion over 10 years in spending and tax breaks for child care, education, health care, and other programs. It also includes $1.5 trillion of estimated offsets, through increased taxes on high-income households and improved tax enforcement. The administration says the American Families Plan and American Jobs Plan, combined, will be fully offset over 15 years. You can read our blog detailing what's in the American Families Plan here.
Below is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
The Biden administration deserves credit for committing to ultimately offset the cost of both the American Jobs Plan and American Families Plan, which will cost a combined $4.5 trillion over the next decade. Congress should follow the President’s lead, and do better by paying for new costs over a traditional 10-year budget window.
But we must not lose sight of the nation’s high and rising debt outlook even under current law. Simply paying for new initiatives won’t stabilize our fiscal trajectory. And the massive price tag of these proposals will make deficit reduction harder, since many of the most obvious deficit reduction measures will be used to pay for new costs.
The federal budget currently prioritizes seniors and adults over children. The President’s plan would address this imbalance by increasing spending on families and children, while increasing taxes on high earners and improving tax compliance so that more businesses and households pay the taxes they already owe.
But if we truly care about our kids, we must not leave them an unsustainable mountain of debt. Securing generational justice, ultimately, will mean restoring fiscal sustainability. This will require more than new revenue. Policymakers will also need to slow spending growth – especially by reducing health care costs and restoring trust fund solvency for our health care, retirement, and infrastructure programs.
The first step toward restoring fiscal sanity is paying for our priorities. As the President has proposed, Congress should ensure all new spending is fully offset. And rather than relying on a 15-year window, Congress should match new spending and offsets over the customary 10-year time frame.
This might mean shrinking the size of the packages, identifying additional offsets, or some combination. Similarly, if Congress dislikes some of the offset proposals put forward, it is incumbent on them to identify alternatives.
They should not resort to budget gimmicks or put the cost on the national credit card. Once the economy recovers, we should be working to reduce budget deficits, not increase them.
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