Rather than abolishing student debt, which would disproportionately help wealthy families, Mr. Biden proposed boosting Pell Grants, which assist low-income students, and making two years of community college free. Meanwhile, his plan would enable parents to stay in the workforce by, for example, guaranteeing that low- and middle-income families do not pay more than 7 percent of their incomes on child care for children under 5.
The United States is an outlier among developed countries in lacking a paid family and medical leave program, forcing workers to quit their jobs in the event of major life disruptions. Mr. Biden’s plan would guarantee Americans 12 weeks of paid leave in case of personal illness, the sudden sickness of a loved one or the birth of a child. The president also proposed making permanent an expansion of Affordable Care Act health-care subsidies, which help Americans maintain coverage if they move jobs or start businesses. And he wants to keep an expansion of the earned-income tax credit, a successful bipartisan program that tops up wages for low-income workers.
Mr. Biden rightly identified new tax revenue to offset the cost. He would boost funding for Internal Revenue Service enforcement against large companies, wealthy taxpayers and big estates, and restore the top marginal income tax rate to 39.6 percent. He would also tax capital gains at the same rate as income for people earning more than $1 million a year, and he would close a big loophole that helps wealthy heirs.
But, yes, there is a catch or two.
Democrats worked to slash child poverty in their last coronavirus aid bill by expanding the child tax credit. Mr. Biden proposed keeping the expanded credit only until 2025, probably because making it permanent would be very expensive. Fighting child poverty should take precedence over free community college, and if Democrats expect to continue the expanded credit beyond 2025, they should budget for it now.
Even after limiting child tax-credit spending, the taxes the president proposed would not cover the whole cost of his plan over 10 years. In theory, tax hikes from his previously proposed infrastructure plan could fill the gap in later years, but only if Congress allows the programs with expiration dates to end and new tax increases to remain in place permanently. Moreover, it is unclear whether the amount Mr. Biden proposed spending on Wednesday would be enough to guarantee quality child care, paid leave and other promised benefits.
Mr. Biden pledged not to raise taxes on anyone making less than $400,000 per year. Meantime, the federal government is running huge deficits, even as new census numbers show that the United States is aging and population growth is slowing, which will strain already expensive federal old-age programs. Climate change, future recessions and other issues may require emergency spending on a scale policymakers cannot anticipate. Though many in Washington have set aside concerns about the debt, the nation is still entering uncharted fiscal territory.
Mr. Biden can keep his tax pledge or create a strong, sustainable federal safety net. He probably cannot do both.