Biden announces 'The American Families Plan'

Plus, a reader question about Tim Scott's rebuttal.

I’m Isaac Saul, and this is Tangle: an independent, ad-free, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum — then “my take.” You can read Tangle for free or subscribe for Friday editions, and you can reach me anytime by replying to this email. If someone sent you this email, they’re asking you to sign up. You can do that by clicking here.


Today’s read: 12 minutes.

President Biden’s address, Sen. Tim Scott’s rebuttal, and the new American Families Plan


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Quick hits.

  1. Congressional Democrats are pushing Biden to expand Medicare as part of his $1.8 trillion American Families Plan, a move that the White House does not support. (The Washington Post, subscription)

  2. The U.S. economy grew at a 6.4% annual rate in the first quarter, a rapid three months of growth that means it is approaching its pre-pandemic size. (The Wall Street Journal, subscription)

  3. A grand jury has charged three Georgia men with federal hate crimes and attempted kidnapping in the death of Ahmaud Arbery. (NPR)

  4. The F.B.I. executed search warrants and seized the cell phones and computers from the office and apartment of Rudy Giuliani, former President Trump’s lawyer, in an investigation into Giuliani’s dealings in Ukraine. (The New York Times, subscription

  5. Texas is moving to ban retail electricity providers from offering the kinds of plans that led to widespread blackouts earlier this year. (Bloomberg, subscription)


What D.C. is talking about.

Biden’s address to Congress and The American Families Plan. Last night, President Biden used his nationally televised address to announce The American Families Plan, a bill to authorize $1.8 trillion in spending over 10 years. It consists of one trillion dollars in investment and $800 billion in tax cuts, according to the White House fact sheet. Taxes will be increased on individuals earning more than $400,000 a year to pay for the plan, and focuses on education and child care. The main components of the plan would:

  • Provide an additional four years of free education (two years of community college and universal preschool to three- and four-year-olds)

  • Provide direct support to families so no low or middle-income family will spend more than seven percent of their income on child care, as well as creating a national, comprehensive paid family and medical leave program

  • Extend the Child Tax Credit, the Earned Income Tax Credit and the Child and Dependent Care Tax Credit, which were all passed in the coronavirus rescue plan

In his speech to Congress, Biden framed the plan as a necessary step to keep up with global competition.

“The rest of the world isn’t waiting for us,” he said. “Doing nothing is not an option. We can’t be so busy competing with each other that we forget the competition is with the rest of the world to win the 21st Century. To win that competition for the future, we also need to make a once-in-a-generation investment in our families — in our children.”

Below, we’ll take a look at some reactions to the plan and Biden’s address.


What the right is saying.

The right is opposed to the plan, arguing that Biden is continuing to push for a radical government expansion.

The Wall Street Journal editorial board wrote “it’s more accurate to call this the plan to make the middle class dependent on government from cradle to grave.”

“But the cost, while staggering, isn’t the only or even the biggest problem,” they wrote. “The destructive part is the way the plan seeks to insinuate government cash and the rules that go with it into all of the major decisions of family life. The goal is to expand the entitlement state to make Americans rely on government and the political class for everything they don’t already provide…

“One question to ask is: Haven’t we tried this before?” the board wrote. “What is Head Start if not government pre-school education and child care? Weren’t school lunches and the Women, Infants and Children program supposed to prevent child hunger? Food stamps, welfare checks, child-care subsidies and a supplement to earned-income, plus public housing. Weren’t all of these programs and more from previous decades supposed to end poverty? Why did the trillions of dollars spent on those programs fail? And if they didn’t work, why do we need more?”

In the National Review, Jim Geraghty said you really can’t keep track of Biden’s trillion-dollar spending plans without a scorecard.

“Biden wants to spend an additional $6 trillion beyond what the federal government would ordinarily spend,” he wrote. “That’s about a third of the entire U.S. economy, all on top of the $4.4 trillion the government spent in 2019, the last non-pandemic year. I don’t know if we’re about to endure a sudden and lasting surge in inflation; the Capital Matters guys can sort that out better than I can. I do know that the Consumer Price Index had its biggest jump in about a decade last month, and the overall price index is up 2.6 percent from a year earlier. In the past month, gas prices are higher, natural gas and energy costs are higher, and food prices are higher, both at home and in restaurants. You may have noticed that suppliers are scrambling to find lumber and semiconductor chips. It sure feels like inflation is making a comeback.”

In Reason Magazine, Eric Boehm pointed out that progressives still weren’t happy, and cited Rep. Jamaal Bowman (D-NY), who immediately responded to Biden’s address by insisting the plans “don't go as big as we'd truly need in order to solve the crises of jobs, climate, and care.”

“Bowman's response illustrated the extent to which the progressive image for America is one in which government has greater control over just about every aspect of life,” Boehm wrote. “Biden has already embraced the governing-by-crisis approach and has adopted other progressive ideas into his first-year agenda. Like Bowman, Biden called for passage of the Protecting the Right to Organize (PRO) Act, a union-backed bill that would kill state-level right-to-work laws and force workers in some professions to contribute to unions whether they want to join or not. Like Biden, Bowman suggested that billionaires should be targeted with higher taxes because they've seen their wealth increase during the pandemic.

“Still, progressives are unlikely to be satisfied with Biden's agenda no matter how aggressively profligate it gets,” he added. “That's in their nature. What's more worrying is how far they've already managed to push Biden—with the notable exception of criminal justice reform—and how much more they intend to squeeze out of him.”


What the left is saying.

In Slate, Jordan Weissmann wrote that Biden is just “trying to make the U.S. a normal country that isn’t horrible for parents.”

“The proposal is largely aimed at helping parents while broadening the scope of public education,” he writes. “It aims to finally guarantee paid family and medical leave, cap the outrageous cost of child care for middle-income families, make prekindergarten universally available for 3 and 4 year olds, and make community colleges tuition-free. It would also lengthen the life of two major but temporary pieces of Biden’s coronavirus relief bill: The expansion of Obamacare’s health insurance subsidies would be made permanent, while the supersized Child Tax Credit, which has the potential to cut youth poverty in half, would be extended until 2025 (and the new eligibility rules that allow America’s poorest families to claim it would become permanent).

“We are, after all, the only wealthy country that doesn’t ensure paid leave for new moms,” Weissman added. “Child care? It’s already heavily subsidized in places like Japan, France, Korea, Germany, Australia, and the Nordics, but here the cost often rivals college tuition. We trail most of our peers in pre-K enrollment, likely because—according to the Organisation for Economic Co-operation and Development—they often spend a lot more public money on it. While the idea of just giving money to poor families, in the form of a child allowance, may seem novel here, countries like Canada started doing it a while ago. In fact, if you add up our total expenditures on cash benefits, tax breaks, and services for families as a share of the economy, we’re third to last among countries tracked by OECD, just ahead of Mexico and Turkey.”

In The New Republic, Natalie Shure wrote that Biden is “blowing a big moment for Medicare.”

“The $1.8 trillion plan, details of which were released Wednesday morning, calls for $200 billion in additional Affordable Care Act subsidies,” she wrote. “It does not propose lowering Medicare’s eligibility age or expanding Medicare benefits. It appears that Biden isn’t up for a fight with the health insurance lobby. But now he may have a fight within his ranks in Congress: Senator Bernie Sanders told reporters that the two Medicare provisions will be in the bill, ‘if I have anything to say about it.’

“Sanders is among an ideologically mixed group of 17 senators and over 80 representatives who back an expansion of Medicare over an expansion of ACA subsidies,” Shure added. “Biden was even on board with the idea as recently as November, when he vowed to lower the eligibility age from 65 to 60. And why wouldn’t he support it? After winning back the White House and the Senate, Democrats are in a position to achieve the greatest expansion of Medicare since its enactment. Not only is the program wildly popular with the public, relative to its for-profit peers as well as the ACA writ large, it’s also more cost-efficient.”

The Washington Post editorial board said the plan had “pros and cons,” but was supportive of how Biden approached some divisive issues for the left.

“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,” the board wrote. “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… 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.”


My take.

There are a few things worth taking note of here.

One, Biden’s child tax credit — which effectively creates a small universal basic income for anyone with kids in a certain tax bracket — is being extended through 2025 in this plan. That’s probably because if Biden lays out a plan to extend it any longer, it gets a lot more expensive. The whole timeline is a little weird: it’s a “10-year plan,” but not everything starts on Day 1 or lasts 10 years. The White House isn’t guaranteeing that the paid family and medical leave will last 10 years into the program, it could take years to get the universal pre-K off the ground, and child tax credit expires the year after Biden’s first term ends (in four years). So the biggest parts of this plan combine to span 10 years for this plan, but are not 10-year plans themselves.

Two, there is still some debate about the effectiveness of child care subsidies and their impact on women in the workforce. Jordan Weissman touched on this extensively: it’s true that for American women between the ages of 25 and 54, the employment rate in 2019 was 73.7 percent, which is below the average for many European countries (some easily clear the 80 percent mark). It’s also true that the mainstream economic view still holds that subsidizing paid family leave increases the percentage of women in the workforce. But there is some dissent there, too, and it’s worth considering the possibility this bill does nothing to increase the rate of women in the workforce, but greatly improves the quality of life for mothers who are already working. For me, that’s still well worth the price tag. But I think it’s important to consider that we might get one of those benefits and not both. 

Three, the taxes Biden is proposing would not cover the cost of this plan over 10 years. Full stop. He’d need both tax hikes in the infrastructure plan to pass and remain permanent, and he’d need the programs with expiration dates to actually expire (which Democrats aren’t planning to allow to happen). However much merit there is to the goals here, the numbers don’t add up. And the Biden administration is not going to be able to make this law — which requires moderate Democrats and Republicans to get on board — until they do. I’m torn on the IRS enforcement plan, which could boost revenue and reign in tax cheats, but could also just end up hammering the folks who have the worst accountants. 

All this being said, I’m generally supportive of the direction of the plan. It’s important not to conflate government assistance with government control, which I think Eric Boehm’s op-ed in Reason largely does. I share conservatives’ concerns about government overreach; I’m not sure how offering expansive paid family leave, funding for additional years of schooling and extending the child tax credit qualify.

My sister-in-law-to-be just had a baby in November, and imagining her going back to work after six or twelve weeks is hard to comprehend. Forcing mothers to choose between six-week-old babies and their jobs feels archaic and backward, and there’s no reason our country should accept that as good enough.

My fiancée, who moved on from a career in theater and is now getting her undergraduate degree, is planning to go to law school next year. The considerations we have to make about when we can have kids, or how motherhood will impact her career, or how to time pregnancy so she will not be out of the workforce, are pretty bonkers. And it’s largely due to the fact she gets no guarantee about what kind of maternity leave she’ll get — a guarantee millions of other women globally already have. Other developed, wealthy nations give parents up to six months of paid leave. Estonia offers a year and a half. Bulgaria, Hungary, Japan, Lithuania, Austria, Slovakia, Latvia, Norway and Slovenia all offer over a year. Biden is talking about a national standard of 12 weeks. We shouldn’t be balking at that.

I also wrote supportively of the child tax credit a few weeks ago. There’s significant bipartisan consensus about a plan that fundamentally allows us to cut child poverty and help parents with kids — and what Biden is proposing is a monumental step that I think is both a good use of taxpayer money and a long-term investment that will pay off.

As the Washington Post editorial board noted, abolishing the student debt seems like a far less efficient plan — and one that would predominantly help wealthier families — than what Biden is proposing here, which is making two years of community college free and boosting grants that go to low-income students. There are plenty of good questions about the efficacy of higher education, and whether it’s worth it, but there’s no doubt that college is still a ladder to higher incomes and a better quality of life, and that we need to make it more accessible.

Of course, the catch to every word above is the cost. Two weeks ago, in Tangle, I asked two mainstream economists about whether the debt matters. Their answers were fascinating and touched on the uncharted fiscal territory we are in. Bloomberg’s Noah Smith told me that these plans being paid for annually over 10 years makes it much more manageable if inflation arises, but there is real risk that’s still there. Later this spring, we’ll get new economic reports about inflation that could force the government to slam on the brakes or could open the floodgates for this kind of spending to get through. The truth is we really just don’t know if we’re in danger yet, but we need to make sure there’s an exit ramp if that time comes. 


Your questions, answered.

Q: Well… what did you think of Biden’s speech (Transcription here) and Tim Scott’s rebuttal (Transcription here)?

— David, Santa Cruz, California

Tangle: Biden’s speech was fine — a clear explanation of his vision and priorities, and a greatest hits from the campaign. There were a few surprises, and he made a strong case that his first 100 days were a success, largely outlining the accomplishments discussed in yesterday’s Tangle.

Honestly, though, I thought the most interesting part of the whole night was Sen. Tim Scott’s rebuttal. And not because it was substantive or better or incredibly compelling (it was some of those things), but because of what it said about what Republicans were expecting Biden to say.

Being the rebuttal to a presidential address is really difficult. Many speechwriters talk about it being one of the most challenging things to do because you have to both get your own message across and also predict what the president is going to talk about. In this case, I think Sen. Scott’s prediction was wrong.

Scott opened his speech by predicting that Biden would pitch unity again:

“President Biden promised you a specific kind of leadership. He promised to unite a nation. To lower the temperature. To govern for all Americans, no matter how we voted. That was the pitch. You just heard it again.”

But that’s not what Biden did. Instead, Biden delivered some pretty sober remarks about the legislative process: that Democrats and Republicans were working together on police reform and infrastructure, but that Biden wasn’t going to wait for consensus on his trillion-dollar packages given the urgency of this moment.

Sen. Scott also has a fascinating history and an inspiring family story: he’s the grandson of a poorly educated Black man who picked cotton as a child, and his family has gone from poverty to the middle-class while Scott himself has built a tremendously successful political career — all in a couple of generations. As the lone Black Republican in the Senate, he’s got heterodox views on issues of race and policing and he doesn’t fit neatly into any of the ideological, racial or class stereotypes we often make in America. Last night, he proclaimed “America is not a racist country.”

But that was another interesting thing about his speech: it was a response to something that didn’t come from Biden. The president focused very little on race or policing in his address, yet Scott spent nearly half of his speech attacking Biden on those themes, as he apparently expected them to be more directly addressed — he centered much of his address on racism and policing, or how America is not a racist country, or how the alleged racist voting laws in the South are not really racist. On Twitter, former Vox writer Matty Yglesias put it like this: 

That’s not to say Scott’s speech wasn’t effective on its own: I thought it was. He hit The Washington Post for their absurd “fact check” of his family history, contrasted the Trump-era bipartisan COVID-19 relief bills with what Biden has done with no Republican votes, insisted he is still attempting to work with Democrats on a major police reform bill, and spoke from personal experience about everything from voting in the South to the upsides of capitalism.

But in the end, the thing I was most struck by was what Scott thought Biden would focus on, and ultimately what he got wrong about that. 


Blindspot report.

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If you’re on the left, you probably missed a story about a new study showing the risk of contracting COVID-19 indoors is the same at six feet and 60 feet.

If you’re on the right, you probably missed a story about 130 migrants who died off the coast of Europe after their boat capsized.

Want to check out Ground News’s bias ratings, blindspot reports or other news sources? Click here.


A story that matters.

After some back-and-forth, the White House has finally clarified its position on the $400,000 threshold for tax increases: it applies to individuals, not families. President Biden has long said that he would not raise taxes on Americans who make less than $400,000, but there have been questions about whether that number applied to families or individuals — and the Biden administration has been giving different answers for months. Yesterday, though, they set in stone that their plan applied to individuals. Hypothetically, this means a married couple with each spouse making $399,999 a year would not see a tax increase. The plans for Biden’s tax hikes are starting to crystallize. (Axios


Numbers.

  • 6,045. The number of words in President Biden’s prepared remarks.

  • 8,074. The number of words in President Biden’s address, indicating the ad-libbed, repeated or improvised roughly 2,000 extra words.

  • $6.1 trillion. The combined amount of spending on the American Rescue Plan, American Jobs Plan and American Families Plan proposed by the Biden administration.

  • 89%. The percentage of speech-watchers who thought Biden was presidential, according to a snap CBS News/YouGov poll.*

  • 85%. The percentage of speech-watchers who approved of Biden’s remarks, according to a snap CBS News/YouGov poll.

  • 16%. The rate of new COVID-19 infections fell over the past week across the U.S., a major improvement after weeks of steady infections.

    *34% of Americans nationwide identified as Democrats in a recent CBS poll. Among those who watched the speech and responded to the poll, that figure is 54%, helping boost approval of the address.

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Have a nice day.

In the last year, flu cases worldwide have all but disappeared. While coronavirus has ravaged many parts of the globe, the efforts to slow its spread have led to the lowest flu levels we’ve seen in decades. “There’s just no flu circulating,” said Greg Poland, who has studied the flu at the Mayo Clinic for decades. “The U.S. saw about 600 deaths from influenza during the 2020-2021 flu season,” Scientific American reported. “In comparison, the Centers for Disease Control and Prevention estimated there were roughly 22,000 deaths in the prior season and 34,000 two seasons ago.”