President Joseph R. Biden
April 28, 2021
On April 28, 2021, the 99th day of his presidency, President Biden gave his first address to the joint session of Congress. Historically, the first address of a President’s term to the joint session is not called a “State of the Union”. In his address, Biden unveiled the latest policy proposal of his Build Back Better initiative, the American Families Plan. He empathized with the grief felt by so many due to missing loved ones, and highlighted efforts his administration is taking to combat the pandemic and hasten the return to normal. He highlighted the precipice the country is on, with tremendous opportunity for innovation and increasing American competitiveness, the ability to win the future through good jobs, advanced technologies, and clean energy. Yet he noted the great challenge posed by autocratic nations like China, who predict that democracies cannot compete because they cannot build consensus. Biden stressed the importance of proving, to both international and domestic audiences, democracy still works and the government can still deliver for the people. He framed the actions of his first 100 days as efforts to restore the people’s faith in democracy to deliver through real results people can see and feel in their lives, like vaccinations, job creation, opening the doors of opportunity and guaranteeing fairness and justice.
Addressing the COVID-19 Novel Coronavirus Pandemic
Biden highlighted the 200 million vaccine shots distributed so far, with vaccines available at nearly 40,000 pharmacies, and 7,000 community health centers. He highlighted that 95% of Americans live within 5 miles of a vaccination site and called on every American over the age of 16 to go get vaccinated. He highlighted that 70% of seniors are fully vaccinated, deaths from COVID in seniors have decreased 80% since January, and more than half of adults in the US have received their first shot. He stated the efforts to address COVID-19 and deploy vaccines equitably in the past 100 days has been one of the greatest logistical accomplishments in the nation’s history.
Economy and The American Jobs Plan
Biden highlighted that 1.3 million new jobs were added in his first 100 days. He stated that thanks to steps in the American Rescue Plan, the IMF now predicts the economy will grow more than 6% this year, the fastest pace of growth in the US in nearly 40 years. He highlighted that the American Jobs Plan is a once-in-a-lifetime investment in America, the largest jobs plan since WWII. He stated he will create jobs through updating infrastructure, expanding broadband, modernizing roads, building ports, and constructing rail corridors and transit lines. He highlighted the American Jobs Plan will help people return to the workforce and emphasized that all investments in the American Jobs Plan will be guided by the principle of “Buy American.” He called the American Jobs Plan a blue-collar blueprint to build America, noting that 90% of the infrastructure jobs created not requiring a college degree, and 75% not requiring an associate degree. Biden also noted the opportunities for confronting the climate crisis, from construction of charging infrastructure on highways to farmers planting cover crops to absorb CO2 and get paid for it. He highlighted that the American Jobs Plan will also bring the biggest increase in non-defense R&D on record. Biden stated that Vice President Harris will lead the American Jobs Plan effort.
Biden advocated for increasing the minimum wage to $15/hour. He highlighted proposals to update the tax rate back to 39.6% for the wealthiest 1% of Americans, those making $400,000 a year or more. He stated that no tax increases will be imposed on anyone making under $400,000 a year. Biden stated he will eliminate loopholes for capital gains for Americans making more than $1 million a year and will strengthen the IRS so it cracks down on millionaires and billionaires who cheat on taxes. He stated that trickle-down economics has not worked, so his proposal is to grow the economy from the bottom-up and the middle-out.
Supporting Families and The American Families Plan
Biden highlighted that the American Rescue Plan delivered food and nutritional assistance to millions of Americans, it provided rental assistance to prevent evictions, and it provided loans to keep small businesses open and their employees on the job. He highlighted that the American Rescue Plan is projected to cut child poverty in half this year. He noted that the American Families Plan builds on these efforts. He stated the American Families Plan will provide two years of free pre-school education, and two years of free community college, as well as increasing Pell Grants and investments at HBCUs and other minority-serving institutions. American Families Plan ensures low- to middle-income families pay no more than 7% of their income for childcare and provides up to 12 weeks of paid family and medical leave. It extends the Child Tax Credit through the end of 2025, and permanently extends reductions in the Affordable Care Act (ACA) premiums. Biden said that beyond the American Families Plan he will work with Congress to lower deductibles for families on the ACA and lower prescription drug costs by allowing Medicare to negotiate lower prices for prescription drugs. Biden highlighted that these efforts will help American families achieve success and enable America to better compete to win the future.
Biden noted that on day one of his presidency, he sent an immigration reform plan to Congress that provides a path to citizenship and enhances border security. He stated the US must address the root causes of people fleeing such as violence, corruption and instability in Honduras, Guatemala, and El Salvador. He stated Vice President Harris will oversee the program addressing these root causes. He called on Congress to pass legislation to protect Dreamers and those here on temporary protective status, and a pathway to citizenship for farmworkers.
Biden called on all Americans to come together to heal the soul of the nation. He stated that all have seen the knee of injustice on the neck of Black America, calling now an opportunity to make progress. He said that most men and women in uniform serve their communities honorably, and want to meet the moment as well, calling for rebuilding of trust between law enforcement and the people they serve to root out systemic racism in the criminal justice system. He asked Congress to enact police reform in George Floyd’s name, calling for it to get done by next month, the first anniversary of George Floyd’s death.
Biden highlighted that gun safety reform is possible, noting the ban on assault weapons and high-capacity magazines in the 1990s. He stated he will do everything in his power to act on gun violence, but it is time for Congress to act as well. He called for ending the “boyfriend” loophole, and noted Department of Justice (DOJ) actions, including banning so-called ghost guns. He called on Senate Republicans to join with Democrats to close loopholes and require background checks. He asked Congress to ban assault weapons and high-capacity magazines.
Biden noted the competition with China, stating that he has been clear with President Xi Jinping of China that the US will stand up to unfair trade practices that undercut American workers and industries. He stated that he told President Xi that the US will maintain a strong military presence in the Indo-Pacific, just as the US does in Europe with NATO, to prevent conflicts, not start them. Biden stated that with regard to Russia, he has made it clear to President Putin that while the US does not seek escalation, it will respond. Biden stated he responded in a direct and proportionate way to Russia’s interference in US elections and its cyberattacks on the US government and American businesses. Biden stated that Iran and North Korea’s nuclear programs remain a serious threat to US and international security, and the US will work with allies to address these threats with diplomacy and stern deterrence. Biden stated that after 20 years of valor and sacrifice, and after successfully bringing justice to Bin Laden and degrading the threat of al Qaeda, it is time to bring US troops home. Biden repeatedly emphasized that autocrats like China view the January 6th insurrection as the sunset of American democracy and that America has been overcome by lies, anger, hate, and fears. He also said that democracies are unable to meet 21st century challenges because of their inability to find consensus and deliver. Biden stated that these people are wrong, but that everyone needs to prove them wrong, by showing that the government still works and can deliver.
Current Legislation Supported by the White House
President Biden specifically called on Congress to pass H.R.1 – For the People Act, the John Lewis Voting Rights Act, the COVID-19 Hate Crimes Act, the Violence Against Women Act, the Protecting the Right to Organize (PRO) Act, and the Paycheck Fairness Act.
Summary of the Republican Response to the President’s Address to the Joint Session of Congress
Senator Tim Scott (R-SC)
April 28, 2021
South Carolina Senator Tim Scott gave the Republican response to the President’s address. He stated that while President Biden’s words aim to “lower the temperature” his actions and policies have further divided the nation. He stated the American Rescue Plan failed to continue the trend of bipartisan COVID-19 relief. Scott expressed the need for common sense and grounded policies to bridge the nation’s opportunity gaps. He related his upbringing and personal story of being raised by a single mother and being African American to various policies such as criminal justice reform and economic opportunity. Scott endorsed the idea of school choice, after stating that school closures during pandemic have further hurt children. Also, he emphasized that the American Jobs Plan would provide less than 6% for traditional infrastructure funding for improvements to roads or bridges. He pivoted to state that the same filibuster being touted as being racist, is the same tool previously praised by former President Obama, President Biden, and utilized by his Democrat colleagues to block bills such as his broad criminal justice and policy body camera legislation. Scott pushed back on the notion that the voting rights bill passed by the Georgia legislature would harm citizens ability to vote. He said the bill would expand early voting and would curtail voter fraud. Lastly, he discussed some of the successes of the last Congress and former President Trump, such as the economy, low unemployment rates for African Americans, Latinos and women, tax cuts and opportunity zones, and the funding for Historically Black Colleges and Universities. In conclusion, Scott highlighted a theme that Biden’s policies and proposals are amongst the most liberal ideas pushed through Congress. He said that there is a misplaced trust in Washington D.C. He finished by saying that he is confident the American people can overcome divisions and the nation’s finest hour is yet to come.
Summary of the American Families Plan
Today the Biden Administration unveiled the “American Families Plan,” a proposed $1.8 trillion package supporting child care, education, and families. This is the second “infrastructure” package (the first was the American Jobs Plan released last month) and is sometimes referred to as the “soft” or “human” infrastructure component. Congressional leaders will begin drafting legislation reflecting its vision in the coming weeks, with the goal of passage by the summer.
What It Means
President Biden made clear that his administration’s first priority was addressing the COVID-19 pandemic – both combating the pandemic itself and providing economic relief for the American people. Congress passed the $1.9 trillion American Rescue Plan Act last month, fulfilling Biden’s call for action on that issue. With Congressional action on COVID complete (for the time being, at least), President Biden has called for Congress to pivot to investment in a national infrastructure package. Last month, President Biden unveiled the first of two parts of his infrastructure plan – the American Jobs Plan – which focused on transportation, water/electric/broadband, home care, capital improvements, and federal R&D, all paid for by changes to the corporate tax code.
Below is a nuts and bolts summary of the today’s American Families Plan. The fact sheet the White House provided includes significantly more narrative and details:
- Universal Pre-K for all 3 and 4 year olds
- National state partnership program- $200 billion – includes building the workforce and ensuring $15/hour wage to workers that participate in these programs
- College Affordability / Education Workforce
- Free Community College to all (including DREAMers) – $109 billion
- Increase maximum Pell Grant Awards by $1,400 and expanding eligibility to DREAMers
- Subsidize tuition for two years for families earning less than $125,000 at HBCUs, TCUs, and MCIs- $39 billion
- Expand grants aid to HBCUs, TCUs, and MCIs – $5 billion
- Increase scholarships, paid teacher residency programs, and teacher prep programs – $4.1 billion +
- Fund state programs to support teacher certifications – $1.6 billion
- Teacher mentorship programs – $2 billion
- Family Leave
- Federal paid family and medical leave – $225 billion
- 12 weeks by year 10 of the program
- 3 days bereavement leave
- Up to $4,000/month
- Federal paid family and medical leave – $225 billion
- Health Care
- Permanently extend the expanded ACA premium tax credits – $200 billion
- Make the summer EBT program permanent for all eligible children – $25 billion
- Expand school meals – $17 billion
- Healthy foods in schools demonstration – $1 billion
- Permit individuals with drug-related felony offenses to be eligible for SNAP
- Tax Cuts for Families/Workers
- Permanently extend the expanded Child Care Tax Credit and make it fully refundable and delivered regulatory
- Permanently extend the Child and Dependent Care Tax Credit established in the American Rescue Plan
- Permanently extend the expanded Earned Income Tax Credit for childless workers
- Pay fors
- Increase funding for the IRS to focus enforcement on large corporations, businesses, and estates, and higher-income individuals – $80 billion
- Require financial institutions to report information on account flows to track earnings from investments and business activity are subject to the type of reporting for wages.
- Provide the IRS authority to regulate tax preparers
Raising Income Taxes
- Return the top marginal tax rate to 39.6% from the 37%.
- Increase the tax rate on capital gains and dividends to 39.6% for households earning more than $1 million annually
- Increase the top tax rate from 37% to 39.6%
- Apply the 3.8% Medicare tax equally across all with incomes over $400,000
Changes to Unrealized Capital Gains at Death
- Require estates to pay taxes on unrealized gains on more than $1 million, or $2.5 million per couple (exemptions for family-owned businesses and farms to heirs who continue to run the business)
Hedge Fund Partners and Real Estate Investors Tax Break Changes
- Close the carried interest loophole to require hedge funds partners to pay ordinary income rates on capital gains.
- End a tax break that allows real estate investors to defer taxation when they exchange property for gains greater than $500,000
What It Means for You
Nothing is certain at this juncture. Today’s announcement is a plan, not legislative text, nor a bill passed into law. While the Democratic caucus is eager to take on this federal infrastructure investment, we shouldn’t jump to the conclusion anything announced will become reality.
The administration is looking to spend a lot of money, and the Congress may just put them in a position to do it. Much of the plan was predictable – universal pre-K, free community college, extending the Child Tax Credit, and raising taxes on high earners.
Specific to health care, the American Families Plan includes only one major provision: making permanent the enhanced ACA subsidies included in the American Jobs Plan Act. The materials suggest making this change will lower cost for 9 million people and lead 4 million more to gain coverage. However, the plan lacked pretty much anything else. The key sentence is here –
President Biden has a plan to build on the Affordable Care Act and lower prescription drug costs for everyone by letting Medicare negotiate prices, reducing health insurance premiums and deductibles for those who buy coverage on their own, creating a public option and the option for people to enroll in Medicare at age 60, and closing the Medicaid coverage gap to help millions of Americans gain health insurance.
The Plan does not go into any depth on these issues, likely because any more policy depth begins to create division among the Democratic caucus.
The administration is pitching this package as a long-term money saver: When combined with President Biden’s American Jobs Plan, this legislation will be fully paid for over 15 years, and will reduce deficits over the long term.
It will also be important to watch what restrictions Congress might put on any federal spending. The administration’s repeated focus on the need for unions and good-paying jobs suggest that there could be strings attached to the funding going out the door – and is already reflected in its universal pre-K proposal.
The real question is Congress. Democratic leadership impressed many observers by keeping the caucus together to pass the American Rescue Plan Act earlier this year – a sizable package of legislation. What the President announced with the combined Jobs and Family Plans would undoubtedly be a monumental test for that same leadership.
Expect to see pieces of the plan starting to be introduced in Congress. Earlier this week, W&M Chair Neal introduced the Building an Economy for Families Act which would effectuate the paid leave, Child Tax Credit, Child and Dependent Care Credit, and Earned Income Tax Credit pieces of the proposal.
Keep in mind – Congress has some must-dos and want-to-do’s this year. Senate Majority Leader Schumer is moving forward on Endless Frontiers. Progressives want to overhaul health care and drug pricing. COVID is still a thing. And let’s not forget they have to fund the government by October 1 (as it does every year). That’s an awful lot of gum to chew while “walking” on an infrastructure bill.
Underestimate President Biden, Speaker Pelosi, and Leader Schumer at your peril. But there is quite a bit of work to be done.
- Transcript of President Biden’s Address
- Transcript of Senator Scott’s Response
- The American Families Plan Fact Sheet
- White House Call – The American Families Plan