White House considers $3 trillion in spending

President Joe Biden speaks to members of the press on the South Lawn upon returning to the White House after a trip to Camp David, in Washington, March 21, 2021.

Erin Scott | Reuters

The White House will consider splitting an estimated $3 trillion economic recovery proposal into two bills, The New York Times reported Monday.

President Joe Biden aims to inject more money into the economy after this month’s passage of his top priority, a $1.9 trillion coronavirus relief package. His administration and congressional Democrats hope to revamp the country’s infrastructure, combat climate change and jolt an improving U.S. economy.

The president’s advisors will bring him a plan as soon as this week that would divide the recovery proposal into two planks, the Times reported. One would put money into boosting manufacturing, improving transportation systems, expanding broadband access and reducing carbon emissions, according to the newspaper.

The other would focus on reducing economic inequities through investments in paid leave, universal pre-K and community college, the report said. Biden is expected to pursue the infrastructure component first.

It is unclear now whether Republicans would back either piece of Biden’s recovery plan. The GOP has generally opposed the president’s plans to hike takes on corporations and the wealthiest Americans to pay for the initiatives.

The Dow Jones Industrial average hit an intraday high Monday, up more than 110 points after the Times report. The reported price tag for Biden’s plan is bigger than what most Wall Street firms including Goldman expected, as most saw a roughly $2 trillion infrastructure package. Shares of Caterpillar traded higher following the news.

Spokespeople for the White House, Senate Majority Leader Chuck Schumer, D-N.Y., and House Speaker Nancy Pelosi, D-Calif., did not immediately respond to requests to comment.

CNBC Politics

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Though politicians on both sides of the political aisle agree that U.S. infrastructure needs repair, they have not come to a consensus over which items to pay for and how best to finance the massive undertaking.

Some moderates, including conservative Democrat Sen. Joe Manchin of West Virginia, have made it clear they will only vote for a plan that makes a genuine attempt at bipartisanship and is nearly entirely paid for. Democrats approved the pandemic aid package on their own through budget reconciliation, and some members of the caucus have supported using the process to pass an infrastructure plan.

Biden met with bipartisan senators about infrastructure earlier this month. A group of 20 senators from both parties also reportedly met last week about how to proceed on the next major policy initiative in Congress.

During his presidential campaign, Biden said he would be open to raising taxes to pay for various agenda items. At the time, Biden supported increasing the corporate tax rate to 28% in what would amount to a partial rollback of President Donald Trump’s landmark 2017 tax cuts.

Biden has also endorsed increasing the top marginal tax rate to 39.6% and taxing capital gains and dividends at the higher ordinary income tax rate.

Read the full Times report here.

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