Biden’s promise of greater equality in jeopardy with spending plan

President Joe Biden’s promise to reduce income and wealth disparities in America has suffered a major setback with the collapse of his social spending bill.

At the beginning of the pandemic, US lawmakers prevented a dramatic increase in inequality with a full fiscal response. Biden’s legislation aimed to extend that achievement by implementing an approximately $ 2 trillion program in investments focused on child care, health care and early education, providing benefits to low-income, funded Americans in partly due to tax increases for the richest.

But the bill called “Build Back Better“Is now effectively frozen after the Democratic senator Joe Manchin, from West Virginia, whose vote is essential to passage of the bill, said it would not support it.

The defeat for the White House comes as the spread of the omicron variant of COVID-19 weighs on the economy and the Federal Reserve turns to raising interest rates to contain inflation. It also threatens to become a double whammy for an economy still in the midst of a pandemic hitting low-wage jobs hardest.

Reduce the amount allocated to the agenda Biden presents the risk of widening the gaps the president and his Democrats promised to address, according to Shawn Fremstad, Senior Policy Researcher at the Center for Economic and Political Research in Washington.

Child tax credit

A key part of the program Biden is expanding a tax credit for families with children that has provided $ 93 billion to American households this year, and helped many Americans, particularly working mothers and low-income people, return to the job market. The Treasury Department issued the last round of checks on December 15 and the renewal of the program was included in the plan of Biden.

Manchin has said that higher government spending could worsen the outbreak of pandemic inflation that is hitting family budgets. But the lack of extension of the policy could prevent millions of children from climbing out of poverty and affect the economy more broadly, according to Brett Ryan, senior US economist at Deutsche Bank Securities In New York.

Expanding the child tax credit would reduce child poverty by roughly 40%, disproportionately helping black and Latino households, according to estimates by the Center for Budget and Policy Priorities.

Officials have emphasized that lower rates of early childhood education set Americans back and the lack of affordable child care and home health care prevents them from entering the labor market or taking higher-skilled jobs.

The bill of Biden, which proposes free and universal preschool education, as well as greater access to health care, would address these problems in which the United States is falling behind the curve, according to Cecilia Rouse, who chairs Biden’s Council of Economic Advisers.