On Friday, May 28, 2021, President Joe Biden proposed a $6 trillion budget as part of his administration’s ongoing effort to restructure the American economy. From the American Jobs Plan and the American Families plan to so much more, here’s what employers need to know about the budget proposal.
The New York Times reported on Friday, May 28, 2021, that President Biden proposed a $6 trillion budget that “would take the United States to its highest sustained levels of federal spending since World War II.” This proposal is for fiscal year 2022 and includes spending and tax plans that, if approved, will impact the economy through the next decade. It includes major investments in infrastructure, education, jobs, and more.
Bolstered by the previously announced American Jobs Plan and the American Families Plan, the new budget will be funded by increasing taxes on corporations and high-earning taxpayers. As CNBC put it, one of the primary goals of this approach is to expand the country’s social safety net for working families and modernize its infrastructure.
The American Jobs Plan is a policy proposal that was issued by the Biden administration on March 31, 2021. According to the fact sheet issued by The White House, this policy proposal plans to invest in projects that improve critical infrastructure, the workforce, and other key components of the economy.
If passed, The White House estimates the proposed plan will invest about 1% of GDP per year over the next eight years and cost approximately $2.3 trillion. Some of the most notable propositions in the plan include:
Announced in late April 2021, the American Families Plan (AFP) is a new policy proposal issued by the White House that plans to expand certain economic benefits for working parents and their children. The proposed investments include:
More broadly speaking, the AFP is part of the Biden administration’s approach to reshape and recharge the American economy. Other policy proposals like ARPA and the American Jobs Plan are designed to inject trillions of dollars into the U.S. system, from private industry to federal systems and more.
The proposed goal? To prepare American workers, families, industries, and infrastructure for the future.
What’s Next for Biden’s New Budget Proposal?
As AP acknowledges, this plan is only a proposal until Congress decides to implement it “through tax and spending legislation and annual agency budget bills.” Still, the Democrats hold a slight majority in both the Senate and House of Representatives, meaning that the White House can and probably will implement some of the proposed tax plans.
Congress won’t begin reviewing the budget until at least June 2021. With this in mind, employers and HR teams need to keep a close eye on budget developments, as some spending and taxation plans may impact staff or operations.
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