After Paid Leave Plan Gets Chopped, Biden Promises Revamped Spending Proposal

After Paid Leave Plan Gets Chopped, Biden Promises Revamped Spending Proposal

Democrats appear likely to abandon plans to include an expensive new federal entitlement program—paid family leave—as they try to trim the overall cost of President Joe Biden’s “Build Back Better” plan proposal.
Biden’s plan called for a federal paid leave program that would replace up to 85 percent of a worker’s pay (with that percentage falling for higher-paid workers) for up to 12 weeks per year. Workers could access the paid leave program if they were having a baby, taking care of an elderly or sick relative, or recovering from a serious illness of their own.
There has not been an official Congressional Budget Office assessment of how much the paid leave program would cost, but a similar stand-alone proposal drawn up by Democrats in 2019 carried a $547 billion price tag over 10 years. That made the paid leave proposal one of the more expensive heaves in Biden’s proposal. Even after Democrats tried to trim the benefits by reducing the timeframe to just four weeks instead of 12, the price tag was still over $300 billion, Politico reported earlier this month.
Ultimately, the high cost is what seems to have doomed that aspect of Biden’s plan.

???? Senate Democrats have decided to drop paid family and medical leave, a key cornerstone of Joe Biden’s presidential campaign, from their mammoth social spending package Wednesday after attempts to drastically pare it down were deemed insufficient, three sources tell me.
— Eleanor Mueller (@eleanor_mueller) October 27, 2021

The problem facing Democrats right now is rooted in basic budget math of the kind that usually gets ignored in Washington. Sen. Joe Manchin (D–W.Va.) has said he is worried about the trajectory of the national debt and will not support a social spending plan that relies on more borrowing. Without his support, Democrats do not have a majority in the Senate. So the plan has to include enough revenue offsets to pay for the proposed new spending—or, at least, pay for them sufficiently to satisfy Manchin.
But Democrats keep backing away from the sorts of large-scale tax increases necessary to pay for a $3.5 trillion spending plan—like the proposed “billionaire tax” on unrealized capital gains that reportedly got axed on Wednesday. As Reason’s Peter Suderman explains, that tax was a terrible idea (and maybe even an unconstitutional one), but discarding it reveals something about the underlying negotiations o …

After Paid Leave Plan Gets Chopped, Biden Promises Revamped Spending Proposal
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