The latest proposal in Biden’s economic agenda would spend
another $1.8 trillion, mostly on education, child care, and family and medical leave programs, but that would be on top of
$2.3 trillion in proposed infrastructure investment and the $1.9 trillion that Congress passed in March as an emergency response to the pandemic.
Here's what is in Biden's American Families Plan
The biggest concern is that the economy will overheat from so much stimulus, triggering rapid price increases that would make it difficult for middle-class families to afford goods and force policymakers to slow growth to contain inflation. Already there are pockets of concern, with used-car prices
up nearly 10 percent and meat, including beef and pork chops,
up almost 6 percent over the past year.
To pay for this new spending, Biden wants significant tax increases on the wealthy and corporations, but some economists and business leaders warn this has the potential to backfire. Higher taxes can stymie new investment in the private sector, curb enthusiasm for starting new businesses and even push existing U.S. companies to move overseas.
Separately, some economists worry that spending so much to strengthen the government safety net, especially along with increased unemployment aid, has the potential to dissuade some lower-income workers from working, especially those in lower-paying jobs that continue to dominate much of the service sector.
“The philosophy behind the Biden administration is everyone can have more. We can have the cake and eat it, too. There is no price to pay in terms of inflation, higher interest rates or slower growth,” said Sung Won Sohn, a professor of finance and economics at Loyola Marymount University and a former bank executive. “If they are wrong, the price tag will be pretty high.”