WASHINGTON – Top White House economic officials said Tuesday that President Joe Biden will announce how his administration is tackling economic issues – from the housing crisis to restoring the expansion of the child tax credit – during this week’s State of the Union address to Congress and the nation.
“Providing more breathing room to American families is really something that remains a top priority for the president,” said Jon Donenberg, a deputy director of the National Economic Council, in a briefing at the White House with reporters from regional publications.
The speech is expected to be of great significance for Biden as he seeks reelection in November against the likely Republican nominee, former President Donald Trump.
Some policies Biden will address in his remarks Thursday night include his administration’s efforts to crack down on “junk fees,” help first-time homebuyers and protect renters from rent hikes, as well as pushing for several changes to the U.S. tax code.
Daniel Hornung, a deputy director of the National Economic Council, said Biden will make the case to Republicans to bring back the expanded child tax credit.
“The president will push to restore that tax break to make sure that families across the country, families with children, have the breathing room they need,” Hornung said.
Biden will use the State of the Union to push tax policies that promote “interests of working people and not billionaires or megacorporations,” Hornung said.
The president will propose a multi-pronged plan that would include raising the corporate tax rate to 28 percent, a priority Biden discussed in last year’s budget proposal.
Hornung said the president wants to reverse the “tax windfall” that corporations enjoyed following the Trump administration’s 2017 Tax Cuts and Jobs Act that set the corporate rate at 21 percent.
Biden will again pitch a minimum tax on the richest 0.01 percent of Americans and call on Congress to ensure tax cuts for lower- and middle-income Americans by restoring all or part of the pandemic-era expansion of the child tax credit and premium tax credits for Affordable Care Act plans.
Push in Congress on taxes
Biden’s renewed urgency over the tax code comes as Trump’s 2017 tax policies are winding down and must either be renewed or changed by the end of 2025. Biden is expected, in his speech, to criticize Republican proposals to extend some Trump-era tax breaks.
Congress has taken rare bipartisan, bicameral action this year to head off the looming tax code tempest.
A proposal to temporarily expand the child tax credit and restore a handful of expired or expiring corporate tax incentives received sweeping support in the U.S. House in late January. The bill, which the White House has endorsed, is stalled in the U.S. Senate.
The 2021 expansion of the child tax credit lifted nearly 3 million children out of poverty, according to the U.S. Census.
That temporary pandemic-era expansion under the American Rescue Plan, now expired, increased benefits from up to $2,000 to $3,600 for qualifying children under age 6, and $3,000 for other qualifying children under age 18.
Housing crunch
Several economic advisers noted that rental rates have continued to rise and that there is a “housing gap in this country,” Domestic Policy Advisor Neera Tanden said.
“He has specific proposals that he’ll speak to in terms of housing affordability and ensuring that we are addressing rent,” Tanden said of the president’s speech Thursday.
Rohit Chopra, the director of the Consumer Financial Protection Bureau, said that the administration is also looking at ways to lower closing costs on buying a home because the White House’s analysis has found that expense “drains people’s down payment and pushes up their monthly mortgage payment.”
He added that the White House is also looking for ways to make it easier for homeowners to refinance “now that (interest) rates have started to come down.”
Hornung said that the White House is also exploring ways to “boost the supply of housing throughout the country,” and find steps that the federal government can take to “help state (and) local governments reduce barriers” when it comes to expanding housing.
He said that in addition to getting more housing supply online, Biden will lay out how the administration is looking “to invest in the supply of affordable housing,” and to block “practices that are driving up rents that are not just about supply and demand.”
Biden to point to actions on junk fees
Chopra said that Biden will stress how his administration has gone after “junk fees,” and will continue to do so, pointing to a finalized rule Tuesday that will cap most credit card fees to $8.
“I think the impact is gonna be most felt by those who really are living paycheck to paycheck, those who are trying to pay off their debt,” he said.
Chopra said that the administration launched an industry-wide study and found junk fees in hotels, ticket sales, airlines and the banking industry. He said it’s a tactic that companies use to push up purchase prices to “charge for fake or worthless services.”
“I think we’ve all been seeing these creep across the economy in our lives almost everywhere we go,” he said.
Chopra said the White House found that one bank was charging customers a fake junk fee for a printed bank statement “that was neither printed nor mailed.”
“We have already ordered them and others to refund the money,” he said. “I think what we’re seeing is people, perhaps those who have the least amount of time to bicker with customer service agents. They’re no longer spending that time. They’re actually seeing that money being kept for themselves.”
