By Nandita Bose, Jarrett Renshaw and Trevor Hunnicutt
WASHINGTON (Reuters) -U.S. President Joe Biden plans to unveil a sweeping $1.8 trillion package for families and education in his first joint speech to Congress on Wednesday, as he stresses the need to invest to compete with China, the White House said.
Biden will speak at 9 p.m. EDT inside the U.S. Capitol at an event scaled back this year due to the pandemic. He will use the speech to outline his priorities for the rest of his first year in office.
Biden will argue that the new package – which together with an earlier infrastructure and jobs plan totals around $4 trillion, rivaling the annual federal budget – is a once-in-a-generation investment vital to America's future.
The U.S. president will also plead directly with lawmakers to pass legislation to curb police violence, senior administration officials say, speaking on condition of anonymity. Biden will highlight repeated police killings of African-American citizens and years of entrenched racism, while also honoring the service of the vast majority of officers.
The plan includes $1 trillion in spending on education and childcare over 10 years and $800 billion in tax credits aimed at middle- and low-income families, according to a White House fact sheet.
The spending plans "reinvest in the future of the American economy and American workers, and will help us out-compete China and other countries around the world," it said.
Biden faces opposition to his agenda from Republicans who say he is spending too much and liberals who want him to take more aggressive steps.
Biden addressed Republican opposition in a session with TV news anchors at the White House hours before the speech.
"Everybody talks about, can I do anything bipartisan? Well, I got to figure out if there's a party to deal with. We need a Republican Party...We need another party, whatever you call it, that’s unified -- not completely splintered and fearful of one another," he said, according to a tweet from CNN anchor Jake Tapper.
Republican lawmakers have already rejected the $2 trillion-plus infrastructure plan as too large. The Democratic president is gambling that his spending plans, which are largely popular with American voters, can sway Republicans in Congress to cooperate with the White House.
To pay for the plans, Biden has proposed an overhaul of the U.S. tax system. Wednesday's "American Families Plan" is funded by raising the top marginal tax rate for the wealthiest Americans to 39.6% from its current 37%.
It nearly doubles the tax on investment income – known as capital gains – for Americans who earn more than $1 million. The proposed infrastructure plan is funded by corporate tax.
News of the capital gains tax proposal briefly sank stock markets last week.
The Biden administration says the tax reform plan is designed to reward work, not wealth, and "reform the tax code so that the wealthy have to play by the same rules as everyone else."
Biden will use his speech to signal openness to bipartisan compromise on policing, speaking positively about negotiations on a reform bill in Congress.
Senator Tim Scott, the only Black Republican in the upper chamber, is set to give his party's rebuttal to Biden's speech, with police reform expected to be among the topics.
In addition to police reform, Biden will discuss foreign affairs, how his administration has handled the coronavirus pandemic and the status of vaccinations.
One senior congressional aide said Biden is expected to "come out hard on China," noting frequent calls to take a harder line against Beijing from both Republicans and Democrats.
In his decades in elected office, Biden attended dozens of his predecessors' joint addresses to Congress. The scene he faces when he takes the podium at the House of Representatives during a pandemic will look very different.
Just 200 people, mostly lawmakers plus a handful of representatives of other branches of government and family members, will attend the masked, socially distanced speech.
That is a far cry from the 1,600 officials, friends and guests who typically gather for such a presidential speech.
The nationally televised address, however, targets an audience far beyond the reduced-sized crowd on Capitol Hill. About 48 million people watched Biden predecessor Donald Trump's first address to a joint session in 2017.
Republican Senator Mitch McConnell, the Senate minority leader, said ahead of the speech that Biden has not followed through on his promises of seeking unity and has tried to placate liberals instead.
"Over a few short months, the Biden administration seems to have given up on selling actual unity in favor of catnip for their liberal base, covered with a hefty coat of false advertising," McConnell said.
CHILDCARE SAVINGS
The American Families Plan and the infrastructure and jobs plan that the White House introduced this month could represent the most significant government transformation of the economy in decades.
The plan being unveiled on Wednesday includes $200 billion for free, universal preschool for 3- and 4-year olds and $109 billion for free community college regardless of income for two years, the White House said.