The House passed the so-called "Build Back Better" bill by a vote of 220-213, after House Republican Leader Kevin McCarthy on Thursday evening delivered a lengthy floor speech to delay the final vote.
The bill includes $555 billion in clean energy and climate investments, $400 billion in funding for child care and free pre-school, $200 billion in child tax and earned income tax credits, and $150 billion in home care for elderly and disabled Americans, Xinhua news agency reported.
"It puts us on the path to build our economy back better than before by rebuilding the backbone of America: working people and the middle class," Biden said on Friday in a statement after the vote.
The Congressional Budget Office (CBO) estimated on Thursday that the legislation would allocate $1.64 trillion in new federal spending over ten years. If the tax credits in the bill are added to the spending tally, the figure would jump to $2.4 trillion, well above Biden's initial framework for a $1.75-trillion package.
The White House claimed that the framework would raise revenue of around $2 trillion over a decade to fully pay for the social spending plan by imposing new taxes on the largest corporations and the wealthiest Americans.
But the CBO estimated that the legislation would increase the deficit by $367 billion over ten years, not counting any additional revenue that may be generated by additional funding for tax enforcement.
The Committee for a Responsible Federal Budget, a US watchdog group, also estimated that the bill would add about $750 billion to the deficit over the next five years and about $160 billion over ten years.
Now the bill goes to the Senate for consideration, where some Senators have expressed concerns about the rising budget deficit and inflation pressures.
"Ninety per cent of Americans are worried about inflation, but House Democrats just voted to let Washington DC print, borrow and spend trillions more," Senate Republican Leader Mitch McConnell said on Friday in a statement.
"Our economy is shaky, but House Democrats just voted for historic tax hikes that would drain hundreds of billions of dollars out of US industries and kill American jobs," McConnell added.
Passage of the bill in the Senate will require unanimous support from the Democratic caucus, but the two key moderate Democrats, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, have yet to give their full public support. Democratic Senators are expected to make extensive changes before voting on it, potentially in December, according to Bloomberg.