President Biden unveiled his budget on Thursday, a $6.9 trillion proposal that would include spending on his long-standing pledges like universal preschool, paid leave and more childcare funding.
Over the longer term, the White House says Biden’s plan would reduce the deficit, thanks in large part to tax hikes on corporations and the rich. But in fiscal 2024, it would spend $1.8 trillion more than the government would take in.
Since Congress controls the purse strings — and Republicans control the House of Representatives — the plan is more of a political exercise than a practical roadmap for spending. Rather, it’s an opening volley in a high stakes political fight over government funding and the debt ceiling, and is something that Biden can point to during what’s expected to be a second run for the White House in 2024.
Biden formally released the plan in a speech in Philadelphia Thursday afternoon, going to a politically critical state to draw attention to something that is often little more than a document dump.
“I value everyone having an even shot,” Biden said. “My budget reflects what we can do to lift the burden on hard-working Americans.”
“Too many people have been left behind or treated like they’re invisible. I promise you, I see you,” Biden said. “Families have started to breathe a little easier but we’ve got further to go.”
The event was held in a union hall, and though the speech was centered around his fiscal plans, it had the feel of a campaign stop, with Biden touting his priorities on education, infrastructure and lowering the cost of drugs.
Experts say the debt will still rise
No matter the party in power, presidential budget proposals are almost always dead on arrival in Congress.
“It’s not gonna happen,” said Bob Bixby, executive director of the Concord Coalition, a group that advocates for fiscal responsibility. “It’s a campaign document.”
The White House says Biden’s plan would reduce the deficit by $3 trillion over 10 years. But Bixby noted that the Congressional Budget Office is projecting $20 trillion will be added to the national debt over that period, driven by an aging population, rising healthcare costs, higher interest rates on the debt and the compounding of tax cuts passed during the Trump administration.
The government would need a plan that cuts the deficit by more than twice what Biden is proposing to keep the debt from rising as a percentage of the economy, Bixby said.
“Hold on to your seat belts: the debt is going up,” he said.
Here’s what Biden’s plan would involve
The budget includes new spending on programs that Biden has campaigned on in the past:
- Funding aimed at increasing the amount of affordable housing
- Free preschool through funding for a federal-state partnership
- Reinstates the expanded child tax credit, which went into effect during the pandemic, but expired at the end of 2021
- An increase for Pell grants and more benefits for students going to historically Black colleges or universities and other minority-serving institutions
- Allows people on Medicaid to get access to certain HIV/AIDS and Hepatitis C treatments that the White House said would ultimately save taxpayer money and provide better care
In order to pay for funding Biden’s priorities, the president’s plan proposes an increased tax rate on wealthier Americans.
“I’m not going after any ordinary folks,” Biden said in his remarks, noting that his plan won’t raise taxes on anyone making less than $400,000 a year.
- A minimum tax on billionaires of 25%, impacting the wealthiest .01%
- An increase to the tax rate corporations pay in taxes on their profits to 28%
- A cut in tax breaks for oil and gas companies and for real estate investors
- Quadrupling a tax on stock buybacks to 4% from 1%
- Ending tax breaks used by cryptocurrency transactions
- Reverses former President Donald Trump’s 2017 tax cuts so that people making more than $400,000 per year pay 39.6%
Biden proposes to let Medicare negotiate prices for a broader range of prescription drugs. Some of this was allowed under last year’s Inflation Reduction Act.
Biden’s budget also includes funding for other government efforts, like funding to increase security at U.S. borders and combat fentanyl tracking. There are also investments in fighting climate change and global warming.
Original Source: National Public Radio