Here’s the latest on the president’s priorities.

President Biden on Monday proposed a $7.3 trillion budget packed with tax increases on corporations and high earners, new spending on social programs and a wide range of efforts to combat high consumer costs like housing and college tuition.

The proposal includes only relatively small changes from the budget plan Mr. Biden submitted last year, which went nowhere in Congress, though it reiterates his call for lawmakers to spend about $100 billion to strengthen border security and deliver aid to Israel and Ukraine.

Most of the new spending and tax increases included in the fiscal 2025 budget again stand almost no chance of becoming law this year, given that Republicans control the House and roundly oppose Mr. Biden’s fiscal agenda. Last week, House Republicans passed a budget proposal outlining their priorities, which are far afield from what Democrats have called for.

Instead, the document will serve as a draft of Mr. Biden’s policy platform as he seeks re-election in November, along with a series of contrasts intended to draw a distinction with his presumptive Republican opponent, former President Donald J. Trump.

Mr. Biden has sought to reclaim strength on economic issues with voters who have given him low marks amid rapid inflation. This budget aims to portray him as a champion of increased government aid for workers, parents, manufacturers, retirees and students, as well as the fight against climate change.

The president stressed his plans for additional spending programs — including those he has failed for years to convince Congress to enact — in his introduction to the budget.

“For too many hardworking families, it costs too much to find a good home, so we are working to lower costs and boost supply of housing nationwide,” he wrote.

The budget, he added, “restores the Child Tax Credit expansion I signed into law, which cut child poverty nearly in half in 2021; and it guarantees the vast majority of families high-quality child care for no more than $10 a day, while boosting pay for child care workers. It offers universal free preschool for all four million of America’s 4-year-olds.”

Mr. Biden proposes to more than offset those spending increases by imposing about $5 trillion in new taxes on corporations and the wealthy over a decade. Administration officials said Monday that those increases would be equally split between corporations and the nation’s highest earners, and that Americans earning less than $400,000 a year would enjoy tax cuts totaling $750 billion under the budget.

“We can do all of our investments by asking those in the top 1 and 2 percent to pay more into the system,” Shalanda Young, the director of the White House Budget Office, told reporters.

The president has already begun trying to portray Mr. Trump as the opposite: a supporter of further tax cuts for corporations.

Polls show Americans are dissatisfied with Mr. Biden’s handling of the economy and favor Mr. Trump’s approach to economic issues. But Mr. Biden has been unwavering in his core economic-policy strategy, and the budget is not expected to deviate from that plan.

White House officials, previewing the budget release, said Mr. Biden would propose about $3 trillion in new measures to reduce the budget deficit over the next decade. That is in line with his budget proposal last year, which narrowed deficits by raising taxes on businesses and the rich and by allowing the government to bargain more aggressively with pharmaceutical companies in order to reduce spending on prescription drugs.

Mr. Biden is once again set to call for raising the corporate tax rate to 28 percent from 21 percent, the level Mr. Trump set in the tax bill he signed in late 2017. Mr. Biden will also propose increasing a new minimum tax on large corporations and quadrupling a tax on stock buybacks, among other efforts to raise more revenue from companies and individuals who make more than $400,000 a year.

Those savings would build on discretionary spending limits that Mr. Biden and congressional Republicans agreed on last year to resolve a standoff over raising the nation’s borrowing limit. They still would leave the nation with historically high budget deficits: about $1.6 trillion a year on average over the next decade, by administration forecasts. As a share of the economy, deficits would decline in that time — but total government debt as a share of the economy would tick upward.

House Republicans released a budget last week that seeks to reduce deficits much faster — balancing the budget by the end of the decade. Their savings relied on economic growth forecasts that are well above mainstream forecasters’ expectations, along with steep and often unspecified spending cuts.

The nonpartisan Committee for a Responsible Federal Budget called the Republican plan “unrealistic in its assumptions and outcomes.” On Monday, the group called Mr. Biden’s proposed deficit reduction “a welcome start, but a too timid one.”

Mr. Biden and his aides have repeatedly said they are comfortable that the projected deficits in his budgets will not hurt the economy. Ms. Young and Jared Bernstein, who leads the White House Council of Economic Advisers, repeated that position on Monday, even after acknowledging that the budget now forecasts higher government borrowing costs over the next decade than previous budgets have.

Instead of pivoting to more aggressive deficit reduction, as prior Democratic presidents have done after losing control of a chamber of Congress, Mr. Biden has leaned into the need for new spending programs and targeted tax incentives to bolster growth and the middle class.

Source link

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top