President Joe Biden released his budget on Thursday, vowing to chop $3 trillion from the federal deficit over the following decade, partially, by levying a 25% minimum tax on the wealthiest Americans.
Biden’s budget would also raise more revenue by increasing taxes on oil and gas firms, mountain climbing the company tax rate to twenty-eight% from 21% imposed under former President Donald Trump but below the pre-2017 35% tax, and permit Medicare to barter drug prices.
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With Biden more likely to run for reelection in 2024, his budget can be a preview into his platform as a candidate and campaign pitch within the yr ahead. Facing a Republican-controlled House, it’s unlikely lots of the proposals will probably be passed of their current form. The president submits his budget to Congress outlining the administration’s priorities for the upcoming yr, but ultimately Congress decides where the funds are allocated.
Fair proportion
White House Office of Management and Budget director Shalanda Young told reporters the administration is in a position to cut deficit spending “by asking the rich and massive corporations to start to pay their fair proportion and by cutting wasteful spending on Big Pharma, Big Oil and other special interests.”
“It does this partially by reforming our tax code to reward work, not wealth, including by ensuring that no billionaire pays a lower tax rate than a teacher or firefighter and by quadrupling the tax rate on corporate stock buybacks,” Young said. “That is a really clear contrast with congressional Republicans.”
Read more on Biden’s fiscal yr 2024 budget plan:
The Stock Buybacks Tax builds upon a measure Biden signed into law last yr reducing the differential treatment within the code between buybacks and dividends. The goal is to encourage business to take a position in growth moderately than spending on stock buybacks. Under the budget proposal, the tax would quadruple from 1% to 4%. A Data for Progress poll from February found 58% of Americans support increasing the stock-buyback tax.
Biden’s fiscal yr 2024 budget gets some help from the slowing Covid-19 pandemic, which the White House noted needs less emergency aid because the outbreak enters a latest phase due to widespread vaccinations. The president’s spending priorities include increasing funding for early childhood education and child care, expanding the $35 cap on insulin prices to all Americans and expanding free community college. These proposals are all a part of his push to provide American families “a bit of more respiration room.” The 2024 fiscal yr begins Oct. 1 and runs through Sept. 30, 2024.
Social programs
Cecilia Rouse, chair of the Council of Economic Advisers, explained how the administration believes the social programs outlined within the White House budget will actually boost the economy.
“Policies resembling paid leave and child care will bring more staff into the labor force and improve productivity,” Rouse said. “Investments in early education, mental health and community college not only expand our economy’s productive capability but pay dividends for generations to return.”
Along with social spending, the budget includes robust defense funding. At greater than $835 billion, the defense budget can be amongst the biggest peacetime expenditures in U.S. history.
For weeks the president has urged House Republicans to present their very own budget proposals as an alternative of just criticizing his plan. House Republicans have promised to propose a balanced budget and have scoffed when the White House pointed to GOP proposals to make cuts to programs like Social Security and Medicare. House Budget Committee Chair Jodey Arrington told CNN on Wednesday the Republican budget must be ready by the second week in May.
‘Fight it out’
Speaking in Philadelphia, Pa. on Thursday, Biden said he and House Speaker Kevin McCarthy, who the president noted is “a really conservative guy” with “a really conservative group” of lawmakers, agreed early on to fulfill after they each introduce their budgets.
U.S. President Joe Biden delivers remarks about his budget for fiscal yr 2024 on the Ending Trades Institute in Philadelphia, Pennsylvania, March 9, 2023.
Evelyn Hockstein | Reuters
“We’ll sit down and we’ll go line by line, and we’ll undergo it and see what we are able to agree on, what we disagree on, after which fight it out within the Congress,” Biden recounted telling McCarthy. “I’m ready to fulfill with the Speaker anytime, tomorrow if he has his budget. Lay it down, show me what you wish to do, I’ll show what I need to do. We are able to see what we are able to agree on, see what we do not agree on and we vote on it.”
The White House, in its budget proposal, includes a complete section dedicated to shoring up Social Security and Medicare, funded by the minimum 25% wealth tax on households with a net price of $100 million or more. The proposed budget would extend “the solvency of the Medicare Trust Fund by not less than 25 years” without removing advantages or raising costs. It also provides a $1.4 billion increase in funding for Social Security to enhance services.
Debt ceiling debate
“Profit cuts will not be on the table,” Young said.
Looming over the budget release is the unresolved standoff over whether to lift the debt ceiling. The White House has maintained it is going to not negotiate over the debt limit, arguing Congress should act to boost it because it has done quite a few times over past many years. House Republicans, led by Speaker Kevin McCarthy, have tried to tie the debt ceiling to future spending, saying they are going to not budge without guarantees to chop expenses. The debt ceiling, nevertheless, pertains to existing spending. So far, House Republicans have been murky on what expenses they would love to see cut.
“MAGA Republicans in Congress have tried to repeal the Reasonably priced Care Act, Social Security, Medicare, Medicaid — we’re not going to allow them to folks,” Biden said. “My budget makes robust investments on military defense, let’s have a look at what the MAGA Republicans propose and let’s be clear where I stand: I is not going to allow cuts to the needs of the intelligence community or military that help keep us secure.”
‘Back to work’
Rouse touted the administration’s economic track record, noting that unemployment has fallen somewhat inexplicably under Biden’s watch — whilst the pace of inflation has slowed. She said most economists couldn’t have predicted the roles market would rebound as strongly because it has since he took office.
“I feel if you happen to told most conventional macroeconomists last June that we were about to get seven straight months of declining annual CPI inflation, they might have told us that the unemployment rate would rise over that point, but as an alternative the unemployment rate in January was 3.4%, or 0.2 percentage points lower than it was,” Rouse said, noting that February’s unemployment rate will probably be released Friday. “The economy looks healthier today than it did in other ways, too.”
Rouse expanded on that, in an try to ease recession concerns by pointing to economic gains already seen under the administration’s watch.
“The strength of our recovery has put us on solid ground to weather economic shocks,” Rouse said. “Americans are back to work and the economy is stronger than anyone, including the federal government and personal forecasters, imagined it will be when President Biden took office.”