President Biden is expected to propose a budget on Monday that includes higher taxes on businesses and high earners, new spending on social programs and a wide range of efforts to combat high consumer costs such as housing and college tuition. .
The new spending and tax increases included in the 2025 budget are unlikely to pass this year, given that Republicans control the House and are totally opposed to Biden's fiscal policies. Last week, House Republicans passed a budget that outlines their priorities, but it's a far cry from what Democrats had called for.
Rather, the document is a draft policy platform for Mr. Biden as he seeks re-election in November, and a series of changes aimed at differentiating himself from his likely Republican opponent, former President Donald J. Trump. It becomes a contrast.
Biden is trying to regain strength on economic issues from voters who have given him low ratings amid soaring inflation. The budget aims to paint him as a champion of not only fighting climate change but expanding government aid to workers, parents, manufacturers, retirees and students. Biden's budget proposal proposes to more than offset the costs of these priorities through higher taxes on big corporations and the wealthy. The president is already trying to paint Trump as a proponent of the opposite: more tax cuts for corporations.
“A fair tax code is a way to invest in the things that make this country great: health care, education, defense, and more,” Biden said in Thursday's State of the Union address.
Later in his speech, during a call-and-response with Democrats in the chamber, Biden added: “Does anyone in this country really think the tax code is fair? Do you really think the wealthy and big corporations need another $2 trillion in tax cuts? Certainly not. Fairness I will continue to fight tooth and nail to keep it that way.”
Polls show Americans are dissatisfied with Biden's handling of the economy and support Trump's approach to economic issues. But Biden remains firm on his core economic policy strategy, and his budget proposal is not expected to deviate from that plan.
White House officials said ahead of the budget release that Biden would propose about $3 trillion in new measures to reduce the deficit over the next 10 years. This is in line with last year's budget, which reduced the deficit by raising taxes on corporations and the wealthy and allowing the government to negotiate more aggressively with drug companies to cut spending on prescription drugs. There is.
Mr. Biden is set to renew his call for raising the corporate tax rate to 28% from the 21% level set in the tax bill signed by Mr. Trump at the end of 2017. Mr. Biden also plans to propose a new minimum tax increase for corporations. Among other efforts to increase revenue from companies and individuals making more than $400,000 a year, it would quadruple taxes on large corporate acquisitions and stock buybacks.
Those savings would build on discretionary spending limits that Biden and Congressional Republicans agreed to last year to resolve a dispute over raising the nation's borrowing limit. But even if Congress agrees to all of Biden's $3 trillion proposal, the deficit would still average about $1.7 trillion a year over the next 10 years, based on projections from the nonpartisan Congressional Budget Office. Become.
House Republicans last week unveiled a budget that would reduce the deficit more quickly and balance the budget by the end of the decade. Their savings depended on economic growth projections that far exceeded those expected by mainstream forecasters and on large, often unspecified spending cuts.
The bipartisan Committee for a Responsible Federal Budget criticized the Republican plan, calling it “unrealistic in its assumptions and results.” The group said last year that Biden's budget “falls well short of the deficit reduction needed to put the nation on a sustainable fiscal path.”
Biden and his aides have repeatedly said they are confident the projected budget deficit will not hurt the economy. Instead of moving more aggressively to reduce the deficit, like previous Democratic presidents who lost control of Congress, Biden has pivoted to the need for new spending programs and targeted tax breaks. ing.
White House officials said the new budget will continue that trend. This will include a national program of paid leave for workers. It would restore the expanded child tax credit, which Biden temporarily created in his $1.9 trillion 2021 stimulus package and which significantly contributed to reducing child poverty in the year before it expired.
It also includes new efforts to help Americans struggling with high costs. The issue has troubled voters ever since inflation rose to a 40-year high on Mr. Biden's watch, even as price increases slowed last year. Biden previewed many of these efforts in his State of the Union address, including new tax credits for certain homebuyers and expanded support for people to buy health insurance through the Affordable Care Act.
Mr. Biden also plans to call for new efforts to improve the solvency of Social Security and Medicare, though not the overhaul of Social Security that he had predicted during his 2020 campaign, something he could not accomplish in his presidency. There wasn't. The chancellor opposes benefit cuts and has signaled he supports a familiar strategy to shore up benefits: raising taxes on high earners, officials said.
