Takeaways from Biden’s $6.9 trillion budget proposal: Tax the rich. Cut the deficit. Take on the GOP.
President Joe Biden released a federal budget Thursday that seeks to transform the economy and set the stage for an expected reelection campaign, reviving plans to raise taxes on the wealthiest Americans and corporations to expand the government’s social safety net.
Although the spending and tax hikes have no chance of passing the Republican-controlled House of Representatives, the 2024 budget proposal establishes Biden’s priorities amid a standoff with congressional Republicans over raising the nation’s debt ceiling to avert an economic crisis this summer.
Biden called on Republicans to show which programs they want to cut as he unveiled proposals to extend the solvency of Medicare, fund national paid family leave, and subsidize child care and free community college for many low-income students.
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Biden also wants to repeal former President Donald Trump’s tax cuts for the wealthiest Americans by restoring the 39.6% tax rate for single filers earning at least $400,000 a year and married couples earning at least $450,000. Biden proposed taxing capital gains at the same rate as wage income for Americans who earn at least $1 million.
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Not coincidently, the projected deficit reduction closely matches the $3 trillion the White House projects Republican tax cuts would add to the deficit over 10 years.
“I’ll take our plan as fiscally responsible any day,” said Shalanda Young, director of the White House Office of Management and Budget.
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Republican House Speaker Kevin McCarthy and other GOP lawmakers have pushed for spending cuts in a package to raise the debt ceiling, but they have not specified which programs they want to target to achieve their goal of eliminating the deficit in 10 years without raising taxes.
“If they say they want to cut the deficit, but their plans would explode the deficit, how are they going to make the math work?” Biden said, laying out his budget in a speech in Philadelphia. “What are they going to cut?”
Biden said he’s willing to meet with McCarthy “anytime, tomorrow ” if he has his budget to put forward. “Lay it down. Tell me what you want to do. I’ll show you what I want to do.”
Biden budget proposal would increase Medicare tax for Americans earning more than $400K
To ensure Medicare is funded for the next 25 years, Biden’s budget proposes using proceeds from the increased Medicare tax rate to bolster Medicare’s hospital-insurance fund. He also wants to expand the net investment income tax to apply to more types of income and divert revenue to help Medicare.
For Social Security, Biden’s budget proposes $1.4 billion for Social Security staff and information technology but no tax overhaul to make the program solvent.
Young said Republicans are “the No. 1 threat” to Social Security, arguing the president’s budget protects the program by taking cuts off the table.
Child care, paid leave and other pieces of Biden’s stalled ‘Build Back Better’ agenda
Biden’s budget resurfaces proposals for national paid family and medical leave, subsidized child care, expanded community college and other areas he was unable to pass as part of his Build Back Better domestic agenda.
Each would mark a dramatic expansion of the government’s social safety net, but those proposals couldn’t muster support in the Senate even when Democrats controlled the House during the first two years of Biden’s presidency.
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The plans, although dead on arrival in the Republican-controlled House, allow Biden to make a sharp contrast with Republicans who want to cut government spending.
“Show me your budget, and I’ll tell you what you value,” Biden said.
Biden’s national paid leave plan would provide up to 12 weeks of leave for workers for a new child, taking care of an ill loved one, recovering from illness and other emergencies, and three days to grieve the death of a loved one.
The budget would provide federal funds to states to increase options for child care for more than 16 million children. It would also provide federal funds to states to offer universal, free pre-kindergarten to 3- and 4-year-olds.
With Build Back Better, Biden offered tuition-free community college. His new budget doesn’t go quite as far, but it offers free community college for families earning $125,000 or less enrolled in Historically Black Colleges and Universities, tribal-controlled universities and minority-serving institutions.
Other proposals in Biden’s budget would restore child tax credits from Biden’s American Rescue Plan, expand federal funds for affordable housing and rental assistance, provide $150 billion in new funding for Medicaid over 10 years, cap insulin costs at $35 for all Americans and reduce energy costs for low-income Americans.
Emphasizing climate change and microchips
Biden’s budget would double down on his administration’s efforts to increase domestic manufacturing in the “green” economy and make the U.S. a leader in the production of microchips.
The budget includes $21 billion in discretionary funds to support activities that were authorized in the CHIPS in Science Act, which passed with bipartisan support last year to offer incentives to microchip companies to expand in the U.S.
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In an appeal to blue-collar Americans, Biden has talked about turning depleted factory towns in the Midwest into the new centers for microchip production to help the U.S. catch up to China.
The budget provides a record $210 billion for federal research and development in science, technology and invocation and $375 million to create a new institute within the National Institutes of Standard and Technology Services dedicated to the domestic production of technologies.
To address climate change, the budget includes $1.2 billion to support Department of Energy industrial decarbonization; $5 billion for the Environmental Protection Agency to reduce greenhouse gas emissions and build resilience to the impacts of extreme weather; and $16.5 billion in climate science and clean-energy innovation.
The White House said the proposals would help carry out Biden’s goal to cut greenhouse gas emissions in half by 2030.
Reach Joey Garrison on Twitter @joeygarrison.