Biden budget highlights divide between Republicans and Trump

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

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

Most of the new spending and tax increases included in the fiscal 2025 budget have almost no chance of passing this year, given that Republicans control the House and adamantly oppose Mr. .Biden. Last week, House Republicans adopted a budget proposal outlining their priorities, which are far removed from what Democrats have called for.

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

Mr. Biden has sought to regain strength on economic issues from voters who gave him low marks amid high inflation. This budget aims to present him as a champion of increasing government assistance for workers, parents, manufacturers, retirees and students, as well as the fight against climate change.

Speaking in New Hampshire on Monday, Mr. Biden presented the budget as a way to raise revenue to fund his priorities by raising taxes on the wealthiest Americans and big businesses.

“I’m not against corporations,” he said. “I’m a capitalist, man. Earn all the money you want. Just start paying your fair share of taxes.

The budget proposes about $5 trillion in new taxes on corporations and the wealthy over a decade. Administration officials said Monday that the increases would be split evenly between businesses and the nation's highest earners, and that Americans earning less than $400,000 a year would benefit from tax cuts totaling $750 billion. dollars as part of their plans.

“We can make all of our investments by asking the top 1 and 2 percent to contribute more to the system,” Shalanda Young, 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 the wealthy. “Do you really think the rich and big corporations need another $2 trillion tax break? asked Mr. Biden in New Hampshire, referring to Mr. Trump — but not by name. “Because that’s what he wants to do.”

Speaker Mike Johnson and other members of the House Republican leadership criticized Mr. Biden in a statement released Monday afternoon. “The price tag for President Biden's proposed budget is another glaring reminder of this administration's insatiable appetite for reckless spending and Democrats' disregard for fiscal responsibility,” they said.

Polls have found that Americans are unhappy with Mr. Biden's handling of the economy and favor Mr. Trump's approach to economic issues. But the president was unwavering in its fundamental economic policy strategy, and the budget shows that it is not deviating from this plan.

Mr. Biden's budget proposes about $3 trillion in new measures to reduce the federal deficit over the next decade. This is consistent with its budget proposal last yearwhich reduced deficits by raising taxes on corporations and the wealthy and allowing the government to negotiate more aggressively with pharmaceutical companies to reduce spending on prescription drugs.

The budget again calls for raising the corporate tax rate from 21 percent to 28 percent, the level Mr. Trump set in the tax bill. he signed at the end of 2017. He raises a new minimum tax on large corporations and quadruples the tax on stock buybacks, among other efforts to generate more revenue from businesses and individuals who earn more than $400,000 a year.

Those savings would build on discretionary spending limits that Mr. Biden and congressional Republicans agreed to last year to resolve the impasse over increasing the nation's borrowing limit. They would still leave the country with historically high budget deficits: about $1.6 trillion per year on average over the next decade, according to administration projections. As a share of the economy, deficits would fall during this time – but total public debt as a share of the economy would increase slightly.

House Republicans released a budget last week that aims to reduce deficits much faster and balance the budget by the end of the decade. Their savings were based on forecasts of economic growth far above the expectations of mainstream forecasters, as well as significant and often unspecified spending cuts.

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

Mr. Biden and his aides have repeatedly said they believe the deficits in his budgets will not harm the economy. Ms. Young and Jared Bernstein, who heads the White House Council of Economic Advisers, reiterated that position Monday, even after acknowledging that the budget now projects higher public borrowing costs over the next decade than previous budgets previous ones.

Instead of turning to more aggressive deficit reduction, as previous Democratic presidents have done after losing control of one chamber of Congress, Mr. Biden has focused on the need for new spending programs and targeted tax incentives to support growth and the middle class.

The new proposal continues this trend. This would create a national paid leave program for workers. It would restore an expanded child tax credit that Mr. Biden created temporarily in his $1.9 trillion economic stimulus law in 2021. That credit helped significantly reduce child poverty for a year before it expired. That restoration would only last a year, but administration officials said Monday they hope to make it permanent as part of a broader debate over taxes in 2025.

The budget also includes new efforts to help Americans struggling with high costs. That question has been on Mr. Biden's minds with voters since inflation soared under his watch. highest levels in four decades, although price increases have eased over the past year. Mr. Biden outlined many of these efforts in his State of the Union Address last week, including new tax credits for some homebuyers and expanded help for people to buy health insurance through the Affordable Care Act.

Mr. Biden also called for new efforts to improve the solvency of Social Security and Medicare. In the budget, he opposed cuts to program benefits and any additional contributions from workers earning less than $400,000 a year.

On Monday, Ms. Young suggested that Mr. Biden would seek to strengthen Social Security in part by targeting a cap on income subject to payroll taxes that fuel the program — a move he specifically endorsed for Medicare. She said Mr. Biden would improve his creditworthiness “by asking high-income Americans to pay their fair share.” If you make a million dollars in this country, you will finish paying your Social Security taxes in February.

In another key area, Mr. Biden's proposal addresses key details: what to do with provisions of the 2017 Republican tax law, including individual tax cuts, that expire in 2025. The budget calls for that expiration , which was enshrined in law. in order to contain its estimated cost, “fiscally imprudent”. But it does not specify how Mr. Biden would handle the expirations if he wins a second term.

Instead, the budget says Mr. Biden would seek to extend tax breaks to people earning less than $400,000 a year, offset by “additional reforms to ensure wealthy people and big businesses pay their fair share.” .

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