President Biden on Monday proposed a $7.3 trillion budget loaded with tax increases on corporations and high earners, new spending on social programs and a wide range of efforts to combat the high costs of 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 he 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 2025 budget have almost no chance of passing this year, given that Republicans control the House and adamantly oppose Mr. Biden’s budget agenda. 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 rapid 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.
The president outlined his plans for additional spending programs — including ones he has failed to convince Congress to act on for years — in his introduction to the budget.
“For too many hard-working families, finding good housing is too expensive, which is why we are working to reduce costs and increase the supply of housing nationwide,” he wrote.
The budget, he added, “restores the child tax credit expansion I signed into law, which cut child poverty by nearly half in 2021; and it guarantees the vast majority of families high-quality child care for up to $10 a day, while increasing educator salaries. It provides universal, free preschool to four million American 4-year-olds.
Mr. Biden proposes to more than offset these spending increases by imposing about $5 trillion in new taxes on businesses 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 within the budget.
“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 businesses.
Polls show Americans are unhappy with Mr. Biden’s handling of the economy and are supportive of Mr. Trump’s approach to economic issues. But Mr. Biden has remained steadfast in his core economic policy strategy, and the budget is unlikely to deviate from that plan.
White House officials, before the budget release, said Mr. Biden would propose about $3 trillion in new measures to reduce the budget deficit over the next decade. This is consistent with his budget proposal last year, which 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. .
Mr. Biden is expected to once again call for raising the corporate tax rate from 21% to 28%, the level set by Mr. Trump in the tax bill he signed in late 2017. Mr. Biden will propose also to increase a new minimum corporate tax. large corporations and quadruple 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 a 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 are confident the deficits in their 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 moving toward 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.
