Biden would cut the budget deficit by $3 trillion, tax the American rich

President Joe Biden released his budget on Thursday, pledging to cut $3 trillion from the federal deficit over the next decade, by imposing a 25% minimum tax on the wealthiest Americans.

Biden’s budget would raise more revenue by raising taxes on oil and gas companies, raising the corporate tax rate to 28% from the 21% imposed under former President Donald Trump, but down from the pre-2017 tax of 35%, and Medicare Will allow the U.S. to negotiate drug prices. ,

With Biden likely to seek re-election in 2024, his budget is also a preview of his platform as a candidate and campaign pitch in the coming year. Facing a Republican-controlled House, it is unlikely that many of the proposals will pass in their current form. The president submits his budget to Congress outlining the administration’s priorities for the upcoming year, but ultimately Congress decides where to allocate the funds.

White House Office of Management and Budget director Shalanda Young told reporters that the administration has been able to cut deficit spending “to begin paying their fair share to the wealthy and large corporations and Big Pharma, Big Oil and other special interests.” But by cutting wasteful expenditure” “

“It does this by reforming our tax code to reward work, not wealth, by making sure no billionaire pays a lower tax rate than a teacher or firefighter, and by taxing corporate stock buybacks.” quadruples the rate,” Young said. “It’s a very stark contrast with the Republicans in Congress.”

The stock buyback tax is based on a measure last year reducing the differential treatment in the Code between buybacks and dividends. The goal is to encourage the business to invest in growth rather than spend on stock buybacks. Under the budget proposal, the tax would quadruple from 1% to 4%. Data from a February Progress poll found that 58% of Americans support raising the stock-buyback tax.

Biden’s fiscal year 2024 budget gets some help from the slowing Covid-19 pandemic, which the White House said requires less emergency aid as the outbreak enters a new phase of calls for widespread vaccination. The president’s spending priorities include increasing funding for early childhood education and child care, expanding the $35 cap on insulin prices for all Americans, and expanding free community college. These proposals are part of his effort to give American families “a little more breathing room.” The financial year of 2024 starts from October 1 and runs till September 30, 2024.

Cecilia Rouse, president of the Council of Economic Advisors, explained how the administration believes the social programs outlined in the White House budget will actually boost the economy.

“Policies like paid leave and child care will bring more workers into the labor force and improve productivity,” Rouse said. “Investing in early education, mental health and community college not only expands the productive capacity of our economy but pays dividends for generations to come.”

Apart from social spending, the budget includes robust defense funding. At more than $835 billion, the defense budget would be one of the largest peacetime expenditures in American history.

For weeks the president urged House Republicans to submit their own budget proposals rather than criticize his plan. House Republicans have promised to propose a balanced budget and scoffed when the White House pointed to GOP proposals to cut programs like Social Security and Medicare. House Budget Committee Chairman Jody Arrington told CNN on Wednesday that the Republican budget should be ready by the second week of May.

Speaking in Philadelphia, Pa., on Thursday, Biden said he and House Speaker Kevin McCarthy, whom the president called “a very conservative guy,” along with “a very conservative group” of lawmakers, would both present their budgets. After doing agreed to meet. ,

Biden told McCarthy, “We’ll sit down and we’ll go line by line, and we’ll go through it and see what we can agree on, what we disagree on, and then fight it out in Congress.” “I’m ready to meet the president any time, tomorrow, if he has his budget. Put it down, show me what you want to do, I’ll show what I want to do. We can see that we What can be agreed upon?” See what we don’t agree on and we vote on that.”

In its budget proposal, the White House included an entire section devoted to supporting Social Security and Medicare, funded by a minimum 25% estate tax on households with net worth of $100 million or more. The proposed budget would “extend the Medicare Trust Fund’s solvency for at least 25 years” without removing benefits or increasing costs. It also provides a $1.4 billion increase in funding for Social Security to improve services.

“Benefit cuts are not on the table,” Young said.

With the budget release looming, there is an unresolved impasse on whether to lift the debt ceiling. The White House has said it will not negotiate the debt ceiling, arguing that Congress should act to raise it as it has done many times over the past decades. House Republicans, led by Speaker Kevin McCarthy, have tried to link the debt limit to future spending, saying they will not budge without a promise to cut spending. However, the loan limit is related to current expenditure. To date, House Republicans have been tight-lipped about what spending cuts they would like to see.

“The MAGA Republicans in Congress have tried to repeal the Affordable Care Act, Social Security, Medicare, Medicaid — we’re not going to let them,” Biden said. “My budget makes strong investments on military defense, let’s see what the MAGA Republicans propose and let’s be clear where I stand: I will not allow cuts to the needs of the intelligence community or military that help keep us safe.” “

Rouse touted the administration’s economic track record, noting that unemployment has fallen somewhat inexplicably under Biden’s watch — even as inflation has slowed. He said most economists could not have predicted that the jobs market would rebound so strongly since he took office.

“I think if you told most traditional macroeconomists last June that we were about to get seven straight months of declining annual CPI inflation, they would have told us that the unemployment rate would rise at that point, but instead the January unemployment rate was 3.4. %, or 0.2 percentage points lower,” Rouse said, noting that the February unemployment rate would be released on Friday. “The economy is looking healthy in other ways today, too.”

Rouse expanded on that in an effort 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 at work and the economy is stronger than anyone, including the federal government and private forecasters, imagined would have been had President Biden taken office.”