President Biden‘s upcoming budget proposal aims to slash nearly $3 trillion from the federal deficit over the next decade by hiking taxes on wealthy individuals and corporations, the White House said Wednesday.
Mr. Biden‘s deficit reduction target is much higher than the $2 trillion cut he proposed in his State of the Union address. It will also serve as a negotiating point ahead of his showdown with House Republicans over the looming debt ceiling crisis.
White House press secretary Karine Jean-Pierre said the president will propose a slew of tax increases on rich people and corporations in order to shrink the deficit.
“It proposes tax reforms to ensure the wealthy and large corporations pay their fair share while cutting wasteful spending on special interests like Big Oil and Big Pharma,” Ms. Jean-Pierre told reporters.
She did not offer any more details about the budget proposal, which will be unveiled Thursday.
Mr. Biden will discuss his budget in Philadelphia, which he has made the lynchpin of his reelection campaign. The visit on Thursday will be the president’s 12th to the city.
As part of his budget plan, Mr. Biden has said he wants to keep Medicare solvent by taxing individuals making more than $400,000 per year and imposing a tax on billionaires’ holdings.
The budget will also call for a 5.2% raise for federal workers, the largest proposed pay increase for civil servants in 43 years. That provision has already drawn fierce opposition from Republicans.
House Oversight Committee Chairman James Comer, Kentucky Republican, accused the president of putting the federal bureaucracy ahead of the American people as inflation runs rampant.
“Now President Biden is continuing to ensure that federal workers’ pay and benefits are insulated from the price tag of inflation, but it will be paid for by American taxpayers who continue to be harmed by the Biden administration’s inflationary policies,” he said.
Mr. Biden‘s budget is unlikely to clear the Republican-controlled House or the Senate, where Democrats hold a slim majority. Republicans have called on Mr. Biden to fund his budget priorities through significant spending cuts.
In contrast, Mr. Biden has insisted that tax increases on the wealthy and corporations can cover his budget, reduce the deficit and bolster Medicare and Social Security.
Ms. Jean-Pierre insisted that the American public is on board with the tax increases, noting that more than 81 million cast a vote for Mr. Biden in the 2020 presidential election.
“This is something Americans believe. They believe the wealthy and corporations should pay their fair share,” she said. “This is something the president has spoken to many times, and we see support for that.”
In a speech Monday, Mr. Biden said 680 billionaires are in the United States, and many of them are paying lower tax rates than middle-class Americans. He said for the good of the country, they should be paying more in taxes.
“No billionaire should be paying a lower tax rate than a firefighter — nobody,” Mr. Biden said at the International Association of Fire Fighters.
Among the tax increases expected to be included in the budget is raising the Medicare surtax on earned and unearned income from 3.8% to 5% for individuals making more than $400,000.
Last month, Mr. Biden proposed a new tax on high-income individuals that would require individuals and families worth more than $100 million to pay a 20% tax on income and unrealized gains of liquid assets such as stocks.
Mr. Biden is also expected to call for bringing back two proposals in his original agenda that were later jettisoned from his massive climate, health and tax law. The proposals include raising the top marginal income tax from 37% to 39.6% and increasing the corporate tax from 21% to 28%.