President Biden on Thursday proposed a record-shattering $6.8 trillion budget that envisions a significant surge in social program spending amid the roughly $5.5 trillion in new taxes, even after two years of massive spending on pandemic relief and economic recovery packages.
The budget, which would set the U.S. on a course for record spending as a percentage of the economy, calls for an 8% increase over what the government is projected to spend in the current fiscal year.
“The things I’m proposing [are] not only going to lift the burden off of families in America; it’s going to generate economic growth,” Mr. Biden said at a union hall in Philadelphia.
The budget outline for fiscal 2024 reveals details of his priorities that will be sent to Congress next week.
Either way, Mr. Biden’s budget is an aspirational document that isn’t expected to go anywhere in a Republican-controlled House and narrowly divided Senate. It serves as a campaign message for a president seeking reelection. By traveling to Philadelphia, Mr. Biden announced his blueprint in the largest city in a state that will be pivotal to winning the presidency in 2024.
Even before Mr. Biden’s proposals hit Capitol Hill, Republicans were knocking down the increases in spending and taxes.
SEE ALSO: Biden budget takes taxes, spending, IRS funds to new levels, promises plan will cut deficit
House Budget Committee Chairman Jodey Arrington, Texas Republican, said in a statement that “Biden’s latest budget is more of the same bloated bureaucracy at the expense of working families while sticking our grandchildren with the bill.”
House Republicans have insisted on significant spending cuts in exchange for raising the debt ceiling to avoid a potentially disastrous default. Democrats have called for increasing the federal debt limit without tying it to spending cuts.
A statement from House Republican leaders called the budget “a reckless proposal doubling down on the same far-left spending policies that have led to record inflation and our current debt levels.”
“We must cut wasteful government spending. Our debt is one of the greatest threats to America and the time to address this crisis is now. Yet, President Biden is proposing out-of-control spending and delaying debt negotiations, following his pattern of shrugging and ignoring when faced with a crisis,” said Speaker Kevin McCarthy, California Republican.
The president challenged Mr. McCarthy to put forth his own budget and see where they agree. Mr. Biden called out Republicans for demanding spending cuts without specifying what they would slash.
It’s a political gamesmanship move by the president to pressure Republicans into proposing cuts that he believes Americans will oppose.
SEE ALSO: Biden’s wish list includes slew of tax hikes on corporations, capital gains, income and the wealthy
“Show me your budget. I’ll tell you what’s your value,” Mr. Biden said. “I’m ready to meet with the speaker anytime — tomorrow, if he has his budget,” Mr. Biden said. “Lay it down. Tell me what you want to do. I’ll show you what I want to do.”
Republicans in the Senate weren’t any more welcoming. Sen. Bill Hagerty of Tennessee called the budget “wasteful, unserious and behind schedule.”
House Democrats hailed Mr. Biden’s vision as a lifeline for working Americans struggling with stagnant wages and rampant inflation.
“President Biden’s 2024 budget allows for vital increases in investments in education, child care and job training programs,” said Rep. Rosa DeLauro, Connecticut Democrat and ranking member of the House Appropriations Committee. “With an increase in taxes on big corporations, President Biden is proposing a plan that rewards work, not wealth.”
The Committee for a Responsible Budget said Mr. Biden’s proposals would add $19 trillion to the nation’s debt through 2033 and cause it to reach a record share of the U.S. economy by 2027.
“The president should have a plan to truly bring the debt under control before suggesting trillions of dollars in new spending and tax breaks,” said committee President Maya MacGuineas. She called the plan’s spending “excessive.”
Mr. Biden is seeking to pay for the spending spree and reduce the deficit through a series of tax increases on billionaires, wealthy investors and corporations.
All told, Mr. Biden is calling for roughly $5.5 trillion more in taxes over the next decade, which he expects would shave $3 trillion from the federal deficit.
The tax increases would also fund a more than $1 trillion plan that includes beefing up Medicare, providing free community college and universal pre-kindergarten, and subsidizing more of the costs of public housing and child care.
He also is proposing 350 additional Border Patrol agents as illegal migrant encounters on the U.S.-Mexico border grow.
Other major domestic spending proposals include an expansion of the child tax credit and a national paid family and medical leave program. It would provide $25 billion for immigration enforcement and $5 billion more in election assistance.
The proposed $842 billion in defense spending is the highest total ever, and $6 billion more would go to support Ukraine’s battle against Russia’s invasion.
Among the domestic spending proposals, Mr. Biden is calling for all federal workers to receive a 5.2% salary increase.
To pay for at least some of that, the budget request proposes a 25% minimum tax on individuals whose wealth exceeds $100 million, a doubling of capital gains tax rate for investments, raising the corporate tax rate from 21% to 28%, increasing taxes on corporations’ foreign earnings, quadrupling the tax on stock buybacks, and closing loopholes for wealthier Americans.
Mr. Biden’s tax proposals are largely a reprise of his multitrillion-dollar Build Back Better economic package that failed to gain traction in Congress, even with a Democratic-controlled House. The proposals were eventually removed from his pared-down economic plan, known as the Inflation Reduction Act.
Shalanda Young, director of the White House Office of Management and Budget, acknowledged that the tax hikes would likely be dead on arrival. She said the measures are the “start of a healthy dialogue.”
“This shows you what he values and what he is about, and we are happy to have that debate with anyone,” Ms. Young said of the president. “We will propose tax policies that say to the richest Americans and large corporations that you have to begin to pay your fair share so that we can continue to invest in working families in America.”
Cecilia Rouse, chair of the White House Council of Economic Advisers, disputed criticism that the major tax hikes would hurt economic growth. She told reporters that the data shows the 2017 tax cuts didn’t boost the economy as President Trump insisted they would.