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President Biden released a $6.8 trillion budget proposal that calls for trillions of dollars in new taxes on the wealthy and corporations, to pay for expanded social programs and reduce the federal deficit.
All presidents are required by law to release a budget every year, but the plans rarely become a reality, because Congress alone has the power to enact tax and spending policies. That’s especially true for Biden’s 2024 budget, which is all but dead on arrival with Republicans in control of the House of Representatives. Still, budgets can serve as a potent statement of purpose that shows a president’s priorities looking ahead to legislative battles and upcoming elections.
Biden’s plan doubles down on some of the core themes that have defined his presidency, specifically his argument that Americans need more direct support from the government and that the rich should help pay for it. His proposal calls for additional spending to bring back the expanded child tax credit, secure Medicare’s financial future, expand health care access, fight hunger and establish universal preschool. Those programs would be funded by creating a new minimum tax on billionaires, increasing corporate taxes and repealing tax cuts passed under the Trump administration. The extra revenue would also reduce the deficit by $3 trillion over the next decade, according to the White House.
The budget announcement comes amid a looming battle in Congress over the debt ceiling, which needs to be raised by Congress within the next several months to prevent the U.S. from defaulting on its debts and a likely economic collapse. House Republicans, who will have to sign off on any deal to raise the debt ceiling, have signaled they’re eager to use their leverage to extract deep cuts in federal spending — although they haven’t released a plan on what they’d cut or by how much.
Why there’s debate
Political experts say Biden’s budget shows he's looking to draw a strong contrast with Republicans on economic issues by leaning into the idea that the wealthy foot the bill to expand government support for less affluent Americans. Some pundits argue this approach gives Democrats a strong advantage in the upcoming debt ceiling fight and next year’s critical elections, because it highlights the GOP’s desire to slash social programs and cut taxes for the wealthy — stances that are broadly unpopular among swing voters.
Others say that including a plan to trip the federal debt is a smart tactical move, since it provides a formidable counterpoint to Republicans’ well-worn attempts to portray Democrats as the party of runaway spending.
Conservatives have widely denounced Biden’s plan as an “unserious” wish list of progressive priorities that shows the president is under the control of the far-left fringe of his party. Some argue that the president is overestimating how willing voters are to tolerate tax increases, which they say would ultimately harm average Americans, even if they’re ostensibly targeted at the rich.
House Speaker Kevin McCarthy hasn’t provided a timeline for when his caucus might release its own budget, a step Biden has said is necessary before the two sides can begin discussing a plan to raise the debt limit. The Congressional Budget Office estimates that the U.S. will default on its debts sometime between July and September if no deal is reached.
The president may be overestimating how willing voters are to tolerate tax hikes
“Biden is relying on voters not seeing through this complete shell game. And I think voters might be more astute than that. … We're in an unsustainable tax system, where we have the top 1% of earners paying more than a third of all federal income taxes, that cannot go on.” — Kate Bachelder Odell, Wall Street Journal
Biden is still clearly in thrall to the left fringe of his party
“Biden’s budget is a familiar collection of left-wing tax and spending policies, many of which were too radical to pass even when Democrats had full control of Congress. … The Biden proposal also includes left-wing wish-list items on health care, housing, and ‘environmental justice.’” — Editorial, National Review
The progressive policies in Biden’s budget put moderate Democrats in a tough spot
“Biden’s budget also exposes tensions between liberal and moderate Democrats, as it includes $2 trillion in tax hikes, which will be tough to sell in Senate battlegrounds like West Virginia and Montana. … Biden’s bold effort to put tax increases in the political spotlight is making Senate Democrats nervous ahead of the 2024 election, when they will have to defend 23 seats to keep their majority.” — Alexander Bolton, The Hill
Republicans will lose leverage as long as they don’t produce a budget of their own
“Biden will spend the months ahead repeatedly pointing to his budget and using it as his policy and political baseline. At the same time, he will chide Republicans every day they don’t have their own to add to the debate — while citing past proposals that suggest cuts to programs like Medicare, Social Security and the Affordable Care Act.” — Phil Mattingly, CNN
The budget sets the basic terms of Democrats’ position in the debt ceiling fight
“What the White House wants to present with this budget is not so much something that will turn into law, but instead a clash of visions with House Republicans, who will likely propose deep spending cuts across a swathe of the non-Social-Security-Medicare-and-defense portion of the federal government as part of its proposal for the debt ceiling and a government spending bill later this year.” — Matthew Zeitlin, Grid
The budget shows that Biden will make taxing the rich a core principle of his reelection campaign
“The budget also doubles as a political messaging document for Biden, who is looking to sharpen a contrast with Republicans over fiscal responsibility. The president wants the country’s wealthiest to foot most of the bill, an unmistakable preview of a populist reelection pitch.” — Courtney Subramanian, Los Angeles Times
Budget fights are all just empty political posturing
“Here's the dirty little secret. Neither of these two theatrical productions – neither the Republicans’ refusal to raise the debt ceiling nor Biden’s big tax hike on the super-rich – will ever happen. They’re both fantasies. … They will both end in a dramatic flurry of last-minute negotiations, seemingly death-defying moves and countermoves, and breathtaking cliffhangers. Exciting? Of course. Important? Meh.” — Robert Reich, Guardian
The president is trying to counter GOP attacks by leaning to the right on key issues
“Biden is embracing the rhetoric of fiscal responsibility and national security, domains that have historically been Republicans’ turf. But he is doing so while rejecting any calls to roll back the welfare state. Instead, the budget lays the groundwork to expand it.” — Rachel M. Cohen, Vox
Biden thinks economic issues, not cultural fights, are the key to his reelection bid
“With the exception of abortion rights, Biden … is working to downplay or defuse almost all cultural issues. Instead Biden is targeting his communication with the public almost exclusively on delivering tangible economic benefits to working-class families. … While the leading Republican presidential contenders are effectively asking voters ‘Who shares your values?’ or, in the harshest versions, ‘Who shares your resentments?,’ Biden wants voters to ask ‘Who is on your side?’” — Ronald Brownstein, The Atlantic
Concerns about the deficit are making a surprise return to American politics
“Let's say caring about the deficit is cool again. Back in 2017, Republicans passed a massive tax cut that has added to the deficit big-league in 2020 and 2021. Both parties — and then just Democrats — threw money at the pandemic. Now, there is a Democratic president, and Republicans are in control of the House. House Republicans are demanding spending cuts. And President Biden has, for more than a year, touted his own administration's deficit reduction.” — Tamara Keith, NPR
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