Politics Social spending, business tax hike drive $6T Biden budget
Janet Yellen urges businesses to support corporate tax hikes to fund Biden's infrastructure plan
The Treasury Secretary spoke to the Chamber of Commerce to drum up support for Biden's infrastructure plan, including businesses' part paying for it.On Monday, Yellen delivered a speech to the Chamber of Commerce, which supports the interests of businesses, urging them to support Biden's infrastructure plan. Biden originally proposed funding the plan through a corporate tax hike to 28%, and given fierce Republican opposition to that idea, he has expressed willingness to negotiate on the size of the tax hike, but he is remaining firm on raising taxes on wealthy people and corporations.
WASHINGTON (AP) — President Joe Biden's $6 trillion budget proposal for next year would run a $1.8 trillion federal government deficit despite a raft of new tax increases on corporations and high-income people designed to pay for his ambitious spending plans.
Biden had already announced his major budget initiatives, but during a rollout Friday he will release them as a single proposal to incorporate them into the government's existing budget framework, including Social Security and Medicare. That provides a fuller view of the administration's fiscal posture.
Republican foes of Biden’s tax proposal could face big capital gains bills if it passes
Rich GOP senators like Ron Johnson, Rick Scott "are the ones with the most to lose," says liberal advocacy group Ron Johnson (R-WI) Samuel Corum/Getty Images
Democratic aides disclosed key elements of the Biden plan, speaking on condition of anonymity because the document is not yet public.
The whopping deficit projections reflect a government whose steadily accumulating pile of debt has topped $28 trillion after well more than $5 trillion in COVID-19 relief. The government's structural deficit remains unchecked, and Biden uses tax hikes on businesses and the wealthy to power huge new social programs like universal prekindergarten and large subsidies for child care.
The budget incorporates the administration's eight-year, $2.3 trillion infrastructure proposal and its $1.8 trillion American Families Plan and adds details on his $1.5 trillion request for annual operating appropriations for the Pentagon and domestic agencies.
Social spending, business tax hike drive $6T Biden budget
WASHINGTON (AP) — President Joe Biden's $6 trillion budget proposal for next year would run a $1.8 trillion federal government deficit despite a raft of new tax increases on corporations and high-income people designed to pay for his ambitious spending plans. Biden had already announced his major budget initiatives, but during a rollout Friday he will release them as a single proposal to incorporate them into the government's existing budgetBiden had already announced his major budget initiatives, but during a rollout Friday he will release them as a single proposal to incorporate them into the government's existing budget framework, including Social Security and Medicare.
It is sure to give Republicans fresh ammunition for their criticisms of the new Democratic administration as bent on a “tax and spend" agenda with resulting deficits that would damage the economy and impose a crushing debt burden on younger Americans. Huge deficits have yet to drive up interest rates as many fiscal hawks have feared, however, and anti-deficit sentiment among Democrats has mostly vanished.
“Now is the time to build (upon) the foundation that we’ve laid to make bold investments in our families and our communities and our nation,” Biden said Thursday in an appearance in Cleveland to tout his economic plans. “We know from history that these kinds of investments raise both the floor and the ceiling over the economy for everybody.”
The unusual timing of the budget rollout — the Friday afternoon before Memorial Day weekend — indicates that the White House isn't eager to trumpet the bad deficit news. Typically, lawmakers host an immediate round of hearings on the budget, but those will have to wait until Congress returns from a weeklong recess.
President Biden has released his $6 trillion budget. Here's what's in it.
President Joe Biden on Friday proposed a $6 trillion budget for fiscal year 2022, laying out details of a proposed dramatic increase in federal spending that serves as the underpinning of an economic agenda that seeks to transform the American economy as the country emerges from dual public health and economic crises. © Evan Vucci/AP President Joe Biden speaks about a cease-fire between Israel and Hamas, in the Cross Hall of the White House, Thursday, May 20, 2021, in Washington.
Under Biden's plan, the debt held by the public would exceed the size of the economy and soon eclipse record levels of debt relative to gross domestic product that have stood since World War II. That's despite more than $3 trillion in proposed tax increases over the decade, including an increase in the corporate tax rate from 21% to 28%, increased capital gains rates on top earners, and returning the top personal income tax bracket to 39.6%.
Like all presidential budgets, Biden’s plan is simply a proposal. It's up to Congress to implement it through tax and spending legislation and annual agency budget bills. With Democrats in control of Capitol Hill, albeit barely, the president has the ability to implement many of his tax and spending plans, though his hopes for awarding greater budget increases to domestic agencies than promised for the Pentagon are sure to hit a roadblock with Republicans. Some Democrats, however, are already balking at Biden's full menu of tax increases.
The Biden plan comes as the White House is seeking an agreement with Senate Republicans over infrastructure spending. There are growing expectations that he may have to go it alone and pass his plans by relying on support from his narrow Democratic majorities in both the House and Senate.
Six takeaways from Biden's budget proposal
President Joe Biden unveiled his first budget proposal on Friday, providing a road map for his policy priorities in the year ahead. © Provided by Washington Examiner While presidential budgets are aspirational and rarely pass Congress as written, the documents are windows into areas the White House would like to focus. They can also provide ammunition to political opponents — as Biden’s quickly did, handing Republicans more fodder for their argument that the president is pursuing a burdensome tax-and-spend agenda.
The flood of new spending includes $200 billion over 10 years to provide free preschool to all 3- and 4-year-olds and $109 billion to offer two years of free community college to all Americans. Also, $225 billion would subsidize child care to allow many to pay a maximum of 7% of their income for all children under age 5. And another $225 billion over the next decade would create a national family and medical leave program, while $200 billion would make recently enacted subsidy increases under the Obama health care law permanent.
It also calls for a major boost to Title I, a federal funding program for schools with large concentrations of low-income students. The proposal would provide $36.5 billion for the program, an increase of $20 billion over current levels. The new funding would be used to increase teacher pay, expand access to preschool, decrease inequities in education and increase access to rigorous coursework, according to a congressional aide briefed on the budget who spoke on condition of anonymity ahead of the official release.
Such increases would drive federal spending to about 25% of the GDP, while the tax increases would mean revenues approaching 20% of the size of the economy once implemented.
Biden releases $6T budget that foresees decade of trillion-dollar deficits
President Biden on Friday proposed a budget that would entrench deficits in excess of $1 trillion for the next decade, pushing the nation's debt burden to record highs.The blueprint released by the White House ties together three major spending proposals already announced by Biden: the $2.3 trillion American Jobs Plan, the $1.8 trillion American Families Plan and $1.5 trillion in discretionary spending for fiscal 2022.Combined with mandatoryThe blueprint released by the White House ties together three major spending proposals already announced by Biden: the $2.3 trillion American Jobs Plan, the $1.8 trillion American Families Plan and $1.5 trillion in discretionary spending for fiscal 2022.
Last year's $3.1 trillion budget deficit under President Donald Trump was more than double the previous record, as the coronavirus pandemic shrank revenues and sent spending soaring.
Speaking from Air Force One, White House press secretary Jen Psaki noted that Biden inherited deficits already swelled by COVID-19 relief and promised that the administration's initiatives “will put us on better financial footing over time.”
And the Biden team says public sentiment is on its side, citing recent opinion polls that show the public largely approves of ideas like boosting spending for roads and bridges and better broadband, as well as its plans to raise taxes on corporations and upper bracket earners.
“The President’s Jobs Plan and Families Plan represent once-in-a-generation investments in our economy, and they put forward a blue collar blueprint to ensure that prosperity is shared by all Americans,” longtime Biden adviser Mike Donilon said in a statement.
Republicans expressed horror at the Biden budget numbers.
“So far this administration has recommended we spend 7 trillion additional dollars this year. That would be more than we spent in adjusted inflation dollars to win World War II,” Senate Republican leader Mitch McConnell said Thursday on CNBC. “So they have huge spending desire and ... a great desire to add in $3.6 trillion in additional taxes on top of it.”
Biden’s $6 trillion budget proposal would rebuild America’s social safety net
Biden’s first budget aims to herald a new era of big governmentAs proposed, the budget would reinvest in infrastructure and education, raise taxes on the wealthy and corporations, and meet many — but not all — of Biden’s campaign promises. It also represents the most substantial expansion of the federal government’s spending powers since World War II and a direct rebuttal of the small-government principles of his Republican, and even many Democratic, predecessors.
Biden's budget assumes the economy will grow by 5.2% this year and 4.3% next year before settling to about 2% growth thereafter.
AP Education Writer Collin Binkley contributed to this report.
Dems start to get tax-hike anxiety .
President Joe Biden’s proposed tax increases are another breed, focused on people making over $400,000 a year. His proposals are far more ambitious than the concessions Obama ended up winning after the 2012 election, which allowed the top income tax rate to rise for high earners. Many Democrats assert that they’re no longer as afraid of the comprehensive defeats they suffered when party leaders like Walter Mondale leaned into big tax hikes.