Biden budget proposal calls for $6tn spending paid for by corporate tax rises
The 1,700-page budget faces uphill battle for approval in Congress due to Republican opposition
US President Joe Biden issued his first full budget proposal Friday, detailing his ambitions to greatly expand the size and scope of the federal government with more than $6 trillion in spending over the coming fiscal year.
Vast new spending would be paired with significant tax increases on corporations and the wealthy. But Congress controls the government’s purse strings, and with Republicans almost uniformly opposed to most of Mr Biden’s spending and all of his tax increases, he and allied Democrats face difficulty enacting any of it into law.
In more than 1,700 pages, the budget illustrates Mr Biden’s uncompromising vision to restore the nation’s infrastructure, expand the social safety net and combat income inequality with some of the highest levels of federal spending of the postwar era.
The president envisions significant funding increases to combat climate change and improve health care, paired with the president’s sweeping families and jobs plans unveiled over the opening months of his presidency.
The White House argues that while those investments might pile on to the federal debt in the early years, permanent changes to the tax code and economic growth will offset the costs in the long run.
“It is a budget that reflects the fact that trickle-down economics has never worked, and that the best way to grow our economy is not from the top down, but from the bottom up and the middle out,” Mr Biden said in a presidential message included in the document.
The budget employs some methodology that Biden’s political opponents would consider gimmicky.
Like his predecessors, the president uses convenient but politically unlikely assumptions about changes to the tax code to reduce projected deficits while simultaneously projecting modest inflation and a broad rebound in US employment.
The White House omitted some of the president’s trickier – and costlier – political ambitions, like offering a government-run plan for Americans buying healthcare coverage. And even accounting for his least likely assumptions, Mr Biden’s budget never balances, projecting annual deficits above $1.3tn for the next 10 years and national debt that hits $39tn, or 117 per cent of annual economic output, by 2031.
“I cannot imagine a worse thing for the economy than higher interest rates, higher inflation and higher taxes,” Kevin Cramer, a Republican senator from North Dakota, said of Mr Biden’s proposal.
The budget proposal also provides greater detail on how Mr Biden’s previously announced jobs and families plans would be implemented, and how the administration envisions new changes to the tax code would work.
In a statement, the US State Department said the $58.5 billion it had requested from the budget would include $10.1bn for global health programmes, with about $1bn in funding to help end the pandemic.
It added the budget request would also fund US commitments to Middle East allies including Israel and Jordan.
"The budget request funds assistance programmes and humanitarian aid for Palestinians, including support for the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA)," the statement read.
"The United States will maintain steadfast support for Israel as the administration renews relations with Palestinian leadership, restores economic and humanitarian assistance for Palestinians and works to advance freedom, prosperity and security for the Israeli and Palestinian people alike."
Updated: May 29, 2021 02:33 PM