Sunday, June 23, 2024

Analysis: Biden’s $6 trillion budget draws pushback

by BIZ Magazine

By Casey Harper | The Center Square

President Joe Biden’s latest budget proposal fits the model of his other plans with higher taxes and a spike in federal spending. But the new plan has drawn opposition just as his earlier spending proposals have.

Biden released his proposed budget Friday, which combines his previously proposed infrastructure and “American Families Plan” in addition to more proposed spending items, all of which totals $6 trillion.

“Today, I released my budget for the upcoming fiscal year. It builds on the progress we’ve made over the last few months and makes historic investments that will help our nation build back better for decades to come,” Biden said Friday.

The proposed spikes in spending raises the question: how will the federal government pay for it? Biden’s budget includes the same proposed tax hikes from his previously proposed spending plans, which would fund a range of progressive proposals from free community college to up to 12 weeks of paid family leave.

Those tax increases include raising the corporate tax rate from 21% to 28% and eliminating methods corporations use to lower their tax burden. Biden has also proposed raising funds by increasing the Internal Revenue Service’s auditing of corporations.

“The American Jobs Plan reforms the corporate tax code to incentivize job creation and investment here in the United States, stop unfair and wasteful profit shifting to tax havens, ensure that large corporations are paying their fair share, and stop a race-to-the-bottom in corporate tax rates around the world,” the White House said. “The American Families Plan revitalizes tax enforcement to ensure that high-income Americans pay the tax they owe under the law – ending the unfair system of enforcement that collects almost all taxes due on wages, while regularly collecting a smaller share of business and capital income. The plan will eliminate long-standing loopholes, including lower taxes on capital gains and dividends for the wealthy, that reward wealth over work.”

The plan would also extend Biden’s child tax credit payments, which begin going to families on a monthly basis in July as well as expanded health insurance tax credits passed in the COVID relief bill earlier this year.

“These improvements are lowering premiums for 9 million current enrollees by an average of $50 per person per month and making them permanent will let an estimated four million uninsured people gain coverage,” the White House said.

Democrats largely expressed support for Biden’s budget, though the presidential proposals are more symbolic gestures of where the party wants to focus its spending and inform the debate rather than wholesale budgets that are expected to actually pass Congress.

“We will lower prescription drug costs and strengthen Medicare, Medicaid and the Affordable Care Act, while taking transformative action for families to lower child poverty and make improvements in housing, child care and other vital lifelines for families,” House Speaker Nancy Pelosi, D-Calif., said. “Congressional Democrats look forward to working with the Biden-Harris Administration to enact this visionary budget, which will pave the path to opportunity and prosperity for our nation.”


Republicans reacted sharply to the bill’s release, raising the alarm about the soaring debt and the economic fallout of the proposed tax increases.

“Now, President Biden wants to push our economy to the breaking point by borrowing trillions more so he can spend more money than America spent at the height of World War II,” House Minority Leader Kevin McCarthy, R-Calif., said. “This means more taxes, more inflation, and more unsustainable debt. Despite months of delay that should have provided perspective to the administration, President Biden has sent a message today that he wants to double down on the failed economic policies that have derailed our economic recovery in the first five months of his term.”

Defense spending has quickly become a rallying point of opposition for many on the right. The Defense budget under Biden expands by only 1.7%, to $715 billion, which experts say will not keep pace with inflation.

“President Biden’s budget is dead on arrival – just like all other presidential budgets,” said Sen. Lyndsey Graham, R-N.C. “It is insanely expensive. It dramatically increases nondefense spending and taxes. Over time it will result in a weakened Department of Defense.”

The budget also sparked controversy for omitting the Hyde Amendment, a budget line item pushed for by Republicans that bans federal funding for abortions.

“You heard that right. POTUS’ budget doesn’t include the Hyde Amendment,” said Rep. Kat Kammack, R-Fla. “The Biden administration wants American taxpayers to pay for abortions.”

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