(WASHINGTON) — President Joe Biden on Thursday will roll out his proposed budget for fiscal year 2024, which the White House has said will reduce the deficit by nearly $3 trillion and include a record amount of defense spending.
The budget unveiling in Philadelphia comes as a larger spending fight looms on Capitol Hill with lawmakers facing a summer deadline to lift the debt ceiling or risk an unprecedented default.
Biden’s trip to Philadelphia, the site of his 2020 campaign headquarters and his prime-time speech ahead of the 2022 midterms about threats to democracy, signals a once arbitrary budget process is part of a wider push to connect with voters ahead of a possible reelection announcement.
The budget is “built on four key values, lowering costs for families, protecting and strengthening Social Security and Medicare, investing in America and reducing the deficit by ensuring that the wealthiest in this country and big corporations pay begin to pay their fair share and cutting wasteful spending on Big Pharma big oil and other special interests,” Office of Management and Budget Director Shalanda Young said on a call with reporters ahead of Biden’s speech.
The budget will include $842 billion in defense spending — an all-time high — as well as $6 billion in support for Ukraine amid Russia’s ongoing invasion.
Among the major domestic spending proposals included in the budget, are an expansion to the Child Tax Credit; a national paid family and medical leave program providing up to 12 weeks of leave; universal preschool; and funding to expand free community college. It would also provide $25 billion for immigration enforcement and $5 billion in new election assistance funding.
To pay for the proposals, Biden is proposing a 25% minimum tax on billionaires and reversing two Trump-era tax cuts: raising the corporate tax from 21% to 28% restoring a 39.6% rate for single filers making over $400,000 and couples earning more than $450,000 annually.
Biden’s budget as proposed is all but dead-on-arrival, as congressional Republicans are generally opposed to any tax increases.
Asked how the administration would respond to criticism that such major tax hikes will hurt economic growth, Cecilia Rouse, chair of the White House Council of Economic Advisers, countered that data shows the 2017 tax cuts didn’t provide a major boost to the economy, as former President Donald Trump said they would.
House Republicans have insisted on significant spending cuts in exchange for raising the debt ceiling to avoid an economically disastrous default, though they’ve yet to reveal they want in and out of the budget. Democrats have called for a “clean” increase to the debt ceiling not tied to federal spending.
House Speaker Kevin McCarthy said Wednesday Democrats were “wrong” to advocate for a clean raise to the debt ceiling after members received a briefing by the Congressional Budget Office, which recently projected the U.S. will add $19 trillion to the federal debt over the next decade.
“We can no longer ignore the major problem that we have: the size of our debt,” McCarthy told reporters. “One thing we have learned through all history: every great society has collapsed after they overextended themselves.”
Asked if there was anything in Biden’s budget he could support based on early reports of what it will include, McCarthy was noncommittal.
“You could always find common ground, a willingness to do that. I have not seen his budget,” McCarthy said. However he was critical of any tax increases, stating, “I do not believe raising taxes is the answer.”
The House speaker also accused Biden of delaying debt ceiling talks, and that Republicans will need to examine his budget proposal before releasing one of their own.
Meanwhile, Biden’s sought to draw a red line on Medicare and Social Security, which together take up a large part of the budget, going after some in the GOP he says want to gut the programs. McCarthy said Medicare and Social Security are off the table in upcoming negotiations.
Ahead of the broader rollout, Biden on Tuesday released his plan to shore up Medicare’s finances through 2050 as the program faces a funding shortfall that could result in benefit reductions by the end of the decade. The plan includes a tax increase on high-earners and expanding drug pricing controls.
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