Biden will tax families worth more than $100 MILLION to pay for the biggest federal pay rise since Jimmy Carter and the biggest peacetime military budget in US history – and he thinks STILL he can cut the $2 trillion deficit
- Biden to release budget Thursday in Philadelphia
- It won’t include federal spending cuts, but will include new taxes on the wealthy
- The proposal is expected to be rejected by Republicans
President Joe Biden’s proposed budget will include a 5.2% increase for federal employees, one of the largest peacetime military budgets in recent history and plans to save Social Security and insurance -disease.
That won’t include federal spending cuts, which Republicans have been pushing for as a way to cut the $31.4 trillion federal deficit.
Instead, Biden will pay for his proposals with a series of new taxes on the wealthy and on corporations.
The combination of more spending and more taxes is likely to make his budget dead on arrival when he hits Capitol Hill as Republicans, who control the House, prepare to hammer him as a tax and spendthrift Democrat. .
The GOP has yet to release its own budget proposal, but it is expected to cut foreign aid and cut aid to the poor, including food, health care and housing.
Each party’s plan will serve as the starting point for negotiations between President Kevin McCarthy and Biden on fiscal year 2024 spending, which begin Sept. 1.
It will take the cooperation of both parties to pass a budget that keeps the federal government running – McCarthy needs to keep his Republicans in line in the House and Senate Majority Leader Chuck Schumer will need all of his Democrats in the Senate .
But the vastly different proposals have created a political clash that will play out against the backdrop of election-year politics as Biden prepares to run for a second term and Republicans try to win back the Senate while keeping the House.
Details about the president’s budget, which he will officially unveil Thursday in Philadelphia, have begun to trickle out.
- He will propose a 5.2% raise for federal workers — the biggest White House raise since Jimmy Carter was president, according to the Washington Post. But it falls short of the 8.7% increase wanted by lawmakers — including many Democrats.
- He will push for one of the largest peacetime defense budgets in the country, according to Bloomberg, with $170 billion for arms purchases and $145 billion for research and development. This will give the Department of Defense revenue of $835 billion, up from $816 billion last fiscal year.
- Biden has already released his plan to make Medicare solvent through 2050 by raising taxes on those earning more than $400,000 to 5% from 3.8% and expanding Medicare’s ability to negotiate lower costs for prescription drugs.
- It is likely to reflect these increases in social security contributions to strengthen this program.
- The president also says he can cut federal budget deficits by at least $2 trillion over the next 10 years, The New York Times reported, by initiating a new household tax worth over of $100 million.
The deficit provision will be another point of contention as the country nears its debt limit.
President Biden will release his budget Thursday in Philadelphia
Biden refused to negotiate with Republicans on the issue, demanding a net increase in the debt ceiling, as has been done for former presidents.
But House Republicans have refused to raise the debt ceiling, which caps how much the federal government can borrow, until Biden agrees to cut federal spending.
Republicans will focus on the $31.4 trillion debt in a closed-door meeting on Capitol Hill on Wednesday — the day before Biden reveals his full budget proposal.
Congressional Budget Office chief Phillip Swagel will brief lawmakers on the deficit. He warned that the federal debt will exceed the size of the US economy over the next decade if no action is taken.
The GOP says it wants at least $150 billion in cuts for fiscal year 2024, with the ultimate goal of eliminating budget deficits over 10 years.
Adding to the tension, the federal government is expected to reach its debt ceiling by the summer. Failure to act then could trigger a potentially disastrous default.
Each side blames the other for the high federal deficit.
Republicans say post-pandemic spending under Biden added to the national debt, while Democrats say it was tax cuts for businesses and wealthy individuals that were passed under former President Donald Trump that are the cause.
House Republicans, led by Speaker Kevin McCarthy (above), have yet to release their budget proposal, but it is expected to contain cuts to foreign aid and poor relief
Meanwhile, Republicans are expected to release their budget by April 15.
He is likely to contain foreign aid cuts and drastically cut health care, food aid and housing programs for the poor as part of their efforts to cut federal spending.
GOP leaders have said they will not seek to cut Medicare or Social Security.
In order to push through his budget and counter Biden, McCarthy faces the challenge of holding his two wings of the GOP — lawmakers from competitive House districts and hardline conservatives — together to get the 218 votes he needs.
Biden should oppose cuts for the poor. Many of his post-COVID programs offered the kind of assistance Republicans now want to cut.