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Live Updates: Biden’s $6.8 Trillion Budget Pitch Sets Up a Showdown


WASHINGTON – President Biden on Thursday proposed a $6.8 trillion budget that seeks to increase spending on the military and a host of new social programs while reducing future budget deficits. , despite Republican calls to downsize the government and reaffirm his economic vision ahead of a tentative re-establishment. -Electoral campaign.

The budget includes about $5 trillion in proposed tax increases for high-income earners and corporations over a decade, much of which will offset new spending programs targeting the upper class. middle class and the poor. It seeks to reduce the budget deficit by nearly $3 trillion during that time, compared with the country’s current path.

It reaffirms Mr. Biden’s case that he can stop Increasing debt burden from weighing on the economy while expanding spending and protecting popular safety net programs – almost entirely by requiring companies and the wealthy to pay more taxes.

Shalanda D. Young, director of the White House budget office, told reporters on Thursday: “This president clearly believes that the way to grow this economy is to invest in the middle class and working families. “I would consider our plans financially responsible any day.”

But after claiming credit for the annual deficit fell by $1.7 trillion over the past year, Mr Biden now sees the deficit rising again in fiscal year 2024, to $1.8 trillion . The jump was larger than that of other forecasters, such as the Congressional Budget Office. It is fueled by the growing cost of servicing the national debt as the Federal Reserve raises interest rates to curb inflation, and by the new programs the president is proposing that are not fully offset by tax increases. in the first year.

The plan is sure to draw swift criticism from Republicans, who are embroiled in a dangerous economic debate with Mr Biden over the borrowing limit, the limit that conservatives in the House of Representatives refused to raise unless he agreed to drastically cut spending. The proposals have little chance of becoming law because Republicans took control of the room in November

Instead, Mr. Biden’s budget request is a political statement of values ​​intended to appeal to the public in the debt limit battle and the nascent 2024 campaign. He was due to announce it Thursday afternoon during a speech in Philadelphia – a scene in flux.

“The budget reflects our values ​​as a nation — a nation of good people, growing in a new age of possibilities and a beacon to the world,” Biden said. written in the introduction of the document. “Together, let’s put those values ​​into practice and demonstrate that democracy works as we continue to build a stronger, more equitable economy that leaves no one behind. behind.”

The proposals represent his early success in expanding the federal government’s role in the economy, and they reaffirm his efforts to achieve more. Under Mr Biden, its figures show that domestic spending in areas such as research and support for manufacturing has increased significantly as a share of the economy compared to the level considered. in the budget proposals of the last Democratic administration, under President Barack Obama, when he . Biden is vice president.

Mr. Biden met with construction workers at a new Intel semiconductor manufacturing facility in New Albany, Ohio, in September 2022. The plant is part of his plan to rebuild manufacturing. United States through the Science and CHIPS Act.Credit…Pete Marovich for The New York Times

During his first two years as president, Biden signed legislation expanding and rebuilding critical infrastructure like water pipelines and highways, boosting the production of semiconductors and other public goods. other high-tech technologies in the United States, while accelerating the transition from fossil fuels to low-emission sources. energy to combat climate change. He provided military aid to Ukraine in its war against Russia and signed a bipartisan law to increase federal medical care for veterans exposed to toxic burn pits.

He’s gone too much of his economic agenda is unfinisheda fact reflected in his budget, which re-calls for programs that were not passed when his party controlled Congress.

Presidential budget proposes $400 billion to provide affordable child care for parents, $150 billion for home care for older Americans and people with disabilities, and nearly 400 billion dollars to support permanently expanded health coverage through the Affordable Care Act. He will spend $325 billion to ensure workers get paid leave and nearly $300 billion combined for free community colleges and kindergartens for students. He proposed an additional $100 billion to reduce housing costs for homeowners and renters.

Mr Biden will reinstate the three-year extended child tax credit, which was included in the economic aid bill he signed in 2021 but expired last year as a measure to reduce child poverty. . He’s going to make a permanent change in credit allowing people to fully benefit from it even if they don’t earn enough to owe federal income tax. Together, the changes will cost more than $400 billion.

To help offset the costs, Mr. Biden proposed a series of tax increases for corporations and the wealthiest Americans. These include a 25 percent tax aimed at billionaires (he proposed a similar tax last year but at a lower rate: 20 percent). He also proposed a quadruple tax on stock buybacks and went on to call for the cancellation of President Donald J. Trump’s tax cuts for high earners and an increase in the corporate income tax rate. from 21% to 28%.

Mr. Biden proposes raising and expanding taxes on Americans earning more than $400,000 as part of efforts to stretch Medicare’s ability to pay for a quarter of a century. He is also proposing new savings to the government based on more aggressive negotiation of prescription drug prices.

But for the third consecutive budget, Mr. Biden did not propose any new initiatives to expand Social Security’s solvency – unlike during the 2020 campaign, when he proposed expanding benefits and strengthening the program’s trust fund by effectively increasing payroll taxes on earners. more than $400,000 a year.

Last year’s budget painted a rosy and ultimately over-optimistic picture of the US economy. The government expects gross domestic product to grow 4.2 percent for example, after adjusting for inflation, but in the end it increased more modestly 2.1 percent.

New budget predictions have been more muted. The White House sees the economy growing only 0.6 percent after adjusting for inflation this year, a weak pace in line with outside expectations. Even more remarkable, the White House is predicting a significant increase in the unemployment rate – to 4.3%, a notable increase from 3.4 percent in January. Alongside that slowdown, inflation is expected to be moderate.

Mr. Biden sees the total national debt growing by about $18 trillion through 2033, to over $50 trillion. But his budget suggests growth won’t threaten the economy. “The economic debt burden will remain low and consistent with recent historical experience over the next decade,” administration officials wrote in the proposal.

Much of the budget’s content is leftovers from Mr. Biden’s previous proposals. But it also includes a few new ones. One of them is the tax on energy used to create new digital currency assets, known as cryptocurrency mining. That activity relies on large amounts of electricity and produces emissions that contribute to climate change.

Administration officials want to discourage the practice, which they say will hinder the country’s energy transition. So they proposed a 30% tax on the electricity used therein, to be implemented gradually over three years, whether it be from an electric utility or a local source like solar panels. family, on the theory that the energy involved would be better spent in other uses.

Jeanna Smialek, Ana Swanson And Alan Rappeport contribution report.

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