President Biden unveiled his budget proposal on Monday, which is designed to grab the attention of voters. The proposal includes tax breaks for families, reduced healthcare costs, decreased deficits, and increased taxes on the wealthy and corporations.
The proposal for fiscal 2025, although unlikely to become law, serves as an election year blueprint, outlining the potential future under President Biden and his fellow Democrats if they secure victory in November. Ahead of last week’s State of the Union address, the president and his aides offered a glimpse into certain aspects of the budget, with the finer details being unveiled on Monday.
If the Biden budget were to be enacted, it has the potential to reduce deficits by $3 trillion over a span of ten years. This would be achieved by increasing tax revenues, which would amount to a total of $4.9 trillion within the same timeframe. Approximately $1.9 trillion would be allocated towards funding various programs, while the remaining funds would be utilized for deficit reduction.
According to Biden aides, their budget is considered both realistic and detailed, in contrast to the Republican’s proposals which they argue are not financially viable.
“We never hear from Congressional Republicans about the specific cuts they make or the people they harm,” emphasized Shalanda Young, the White House budget director. “On the other hand, President Biden is committed to transparency, clearly outlining how he prioritizes the American people in every aspect.”
What’s in Biden’s budget
Parents may see an expansion of the child tax credit in 2025, with payments temporarily returning to the level provided by Mr. Biden’s coronavirus pandemic relief package in 2021. First-time homebuyers could receive a tax credit of up to $10,000 to assist with their down payment. Corporate taxes are expected to increase, and billionaires would be subject to a minimum tax rate of 25%.
In his State of the Union address, President Biden emphasized the importance of granting Medicare the power to negotiate prices for 500 prescription drugs. This move has the potential to generate savings of up to $200 billion over a span of 10 years. While his budget does not provide specific details regarding the number of drug prices that would be subject to negotiations, Biden’s administration remains committed to addressing the issue of exorbitant medication costs.
President set to visit Manchester, New Hampshire on Monday, advocating for broader application of his proposed $2,000 cap on drug costs and $35 insulin, extending coverage beyond Medicare beneficiaries. Additionally, he aims to secure the permanence of certain safeguards within the Affordable Care Act, which are scheduled to lapse next year.
The defense budget for fiscal year 2025 is set to receive approximately $900 billion under the proposed plan, which is $16 billion more than the current baseline.
The Biden administration is actively pursuing additional funding to support Ukraine in its defense against Russia. Additionally, the administration is seeking aid for Israel and humanitarian relief for Palestinians, as outlined in its budget plan. This request for supplemental funding was initially made in October and remains a priority for the administration.
The request for funding to enhance personnel and resources at the U.S. southern border is also being made. However, military spending would decrease by $146 billion over a 10-year period, resulting in a total of $9.57 trillion.
The budget plan focuses on addressing the concerns of families struggling to meet their basic needs, considering the current high inflation rate, which has reached a four-decade peak in 2022. Many individuals feel that they are facing financial difficulties under the leadership of Mr. Biden.
The budget proposal allocates $258 billion to support the construction or preservation of 2 million homes, aiming to tackle the ongoing shortage of housing and the subsequent surge in housing prices. Additionally, families earning under $200,000 per year would be able to avail themselves of child care services, with the majority of eligible households paying no more than $10 per day.
The proposed plan aims to eradicate origination fees on government student loans, potentially resulting in savings of up to $1,000 for borrowers throughout the duration of their loans. Additionally, the plan allocates $12 billion towards assisting universities in devising strategies to decrease their expenses.
Mr. Biden has a golden opportunity to shape the race according to his own terms, much like Donald Trump, the almost certain Republican nominee, aims to unite voters behind his agenda.
“A fair tax code is crucial for investing in the things that make our country great, such as healthcare, education, defense, and much more,” stated Mr. Biden during his State of the Union address last Thursday. He further highlighted that his predecessor had implemented a $2 trillion tax cut in 2017, which primarily favored the top 1% of earners.”
Trump, on the other hand, aims to raise tariffs and boost oil production. He has proposed a “second phase” of tax cuts, considering that certain provisions of the 2017 tax code overhaul will expire after 2025. Additionally, Trump intends to reduce government regulations and tackle the national debt, although he has yet to provide specific details on the potential spending cuts required to achieve this.
“We are going to accomplish things that were deemed impossible,” Trump declared triumphantly following his victories in the Super Tuesday nomination contests last week.
House Republicans passed their own budget resolution for the upcoming fiscal year out of committee on Thursday. They claim that their plan would reduce deficits by $14 trillion over the span of 10 years. However, their proposal relies on optimistic economic forecasts and significant cuts to spending, including $8.7 trillion in Medicare and Medicaid expenses. President Biden has promised to prevent any reductions in Medicare funding.
“The House Speaker, Mike Johnson of Louisiana, stated that the budget blueprint of the House aligns with the values of hard-working Americans. He emphasized that in challenging economic times, it is crucial for the federal government to abide by the principle of not spending beyond its means.”
Congress is currently in the process of working on a budget for the current fiscal year. Over the weekend, President Biden took action by signing a $460 billion package into law, which aimed to prevent a shutdown of various federal agencies. However, it’s essential to note that lawmakers are only halfway through their efforts to address spending for this fiscal year.
