Biden's reelection budget includes a wide-ranging policy plan that many leading liberals have urged him to adopt as he campaigns for another four years in the White House. The bill has little chance of passing because Republicans control the House of Representatives, but it sets the stage for a likely rematch with former President Donald Trump this fall.
In his $7.3 trillion budget proposal for fiscal year 2025, Biden would ask Congress to provide universal preschool, provide 12 weeks of paid family and medical leave, expand anti-poverty tax credits, and for the first time The government plans to call for the creation of a new tax reduction system for home buyers.
The bulk of the budget would cover essential programs not covered by the spending law, such as Medicare, Medicaid, Social Security and veterans benefits.
The White House said the spending would be more than offset by higher taxes on the wealthiest individuals and corporations. Biden's budget proposal would raise the minimum tax rate on multibillion-dollar companies from 15% to 21%. It would raise taxes on foreign income for U.S. multinational corporations from 10.5% to 21% and eliminate some taxes. Tax deductions for executive compensation.
It would also restore $20 billion in new funding to the Internal Revenue Service (money Congressional Republicans took back in recent spending battles) to train additional oversight of the same individuals and businesses.
“It's clear that the president's economic strategy of building the economy from the middle down is working,” Shalanda Young, director of the White House Office of Management and Budget, told reporters on Monday.
The budget proposal follows the president's State of the Union address, which galvanized Democrats and sparked the Biden campaign's biggest fundraising campaign, setting out Biden's ambitions if he wins the White House for four more years. This is the most powerful demonstration ever.
In his speech, Biden spoke about “building the future of American potential,” which some in Congress are calling the most sweeping social challenge since President Lyndon B. Johnson's “Great Society.”
“Imagine what that would do to America,” Biden said in his speech. “Imagine a future where you can get affordable child care. Millions of families can get it because they need to go to work to help grow the economy. Imagine a future where you have paid time off so you don't have to choose between caring for a sick family member. Imagine a future of home care and elder care. People can stay home and family caregivers can finally get the pay they deserve.”
The Republican Party in Washington It has already rejected some of Biden's proposals. Rep. Jason T. Smith (R-Missouri), chairman of the powerful House Ways and Means Committee, called Biden's homebuyer tax credit the “mortgage aggravation tax credit.”
“The president's proposal is an admission that mortgage rates are too high,” Smith said in a statement Sunday. “…Unfortunately, this misguided response to the interest rate crisis created by the president has done nothing to lower the cost of mortgages and has actually made it even more expensive to own a home.” , which could result in a new financial crisis.”
The Biden administration has been plagued by persistent inflation, but inflation has begun to calm down in recent months. The inflation rate in January was 3.1% year-on-year, a slower rate of increase than the annual rate of 3.4% in 2023, and far below the post-COVID-19 and 40-year peak of 9.1%. Still, it was higher than analysts expected.
Conservatives argue that increasing government spending and expanding social programs would further push up inflation by injecting money into the economy.
Biden's economic advisers rejected that claim Wednesday, saying instead that investments in affordable child care and senior care would give more individuals the opportunity to join the workforce. This would raise wages, increase consumer willingness to buy, and reduce inflation.
Jared Bernstein, chairman of Biden's Council of Economic Advisers, told reporters: “We're very confident that if more caregivers can pay for child care, we'll see an increase in the workforce.” . “Increasing the labor force really helps boost growth. It also helps ease inflationary pressures.”
Congress has yet to pass a spending bill to cover the current fiscal year, which begins Oct. 1, 2023 and ends Sept. 30. Biden's budget will cover the next fiscal year, which begins October 1st.
