2 years ago
President Joe Biden implored Congress in his budget request Monday to boost military funding by 4 percent and non-defense coffers by 5 percent, while forcing the wealthiest households to pay more taxes.
Republicans are expected to offer a stiff counteroffer — demanding that Biden go even bigger than his proposed $813 billion for the national security budget, and shrink his ambitions for $769 billion in non-defense spending.
The president’s second budget request lays out his spending wishes for the fiscal year that will dawn in October, a month before Election Day in the midterms that could shift control of Congress. Republican leaders are betting they will claw back the majority in at least one chamber, emboldening their push for changes.
Biden's request on Monday already shows how priorities in Washington have shifted of late.
Biden’s call for $773 billion in Pentagon funding is itself an acknowledgment that top lawmakers in both parties have rapidly embraced higher defense totals in the month since Russia invaded Ukraine. Lamenting the shift, progressive Democrats are already urging the president to do everything in his power to “resist” calls for increased defense funding, after they first lost that battle earlier this month when the president signed a $1.5 trillion government funding package that increased current national defense spending by 6 percent.
“Budgets are statements of values,” Biden said in a statement, calling his request a “clear message” that the U.S. values “safety and security at home and around the world,” as well as “fiscal responsibility” and investments in “equitable growth.”
While the new fiscal year doesn’t begin for more than six months, Biden is using his budget request to detail plans he wants Congress to clear before then, including a major tax revamp that could help Democrats revive slices of their beleaguered Build Back Better package.
The president’s budget acknowledges savings and revenue that would flow, for example, from tweaking the tax code and enacting policies that would drive down prescription drug prices — policies Democratic leaders want to pass within a slimmed-down version of the social spending package.
“We've been clear that the president wants to sign legislation that cuts costs for families and reduces the deficit,” White House budget director Shalanda Young told reporters.
The president is asking Congress to impose more aggressive tax rules on the nation’s richest households, a proposal he predicts would drum up $360 billion in revenue over the next decade. The so-called Billionaire Minimum Income Tax would hit taxpayers worth more than $100 million, forcing them to pay at least 20 percent in taxes on both their incomes and unrealized gains like stocks.
Taxing gains like that, before they’re cashed out, would be a substantial change to the way the federal government extracts cash from the top 0.01 percent of households. The Biden administration says true billionaires would make up half of those subjected to the new rules, ensuring “the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters.”
Democrats in Congress already tried to advance similar proposals last year as part of the climate and social spending plan. A whopping offset like that could potentially alleviate worries about deficit spending as Biden attempts to woo moderates such as Sen. Joe Manchin (D-W.Va.), who said this month that he is open to talking about resuscitating some elements of the Build Back Better package, beginning with negotiations on prescription drug savings and tax reform.
Counting the “billionaires” tax plan, the White House predicts the policies Biden outlined in his budget request would reduce deficits by more than $1 trillion over a decade, if enacted.
The budget request acknowledges the spiraling inflation U.S. households have been experiencing in recent months, attributing the rising prices to the pandemic, supply chain issues and the Russian invasion of Ukraine.
Cecilia Rouse, chair of the Council of Economic Advisers, said that by lowering the deficit, the president’s budget policies would “help ease long term inflationary pressures and make our fiscal trajectory more sustainable.”
“We expect the economy to normalize,” Rouse said Monday. “There's tremendous uncertainty, but we and other external forecasters expected inflation will ease over the coming year.”
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