Just yesterday, President Joe Biden released his plans for his budget. One of the highlights of his budget is that he plans to cut $3 trillion from the federal deficit over the course of the next decade. Part of the way he plans to do this is by creating a minimum tax of %25 on the wealthiest Americans. In addition to this, he would be increasing the corporate tax rate on oil and gas companies from 21% to 28% and allow Medicare to negotiate drug prices. The President submits this budget to Congress as a way to outline what his administration will prioritize in the upcoming year, but it is Congress that will ultimately decide where exactly the funds are allocated.
Ensuring everyone pays their fair share
One of the main ways President Biden plans to decrease the federal deficit over the next decade is to ensure everyone pays their fair share when it comes to taxes. This comes with a large focus on the wealthiest Americans in the country. The administration plans to cut deficit spending by ensuring big corporations and wealthy Americans begin to pay more of a fair share. Reducing spending on pharmacy and big oil are some other ways the administration hopes to cut the deficit.
In contrast to increasing what the wealthy pay, Biden’s budget intends to decrease what the average American family pays in living expenses. Because the Covid-19 pandemic has begun to slow down, there is less emergency funding that is needed to be directed towards it. As a result, these funds can be used elsewhere. President Biden intends to prioritize an increase in the funding of early childhood education/childcare, expanding free community college, and expanding the $35 cap on insulin prices to all Americans.
Social programs to boost the economy
Cecilia Rouse, chair of the Council of Economic Advisers, stated how the Biden administration believes the social programs that have been outlined in the President’s budget will actually provide a boost to the economy. Rouse stated: “Policies such as paid leave and child care will bring more workers into the labor force and improve productivity. Investments in early education, mental health and community college not only expand our economy’s productive capacity but pay dividends for generations to come (source).”
The budget doesn’t include just social spending, however, and also includes stronger defense funding of over $835 billion. This would make the defense budget alone one of the largest peacetime expenditures in the history of the U.S.
Biden’s plans for negotiating
President Biden has stated that he hopes to speak with House Speaker, Kevin McCarthy and lawmakers after they both introduce their budgets. Biden stated that “We’ll sit down and we’ll go line by line, and we’ll go through it and see what we can agree on, what we disagree on, and then fight it out in the Congress. I’m ready to meet with the Speaker anytime, tomorrow if he has his budget. Lay it down, show me what you want to do, I’ll show what I want to do. We can see what we can agree on, see what we don’t agree on and we vote on it.” It’s too early to tell what kind of agreement would be met between both parties related to the budget, but chances are the actual budget that we see will be rather different from what is being proposed by Biden at the moment.
What about the debt ceiling?
There is still currently much debate over whether or not the debt ceiling should be raised. President Biden and The White House have stated that the debt ceiling should simply be raised as it has been in the past. This is opposed by House Republicans, however, as they believe the debt ceiling should be tied to future spending and that they will not budge unless there are promises to decrease spending. The future will tell what happens with the debt ceiling, but as mentioned before, historically it has simply been raised. The U.S. has never had to default on its debt, so it is highly unlikely something like this will happen. Sooner or later, Congress will have to negotiate on how the debt ceiling will be increased as we get closer to it.
In conclusion, Biden’s budget for 2024 covers quite a few areas. Whether or not Biden will be able to lower the federal deficit by $3 trillion in the next decade is something we will only be able to tell with time. This is also assuming everything proposed in the budget comes into fruition. Biden is yet to negotiate his budget with House Republicans, so we will have to wait and see how things play out from here. The Presidential Election next year will also be a factor into what happens with Biden’s budget plans.