Biden’s budget proposal for the 2023 fiscal year starting October 1 lays out his administration’s priorities, including campaign promises to make the wealthy and companies pay more tax. It will have to be passed by lawmakers on Capitol Hill if it is to be anything more than a wish list.
The plan is based on economic assumptions locked in on November 10, well before the start of Russia’s military campaign in Ukraine, which has exacerbated previous inflationary pressures on energy and food prices. Biden’s top economic adviser, Cecilia Rouse, said the administration still sees inflation easing over the coming year.
“The budget I am releasing today sends a clear message that we value fiscal responsibility, safety and security at home and around the world, and the investments needed to continue our equitable growth and build a better America,” Biden said in a statement.
The Democratic president said he was calling for higher defence spending to strengthen the US military and “forcefully respond to (Russian President Vladimir) Putin’s aggression against Ukraine with $1 billion in additional US support for Ukraine’s economic, humanitarian, and security needs.”
He added that his administration was on track to reduce the federal government’s deficit by more than $1.3 trillion this year, halving the deficit from the last year of the previous Trump administration, while expanding the economy.
“My budget will continue that progress, further reducing the deficit by continuing to support the economic growth that has increased revenues and ensuring that billionaires and large corporations pay their fair share,” he said.
Biden’s plan also calls for increased spending on community policing, fighting gun crime, and investing in crime prevention and community violence interventions, as well as added funding for affordable housing.
Forced by disagreements within his own party to continue negotiating on swathes of his domestic “Build Back Better” agenda, Biden’s budget does not include proposals on how to improve the country’s environment, healthcare, education, housing infrastructure and manufacturing competitiveness.
It does call, however, for a new minimum tax requiring billionaires to pay at least 20 percent of their income in taxes, including on the gains on investments that have not been sold.
That tax would apply to 0.01 percent of American households — those worth over US$100 million — with more than half of the new revenue coming from households worth more than $1 billion, the White House said. It would reduce the government deficit by US$360 billion over the next decade, it added.
Biden has long pushed the message that the US tax system rewards the wealthy too much and that the rich should pay for more social services.
The budget also would raise the corporate tax rate to 28 percent while including other changes to the corporate tax code that incentivise job creation and investment.
It calls for US$773 billion for the Department of Defence, which combined with other spending would lead to a total national security budget above US$800 billion. (Reuters)