The suggested $6.9 trillion for the federal government’s operations would constitute a $1.1 trillion increase from the $5.8 trillion proposed by the White House for the previous fiscal year. The budget would decrease the total deficit over the next decade from $20 trillion to $17 trillion.
Senior Republican officials announced that they would oppose the plan, which hinges upon expanded social programs and higher taxes. “President Biden just delivered his budget to Congress, and it is completely unserious. He proposes trillions in new taxes that you and your family will pay directly or through higher costs,” House Speaker Kevin McCarthy (R-CA) remarked on social media. “Washington has a spending problem, not a revenue problem.”
Senate Finance Committee Chairman Mike Crapo (R-ID) likewise asserted that the budget proposal fails to encourage job creation and higher wages while increasing tax burdens and expenditure levels. “The President’s budget makes clear the administration has not learned from its mistakes that have led to two years of record-high inflation and excessive deficit spending. Instead, this administration is doubling down with more of the same,” he commented. “Revenues are not the problem; Washington’s insatiable appetite for unfettered spending is the problem.”
The budget is expected to fail in the House of Representatives, which is controlled by Republicans as a result of the midterm elections, and face opposition from Republicans in the Senate. “The federal government can’t get enough of taxpayers’ hard-earned dollars,” Sen. Marsha Blackburn (R-TN) said in a statement, adding on social media that “Joe Biden’s disastrous budget will be dead on arrival.”
The budget proposal includes several tax hikes on affluent households, including a new 25% minimum tax on those with more than $100 million in wealth and an increase in the top marginal tax rate to 39.6% from the current 37%, which would represent a return to levels seen before the Tax Cuts and Jobs Act of 2017. Businesses would see an increase in the corporate tax to 28%, which would split the difference between the current 21% rate and the previous 35% rate that was in effect before the Tax Cuts and Jobs Act, while the budget would also quadruple the stock buyback tax from 1% to 4% such that companies invest unused profits in operations.
Democratic lawmakers praised the social initiatives that would be funded by the budget, including childcare benefits and higher education programs. “President Biden’s budget plan fits the needs of American families,” Senate Majority Leader Chuck Schumer (D-NY) commented in a statement. “It is a roadmap that will lead our country to a better future.”
The budget proposal comes as Biden and McCarthy negotiate to decrease long-term spending after the debt ceiling, an arbitrary cap on the national debt established by Congress, exceeded the statutory limit of nearly $31.4 trillion earlier this year. Each official has said they will not consider reforms to Social Security and Medicare, raising questions as to whether meaningful spending cuts will be possible since the two programs constituted more than half of the federal budget during the last fiscal year.