President Biden unveiled a budget proposal on Monday that seeks to capture the attention of voters. The plan includes enticing tax breaks for families, reduced healthcare expenses, decreased deficits, and increased taxes for the wealthy and corporations.
The proposal for fiscal 2025, although unlikely to pass the House and the Senate and become law, serves as an election year blueprint, offering a glimpse into the potential future if President Biden and his fellow Democrats secure victory in November. Last week’s State of the Union address provided a preview of certain aspects of the budget, with the finer details being revealed by the president and his aides on Monday.
If the Biden budget were to be enacted, it could reduce deficits by $3 trillion over a span of ten years. The budget aims to generate $4.9 trillion in additional tax revenues during this timeframe, allocating approximately $1.9 trillion for various programs and utilizing the remaining funds to address the deficit.
According to Biden aides, their budget has been described as both realistic and detailed, unlike the rival measures proposed by Republicans, which they argue are not financially viable.
According to White House budget director Shalanda Young, Congressional Republicans fail to disclose the specific cuts they make and the people they harm. In contrast, President Biden is committed to transparency and consistently provides detailed plans that demonstrate his dedication to valuing the American people.
What’s in Biden’s budget
In 2025, parents may receive a higher child tax credit, with payments temporarily reverting to the 2021 level. This increase in credit is made possible by the funding provided by Mr. Biden’s coronavirus pandemic relief package. Additionally, first-time homebuyers could benefit from a tax credit of up to $10,000, specifically aimed at assisting with down payments. On the other hand, corporate taxes are expected to rise, and billionaires would be subject to a minimum tax of 25%.
In his State of the Union address, Mr. Biden emphasized the need for Medicare to have the power to negotiate prices on 500 prescription drugs. This initiative has the potential to save a significant amount of money, estimated at $200 billion over a span of 10 years. While the exact number of drugs that would be subject to negotiations is not specified in his budget, the emphasis on this issue highlights the importance of addressing the rising costs of medication.
President Trump is set to visit Manchester, New Hampshire on Monday, where he will urge Congress to extend his proposal of capping drug costs at $2,000 and $35 for insulin to cover all individuals, not just those with Medicare. Additionally, he will aim to make certain provisions of the Affordable Care Act, which are scheduled to expire next year, permanent.
In fiscal year 2025, the proposal aims to allocate approximately $900 billion for defense, which is approximately $16 billion higher than the baseline amount.
The Biden administration is actively pursuing funding to support Ukraine in its defense against Russia, as well as providing aid to Israel. This commitment is evident in the budget plan, which reiterates the previous request for supplementary funds made in October. The funding is intended to assist Ukraine, Israel, and provide humanitarian relief for Palestinians.
The request for funding to expand personnel and resources at the U.S. southern border is also being made. However, military spending is projected to decrease by $146 billion over the next 10 years, resulting in a total budget of $9.57 trillion.
The budget plan focuses on assisting families in affording their essential needs, recognizing that the rising inflation in 2022 has led many voters to believe they are experiencing a decline in their financial well-being under President Biden.
The budget proposal allocates $258 billion to support the construction or preservation of 2 million homes, aiming to tackle the ongoing shortage that has contributed to high housing prices. Additionally, families with an annual income below $200,000 would be provided with affordable child care, ensuring that most eligible households pay no more than $10 per day.
The proposed plan aims to eliminate origination fees on government student loans, potentially resulting in savings of up to $1,000 for borrowers throughout the duration of their loan. Additionally, the plan allocates $12 billion towards assisting universities in devising strategies to lower their expenses.
Mr. Biden sees this as an opportunity to shape the race according to his own vision, just like Donald Trump, the likely Republican nominee, aims to unite voters behind his agenda.
“A fair tax code is our way of investing in the things that make our country great: healthcare, education, defense, and much more,” stated Mr. Biden during his State of the Union address last Thursday. He further highlighted that the previous administration had implemented a $2 trillion tax cut in 2017, which primarily favored the top 1% of earners.”
Trump aims to boost tariffs and increase oil production. He is pushing for a “second phase” of tax cuts, as certain provisions from the 2017 tax code overhaul are set to expire in 2025. Additionally, the Republican leader plans to reduce government regulations and address the national debt, although he has yet to specify the extent of the necessary spending cuts.
“We will accomplish things that were once deemed impossible,” stated Trump confidently following his triumphant victories in the Super Tuesday nomination contests last week.
House Republicans took a significant step on Thursday by passing their own budget resolution for the upcoming fiscal year. Their plan aims to reduce deficits by $14 trillion over the next decade. However, it relies on optimistic economic predictions and entails substantial spending cuts, including a reduction of $8.7 trillion in Medicare and Medicaid expenses. President Biden, on the other hand, has made a commitment to preventing any cuts to Medicare.
“The House’s budget blueprint embodies the principles of diligent Americans who understand the importance of fiscal responsibility even in challenging economic circumstances. Just as hard-working individuals prioritize spending within their means, our federal government must adopt the same approach,” remarked House Speaker Mike Johnson of Louisiana.”
Congress is currently in the process of developing a budget for the present fiscal year. Over the weekend, President Biden took action by officially approving a $460 billion package aimed at preventing a shutdown of various federal agencies. However, it is important to note that lawmakers are only halfway through addressing the spending requirements for this fiscal year.
