PHILADELPHIA--U.S. President Joe Biden on Thursday unveiled plans for government spending and higher taxes on the wealthy, choosing the swing state of Pennsylvania to reveal his playbook for an expected 2024 re-election bid.
Speaking at a Philadelphia union hall, the Democratic president challenged Republican opponents on fiscal responsibility, highlighting plans to cut U.S. deficits nearly $3 trillion over 10 years by raising taxes on those earning more than $400,000 a year. Overall, the budget would increase federal spending in the twelve months starting in October to $6.8 trillion from the $6.2 trillion expected to be spent in the current fiscal year.
"For too long, working people been breaking their necks, the economy's left them behind - working people like you - while those at the top get away with everything," Biden told Pennsylvania blue-collar workers, a group he also targeted in his 2020 presidential campaign.
Biden's budget proposal faces stiff opposition from Republican lawmakers emboldened by winning control of the House of Representatives in November's midterm elections. Large parts of his agenda are unlikely ever to be enacted by this Congress. The plan, however, is a political statement that directly challenges Republican House Speaker Kevin McCarthy's threats to block an increase in the $31.4 trillion limit on federal borrowing unless Biden agrees to rein in federal spending.
"I want to make it clear I'm ready to meet with the speaker anytime, tomorrow if he has his budget. Lay it down, tell me what you want to do. I'll show you what I want to do, see what we can agree on," Biden said.
McCarthy and other Republicans on Thursday described Biden's budget plan as "reckless."
The president seeks to fund higher spending and narrowing the deficit by imposing a 25% minimum tax on billionaires and nearly doubling the capital gains tax from 20%, the White House said. He also wants to quadruple a 1% stock buyback tax, potentially picking a fight with some of the investors he would need to call on to finance any re-election campaign. The measures would roll back some corporate tax breaks enacted in 2017 under Republican former President Donald Trump.
Political messaging aside, the Biden budget makes clear one thing - the aging U.S. population means that legally mandated spending on social programmes will continue to be a long-term drag. One in five Americans will be retirement age or older by 2030, the U.S. Census predicts.
The budget projects more than $1 trillion deficits every year over the next 10 years, even if Biden gets his requests for higher taxes and cost-cutting measures. Total U.S. debt would rise to nearly 110% of annual gross domestic product in 2033, a figure that rivals the peaks during the country's mobilization for World War II.
The administration based its budget on a muted, 0.6% inflation-adjusted growth forecast for the current calendar year. It sees unemployment creeping up to 4.6% in 2024 as the Federal Reserve engineers a slowdown to fight inflation, and predicted that effort will succeed in getting consumer prices down by nearly two-thirds from current levels by next year. In each case, the assumptions closely track the projections of economists polled by Refinitiv.
"President Joe Biden's budget is a reckless proposal doubling down on the same Far Left spending policies that have led to record inflation and our current debt crisis," McCarthy and other Republicans said in a statement.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget advocacy group, said the budget did not go nearly far enough to rein in dangerous debt levels. "When it comes to fixing the debt, this is by no means an award-winning budget, but the president deserves at least a participation trophy," she said in a statement.
