2024 plan would raise taxes, lower deficit

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2 years ago

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WASHINGTON – After weeks of buildup, President Joe Biden released his proposed budget on Thursday, kicking off what is expected to be months of intense negotiations with congressional Republicans over the nation’s pocketbook.

Here’s the latest:

Top-line items: The budget blueprint, which calls for new taxes on wealthy Americans and promises to trim the federal deficit by nearly $3 trillion over the next decade, will almost certainly be dead on arrival on Capitol Hill.
Defense spending: $26 billion increase in Pentagon spending to $842 billion, a 3.2% increase over 2023 as the Defense Department seeks to confront a variety of challenges from boosting troops’ pay to confronting China.
Border security: Nearly $25 billion to strengthen border security, almost an $800 million increase over the 2023s.
No date yet on GOP budget: Republicans have yet to release their own budget but House Speaker Kevin McCarthy, R-Calif., blasted the president’s proposal as “completely unserious,” in his first public statement on Biden’s budget.

Congress is in charge of writing the federal budget, and Republicans who now control the House have said they have no intention of going along with any plan to raise taxes. The budget negotiations come amid a battle over raising the limit on how much money the federal government can borrow. GOP leaders say they won’t raise the debt ceiling unless Biden agrees to cut spending.

White House officials acknowledged the stakes but urged caution.

“We’re saying don’t wreck this economy over politics,” said Shalanda Young, the White House budget director.

GOP budget response: What budget cuts to Republicans want?

Biden targets gun violence: President’s plan boosts money for DOJ

A nonpartisan watchdog group praised Biden for proposing to trim the federal deficit but warned that his plan doesn’t go far enough.

The Committee for a Responsible Federal Budget said Biden deserves “real credit” for proposing $3 trillion in deficit reduction in addition to paying for his new priorities. But $3 trillion is “a minimum savings target,” and future budget deals will be necessary to put the nation’s debt on a sustainable path, said Maya MacGuineas, the group’s president.

The group also slammed what it called “excessive” spending in Biden’s proposed budget and said the absence of a plan to extend the solvency of Social Security is “a glaring omission.”

– Michael Collins

House Speaker Kevin McCarthy blasts Biden’s budget

In his first public statement on Biden’s budget, Speaker Kevin McCarthy blasted the president’s proposal as “completely unserious.”

McCarthy, who has to negotiate a debt limit deal and spending plan with the president, accused Biden of proposing trillions in new taxes through direct and indirect costs.

“Mr. President: Washington has a spending problem, NOT a revenue problem,” he said.

– Candy Woodall

Quadruple tax on corporate stock buybacks

A new tax that took effect in January on corporate stock buybacks would quadruple under Biden’s proposed budget.

Biden is proposing that companies pay a 4% excise tax on purchases of their own stock. A bill that Biden signed last year requires them to pay a 1% excise tax on stock buybacks.

Companies often buy back their own stock as a way to return cash to their CEOs and investors and to push up the price per share. The practice has become an issue as corporate stock buybacks have exploded in recent years and companies have raked in cash from record-high profits.

Biden’s proposal is an effort to discourage the practice and encourage long-term investments that benefit consumers.

– Michael Collins

Biden pushes for 12 weeks of paid leave in budget

Biden is asking Congress to approve up to 12 weeks of paid family and medical leave as part of his annual budget. He also wants lawmakers to require businesses to give their employees seven days off each year to recuperate from routine illnesses.

In addition, Biden’s plan would allow for time off to handle issues related to a loved one’s military deployment, domestic violence, sexual assault and stalking.

His budget also calls for up to three days of paid time off for bereavement.

Americans who utilize the program would see a portion of their missed wages replaced under Biden’s plan. His budget didn’t say how much money they could get while indicating that lower income Americans would be eligible for greater amounts of money as a percentage of their income than wealthier ones.

Biden did not specify how the proposed program would be paid for, although he said the Social Security Administration would run it and called for a bevy of new taxes on high earners. He asked for $10 million to help states launch and expand paid leave programs, including through grants.

– Francesca Chambers

Capital gains tax to double for wealthy Americans

Wealthy Americans can expect to pay a higher capital gains tax under Biden’s proposed budget.

Biden is looking to nearly double the capital gains tax to 39.6% for single filers making more than $400,000 a year and married couples making more than $450,000 per year. Those filers currently pay a capital gains rate of 20%.

For Americans with more than $1 million in income, the capital gains would be taxed at the same rate as their wage income. Biden also is looking to close a loophole that allows some wealthy investment fund managers to pay tax at lower rates than their secretaries

– Michael Collins

Biden proposes budget increase for border security

As Biden continues to face challenges at the U.S.- Mexico border, the president is proposing nearly $25 billion to strengthen border security — millions more than was enacted in the last fiscal year.

The proposed budget that would go to U.S. Customs and Border Protection and Immigration and Customs Enforcement to hire more personnel, as well as to increase technology at the border. It’s a nearly $800 million increase over the 2023 enacted level when controlling for border management amounts.

According to the Biden administration, with the proposed budget, CBP would be able to hire an additional 350 Border Patrol agents, $535 million would be allocated for border technology at and between ports of entry, $40 million would be used to combat fentanyl trafficking and disrupt transnational criminal organizations, and there would be funds to hire an additional 460 processing assistants at CBP and ICE.

– Rebecca Morin

Social Security: Biden budget release silent on how to keep Social Security afloat long-term

Biden calls for 25% ‘billionaires’ tax’

Wealthy Americans will pay higher taxes under Biden’s proposed budget.

Biden is a calling for a 25% minimum income tax to be imposed on wealthiest 0.01 percent of Americans. The so-called “billionaires’ tax” is similar to a plan that Biden pushed last year, when he called for a 20% minimum tax on multimillionaires and billionaires.

Biden says the new tax would lead to a fairer tax code and would prevent the nation’s highest earners from paying a smaller share than middle-class Americans.

– Michael Collins

Biden boosts Pentagon budget 3.2% to $842 billion

Biden’s budget calls for a $26 billion increase in Pentagon spending to $842 billion, a 3.2% increase over 2023 as the Defense Department seeks to confront a variety of challenges from boosting troops’ pay to confronting China.

Among the budget’s priorities is a 5.2% pay raise for troops, funding to match the threat posed by China and modernizing nuclear weaponry. The Pentagon would receive $9.1 billion for the Pacific Deterrence Initiative to enable U.S. and allied troops to operate in the Indo-Pacific region where China and North Korea are the chief adversaries. The budget includes $37 billion to modernize the missiles, submarines and bombers capable of delivering nuclear weapons.

The budget outline is short on detail for conventional weaponry, but Pentagon officials have stressed the need to restock its arsenal of anti-tank, anti-aircraft and artillery weapons that have been rushed to Ukrainian troops resisting the Russian invasion.

– Tom Vanden Brook

DOJ would get more funding to fight violent crime: White House

The Justice Department would get millions in additional funding to combat gun violence and other violent crime, according to the White House.

The proposal includes $17.8 billion, an increase of $1.2 billion from last year, for law enforcement. The figure includes $1.9 billion for the Bureau of Alcohol, Tobacco, Firearms and Explosives to expand gun trafficking strike forces. The U.S. Marshals Service would get $1.9 billion to support personnel fighting violent crime including catching fugitives. And the FBI would get $51 million to enhance background checks for gun buyers.

Overall, the department would get $39.7 billion, a $2.2 billion or 5.9% increase from last year.

– Bart Jansen

No release date for GOP budget

McCarthy said Wednesday Republicans will release their budget “as soon as we can get it done.”

“We want to analyze (the president’s) budget…and then we’ll get to work on our budget,” he told reporters.

Potential spending cuts the House Budget Committee floated last month include work requirements for food stamps, deep slashes to the Environmental Protection Agency, stopping “woke waste,” rescinding unspent COVID-19 rescue funds, reducing Obamacare subsidies and halting Biden’s plan to forgive student loan debt.

Their framework said Republicans want to “save and strengthen” Social and Medicare but didn’t say how.

Biden to lay out budget in Philadelphia

Underscoring the role Democrats think their fiscal fight with Republicans will play in the next election, Biden is traveling to a union hall in Philadelphia to discuss his budget.

“It’s an opportunity for the president to talk directly to the American people,” said White House press secretary Karine Jean-Pierre.

Biden has repeatedly turned to Philadelphia, a city in a critical battleground state, for major political moments including the rollout of his 2020 presidential campaign and a primetime speech on the fate of democracy.

Biden to propose reducing deficit by nearly $3 trillion

After promising a path to reduce the deficit by at least $2 trillion over the next decade, the White House said Wednesday it found a way to reduce the gap in revenues and spending by nearly $3 trillion.

Deficits would have to be reduced by $5 trillion over ten years to “nearly stabilize” the growth of the federal debt, according to the nonpartisan Congressional Budget Office. Without changes, the debt will become larger than the size of the economy, reaching record levels by 2033.

Biden going after drug companies, oil industry

In addition to new taxes on the wealthy, Biden is also going after “Big Pharma” and “Big Oil” to find new revenues.

As he’s proposed before, Biden wants to eliminate tax incentives for the oil and gas industry, a change the White House says would save $31 billion.

Biden also wants to expand the government’s ability to pay less for prescription drugs for Medicare and Medicaid patients. More limited provisions to do that included in legislation passed last year were fiercely opposed by the pharmaceutical industry. Drug makes argued the changes will hurt their ability to develop new medicines.

Budget part of fight over debt limit

While presidents annually submit a budget request to Congress for the next fiscal year, this year’s proposal comes as Biden and Republicans are locking horns over the government’s ability to pay its existing bills. Unless Congress raises the nation’s borrowing limit, the government could default on its debts this summer, causing economic calamity.

House Republicans say they won’t raise the debt ceiling unless Biden agrees to sharply cut spending. Biden maintains the issues should not be linked to avoid spooking the economy during what could be a protected funding fight.