President Biden proposed a $7.3 trillion budget on Monday filled with tax increases on corporations and high earners, new spending on social programs and a wide range of efforts to combat high consumer costs such as housing and college tuition.
The proposal includes only relatively minor changes from the budget plan Mr. Biden submitted last year, which was not in Congress, although it reiterated his call for lawmakers to spend about $100 billion to strengthen border security and deliver aid to Israel and Ukraine.
Most of the new spending and tax increases included in the fiscal year 2025 budget have little chance of becoming law this year, as Republicans control the House and strongly oppose Mr. Biden’s economic agenda. Last week, House Republicans passed the budget proposal outlining their priorities, which are far from what Democrats are asking for.
Instead, the document will serve as a draft of Mr. Biden’s policy platform as he seeks re-election in November, with a series of contrasts intended to differentiate him from his presumptive Republican opponent, former President Donald J. .Trump.
Mr. Biden sought to regain strength on economic issues among voters who gave him low marks amid high inflation. This budget aims to portray him as a champion of increased government aid for workers, parents, manufacturers, retirees and students, as well as the fight against climate change.
Speaking in New Hampshire on Monday, Mr. Biden touted the budget as a way to raise revenue to pay for his priorities by raising taxes on the wealthiest Americans and big corporations.
“I’m not anti-corporation,” he said. “I’m a capitalist, man. Make all the money you want. Just start paying your fair share in taxes.”
The budget proposes about $5 trillion in new taxes on corporations and the wealthy over a decade. Administration officials said Monday that those increases would be split evenly between corporations and the nation’s top earners, and that Americans making less than $400,000 a year would enjoy the cuts. of taxes totaling $750 billion under their plans.
“We can make all our investments by asking those in the top 1 and 2 percent to pay more into the system,” Shalanda Young, the director of the White House budget office, told reporters.
The president has already begun to try to describe Mr. Trump by contrast: a supporter of further tax cuts for the wealthy. “Do you think the rich and big corporations need another $2 trillion tax break?” Mr. Biden asked in New Hampshire, referring to Mr. Trump — but not by name. “Because that’s what he wants to do.”
Speaker Mike Johnson and other members of the House Republican leadership criticized Mr. Biden in a statement released Monday afternoon. “The price tag of President Biden’s proposed budget is another glaring reminder of this administration’s insatiable appetite for reckless spending and Democrats’ disregard for fiscal responsibility,” they said.
Polls have found that Americans are unhappy with Mr. Biden’s handling of the economy and favor Mr. Trump’s approach to economic issues. But the president has not wavered from his core economic policy strategy, and the budget shows he is not deviating from that plan.
Mr. Biden’s budget proposes about $3 trillion in new measures to reduce the federal deficit over the next decade. That’s in line with his budget proposal last year, which narrowed deficits by raising taxes on businesses and the wealthy and by allowing the government to negotiate more aggressively with pharmaceutical companies to reduce spending on prescription drugs. .
The budget again calls for raising the corporate tax rate to 28 percent from 21 percent, the level Mr. Trump set in the tax bill he signed in late 2017. It raises a new minimum tax on large corporations and quadruple the tax on stock buybacks, among other efforts to raise more revenue from companies and individuals making more than $400,000 a year.
Those savings would build on discretionary spending limits that Mr. Biden and congressional Republicans agreed to last year to resolve a standoff over raising the nation’s borrowing limit. They would still leave the country with a historically high budget deficit: about $1.6 trillion a year on average over the next decade, according to administration projections. As a share of the economy, deficits will decrease during that time — but total government debt as a share of the economy will increase.
House Republicans released a budget last week aimed at reducing deficits faster — balancing the budget by the end of the decade. Their savings depended on forecasts of economic growth that exceeded mainstream forecasters’ expectations, along with steep and often unspecified spending cuts.
The nonpartisan Committee for a Responsible Federal Budget called the Republican plan “unrealistic in its assumptions and results.” On Monday, the group called Mr. Biden’s proposed deficit reduction “a welcome start, but a very timid one.”
Mr. Biden and his aides have repeatedly said they believe the projected shortfalls in his budgets will not harm the economy. Ms. Young and Jared Bernstein, who chairs the White House Council of Economic Advisers, reiterated that position Monday, even after acknowledging that today’s budget projects higher government borrowing costs over the next decade than previous ones. budget.
Instead of turning to more aggressive deficit reduction, as previous Democratic presidents have done after losing control of one chamber of Congress, Mr. Biden has leaned on the need for new spending programs and targeted tax incentives to boost growth and the middle class.
The new proposal continues that trend. It would create a national paid leave program for workers. It would restore the expanded child tax credit that Mr. Biden temporarily created in his $1.9 trillion economic stimulus law in 2021. That credit helped reduce child poverty significantly in the year before it expired. That rollback will last only one year, but administration officials said Monday they hope to make it permanent as part of a broader debate on taxes by 2025.
The budget also includes new efforts to help Americans struggling with high costs. That issue caused Mr. Biden among voters since inflation on his watch has risen to its highest level in four decades, though price increases have cooled over the past year. Mr. Biden previewed many of those efforts in his State of the Union address last week, including new tax credits for certain home buyers and expanded assistance for people who buy health insurance through the Affordable Care Act.
Mr. Biden also called for new efforts to improve the solvency of Social Security and Medicare. In the budget, he opposed benefit cuts for programs and any additional contributions from workers making less than $400,000 a year.
On Monday, Ms. Young said Mr. Biden would look to strengthen Social Security in part by targeting the income limit subject to the payroll taxes that feed the program — a move he specifically endorsed for Medicare. He said Mr. Biden would improve its solvency “by asking high-income Americans to pay their fair share. If you make a million dollars in this country, you’re done paying your taxes on Social Security sometime in February.”
In another key area, Mr. Biden’s proposal focuses on key details: what to do about provisions of the 2017 Republican tax law, including tax cuts for individuals, that expire in 2025. The budget calls that expiration, written into law to curb its estimated cost, “fiscally reckless.” But it did not specify how Mr. Biden would deal with expirations if he wins a second term.
Instead, the budget said Mr. Biden would seek to extend tax breaks for people making less than $400,000 a year, offset by “further reforms to ensure that wealthy people and large corporations pay their fair share.”
