Newsman: President Joe Biden’s budget on Friday unveiled the new blueprint to address long-standing inequities in the U.S. economy, with big increases in spending on infrastructure, public health and education along with tax hikes on corporations and the wealthy.
The Biden administration is seeking $1.52 trillion for the military and domestic programs in fiscal year 2022, which begins Oct. 1, an 8.6% increase from the $1.4 trillion enacted last year, excluding emergency measures to combat the Covid-19 pandemic.
Biden’s program breaks with recent presidents’ budgets, which promised that policy proposals would turbo-charge gross domestic product.
The White House detailed costs for its proposals to spend $4.5 trillion over the next decade on infrastructure and social programs, which the administration is hoping to advance through Congress this summer.
The proposal would shift more federal resources from the military, which would see a 1.6% rise in spending next year, to domestic programs such as scientific research and renewable energy, which would get 16.5% more funding under the president’s plan in 2022. The plan includes $17 billion next year for improvements such as repairs to roads, bridges and airports, $4.5 billion to replace lead water pipes across the country, and $13 billion to expand high-speed broadband.
Plans to provide universal preschool and ensure teachers at those schools earn $15 an hour would cost $3.5 billion in 2022. The budget would also provide $8.8 billion next year on direct spending on families, including $6.7 billion for affordable child care and $750 million for paid leave. Those costs would rise substantially in 2023 and beyond.
The proposed 2022 budget request includes funding for early childcare and colleges, investing in minority-owned businesses and grants to improve public transportation in poor communities.
“Where we choose to invest speaks to what we value as a nation,” Biden said in a statement released by the Office of Management and Budget. “It is a budget that reflects the fact that trickle-down economics has never worked.”
The idea is that boosting the middle class and the poorest Americans will provide more stable, long-term growth.
Biden’s central goal is instead societal change — attempting to reverse decades of widening income and wealth gaps that often fall along racial lines.
The White House sees the budget deficit shrinking from the historic pandemic highs, though remaining well above 4% in the outer years of the coming decade, with 4.7% seen for 2031. Inflation, as measured by consumer prices, is seen remaining contained after its pop this spring, with the pace never exceeding an annual 2.3% in the next 10 years.
Biden’s budget plan, headlined with $6 trillion of requested spending for the fiscal year that starts Oct. 1, along with his longer-term proposals, faces major reshaping in Congress. But it serves as a gauge of White House priorities as negotiations proceed with lawmakers. To fund his spending plans, Biden has pitched tax increases on corporations and wealthy American households.
Biden’s Jobs plan would increase taxes on corporations by $2 trillion over the decade. The Families plan includes approximately $1.5 trillion in tax increases on high-earners roughly split from increased rates on income and capital gains, and from increased IRS enforcement and audits. The total spending on tax credits for low-income households, childcare spending and education investments total nearly $1.8 trillion.
Biden’s economic team at the White House has been determined to make good on his campaign pledge to raise taxes on the rich, emboldened by the sharply divergent experiences of those at the top and bottom of the socioeconomic scale during the Covid-19 crisis.
The top 1% of U.S. households experienced a $4 trillion increase in wealth last year, or 35% of total gains, while the poorest half in the country — about 64 million people — saw only 4% of the gains. Much of that accumulated to those investing in stocks and with a college education.
