Biden’s budget plan highlights divisions ahead of polls

WASHINGTON — US President Joe Biden unveiled an ambitious $7.3 trillion budget proposal, with an aim to convince the public that he can run the economy better than his predecessor Donald Trump.

But the budget is almost certain to be dead on arrival in the sharply divided US Congress ahead of national elections later this year.

Instead, the 2025 budget serves as a blueprint of the administration’s policy priorities, and highlights the sharp divisions between Democrats and Republicans ahead of Biden’s likely rematch with former president Donald Trump in November.

In a speech in Washington on Monday before the proposals were published, Biden touted the US economy as a “great comeback story”.

The $7.3 trillion budget plan contains a number of populist measures proposed previously — without success — including a 25 percent minimum tax rate for the wealthiest people in the United States, and a hike in the corporate tax rate from 21 to 28 percent.

It includes plans to strengthen social spending programs, such as restoring a popular child tax credit, and allocates almost $260 billion to “build or preserve” 2 million housing units, according to a statement from the White House.

In line with Biden’s previous proposals, the 2025 budget would ensure that “people making under $400,000 will not pay a single penny more in taxes”, Biden’s budget director Shalanda Young told reporters on Monday.

Under Biden’s plan, the deficit over the next decade would be $3 trillion lower than under its current trajectory, according to White House estimates. However, the national debt — currently at $34.5 trillion — would continue to increase.

The reduction to the deficit would be paid for through increased taxes for the wealthy and corporations, and by “closing tax loopholes and cutting wasteful spending on Big Pharma, Big Oil, corporate jets and other special interests, and cracking down on wealthy tax cheats”, according to the White House statement.

While many of the policies in this budget proposal are popular with the Democratic base, they face stiff opposition from Republicans as well as more moderate Democrats and independents in Congress, underscoring the challenge the administration now faces.

“The price tag of President Biden’s proposed budget is yet another glaring reminder of this Administration’s insatiable appetite for reckless spending and the Democrats’ disregard for fiscal responsibility,” Republican leaders, including House Speaker Mike Johnson, wrote in a statement posted to X.

“Biden’s budget doesn’t just miss the mark — it is a road map to accelerate America’s decline,” they claimed.

Given the stalemate between Republicans and Democrats over the current budget — which has yet to be fully adopted — Congress is highly unlikely to pass anything resembling Biden’s proposal by the end of the current fiscal year on Sept 30.

Wish list

With elections looming, in which all seats in the House of Representatives and one-third of the Senate are up for grabs, along with the presidency, the divisions between the two parties are only likely to grow in the coming months.

Consequently, Monday’s budget proposal reads as more of a wish list of progressive policy proposals for the campaign trail than a long-term plan for funding the US government.

Meanwhile, Biden clashed with Trump over healthcare and social benefits on Monday as Biden visited another battleground state in November’s election.

Trump said in an interview on Monday that he would back cuts to social spending. “There is a lot you can do in terms of entitlements in terms of cutting,” Trump told CNBC.

Biden hit right back in an event in the northeastern state of New Hampshire, accusing Trump of backing measures that would favor wealthy people. “The bottom line is, he’s still at it,” said Biden.

Biden accused Trump of wanting to cut taxes on the rich and said his economic and social policies had sparked an “American comeback”.

Biden has branded Trump a threat to democracy, referring to the former president’s refusal to acknowledge his 2020 election defeat.

Impeached twice while in office, Trump now faces four criminal indictments, including two for trying to overturn the election result four years ago.