Biden budget with deficit cuts, tax hikes won’t fly with GOP

WASHINGTON (AP) — As political gridlock puts the government at risk of defaulting, President Joe Biden on Thursday is making an opening offer with a budget plan that would cut deficits by $2.9 trillion over the next decade — a proposal that Republicans already intend to reject.

It's part of a broader attempt by the president to call out House Republicans who are demanding severe cuts to spending in return for lifting the government's legal borrowing limit. But the GOP has no counteroffer so far, other than a flat "no" to a Biden blueprint with tax increases on the wealthy that could form the policy backbone of Biden's yet-to-bedeclared campaign for reelection in 2024.

"Congressional Republicans keep saying they want to reduce the deficit, but they haven't put out a comprehensive plan showing what they'll cut," said Shalanda Young, director of the White House Office of Management and Budget. "We're looking forward to seeing their budget so the American people can compare it to what we're putting out today."

Biden's package of tax and spending priorities is unlikely to pass the House or Senate as proposed.

House Speaker Kevin McCarthy, R-Calif., said the president's proposed deficit reduction was inadequate. "It just seems like it's going to create the biggest government in history. I don't think that's what we need at this time," he said.

The president was traveling to the political battleground state of Pennsylvania to promote the plan, staking out what he believes is popular terrain that will make it hard for Republicans to criticize without risking blowback. White House officials separately released polling as part of the budget that they say shows public support for their policies, evidence that they want to set up the 2024 election as a contest of ideas.

In addition to deficit reduction, Biden's 10-year budget largely revolves around the idea of taxing the wealthy to help fund programs for the middle class, older adults and families. It would raise $4.7 trillion from higher taxes, with an additional $800 billion in savings from changes to programs.

The tax increases include a reversal of the 2017 tax cuts made by President Donald Trump on people earning more than $400,000 a year. Biden has floated a new tax that would target billionaires and called for lower prescription drug prices. The tax that companies pay on stock buybacks would rise fourfold and those earning more than $400,000 would pay an additional Medicare tax that would help to keep the program solvent beyond the year 2050.

But there also would be $2.6 trillion worth of new spending, including the restoration of the expanded child tax credit that would give families as much as $3,600 per child, compared with the current level of $2,000. That credit would be "fully refundable," which means households could receive all of that sum even if they don't owe any taxes.