Biden releases details of his proposed budget
WASHINGTON — With Republicans in control of the House, there’s no chance that President Joe Biden’s new budget plan will become law as it stands. Instead, the financial blueprint that he announced Thursday in Philadelphia will serve as a political talking point for a president preparing to run for re-election.
“I just laid out the bulk of my budget,” Biden said during a stop at a union training center. “Republicans in Congress should do the same thing. Then we can sit down and see where we disagree.”
Many of the key proposals are designed to draw sharp contrasts with Republicans.
TAXING BILLIONAIRES
Biden frequently talks about making companies and the wealthy “pay their fair share,” and the budget is designed to further that goal.
The president wants a 25% tax on the richest 0.01% of Americans. The White House calls this a “minimum tax on billionaires.” The idea is designed to extract more revenue from income that isn’t derived from salaries, ending what the administration describes as “special treatment” and “giant loopholes.”
Biden also wants to roll back tax breaks enacted under his predecessor, former President Donald Trump. For example, people making more than $400,000 a year would once again face a top tax rate of 39.6%.
MEDICARE FUNDING BOOST
A key trust fund that funds Medicare, which provides health care to older adults, is on track to become insolvent in about five years, meaning it would be unable to fully cover the cost of benefits. The White House says Biden’s plan would push that date back to the 2050s.
Some of the money would come from expanding the federal government’s ability to negotiate the cost of prescription drugs, something that began with the Inflation Reduction Act that Biden signed last year. He also wants to increase the Medicare tax rate from 3.8% to 5% on income exceeding $400,000 per year, including salaries and capital gains.
FULLY REFUNDABLE CHILD TAX CREDIT
Congress expanded the child tax credit during the pandemic to help families cope with the economic fallout, but the extra money expired last year.
Now Biden wants to restore the credit to its previous level. The change would provide families up to $3,600 per child, up from $2,000. The credit would be “fully refundable,” which means households could receive all of the money even if they don’t owe any taxes.
EYES ON CHINA
Some of the budget is designed to help Biden’s effort to steer U.S. foreign policy to confront China’s rising influence.
The Pentagon would receive $842 billion, which includes money to modernize the U.S. nuclear arsenal. There’s also a proposed 5.2% proposed pay increase for troops, designed to help the military boost its lagging recruitment.
In addition, the budget would allocate $7.1 billion to renew agreements with three Pacific Island nations that the Chinese have been wooing. The amount includes $6.5 billion over 20 years to the Marshall Islands, Micronesia and Palau.