Biden aims to cut deficits nearly $3T over 10 years
President Joe Biden’s upcoming budget proposal aims to cut deficits by nearly $ 3 trillion over the next decade, the White House saidwednesday.
That def icit reduction goal is significantly higher than the $2 trillion that Biden had promised in his State of the Union address last month. It also is a sharp contrast with House Republicans, who have called for a path to a balanced budget but have yet to offer a blueprint.
Thewhite House consistently has called into question Republicans’ commitment to what it considers a sustainable federal budget.
Administration officials have noted that the various tax plans and other policies previously backed by GOP lawmakers would add approximately $3 trillion to the national debt over 10 years.
“This is something we think is important,” White House press secretary Karine Jean-pierre said about the plan Biden intends to discuss Thursday in Philadelphia.
“This is something that shows the American people that we take this seriously.”
As part of the budget, the president already has said he wants to increase the Medicare payroll tax on people making more than $ 400,000 per year and impose a tax on the holdings of billionaires and others with extreme degrees of wealth.
The proposal would seek to close the “carried interest” loophole that allows wealthy hedge fund managers and others to pay their taxes at a lower rate, and to prevent billionaires from being able to set aside large amounts of their holdings in tax-favored retirement accounts, according to an administration official. The plan also projects saving $24 billion over 10 years by removing a tax subsidy for crypto currency transactions.
The official who provided the details spoke on condition of anonymity to preview the plan before its official release.
It also includes:
• Expanding the ability of Medicare to negotiate on pharmaceutical drug prices, with an estimated spending cut of $160 billion over a decade.
• Auctioning off rights to the radio spectrum, which would generate $50 billion.
• Steps to reduce identity theft and unemployment insurance fraud.
• Targeting insurance companies that overcharge Medicaid, with anticipated savings of $20 billion through repayments to the government.
• Ending subsidies valued at $ 31 billion for oil and gas companies.
• Scrapping a $19 billion tax break for real estate investors.
It’s a delicate time with the U. S. economy on edge because of high inflation. The government this summer is likely to exhaust its emergency measures to keepwashington running, setting up the risk of a default on payments along with a cataclysmic series of job losses that could crash the economy.
Biden’s package of spending priorities is unlikely to pass the House or Senate as proposed. Senate Minority LeadermitchmcConnell, R-KY., said Tuesday that the plan “will not see the light of day,” a sign that it might primarily serve as a messaging document going into the 2024 elections.
Rohit Kumar, a former Mcconnell aide who is now an executive with the tax consultancy PWC, said Biden’s plan does matter “in terms of putting ideas out there.”
He said that if Biden won a second term, elements of this spending blueprint could be part of negotiations in 2025 about the expiring provisions in the 2017 tax cuts that President Donald Trump signed into law.