Biden calls for new social programs, higher taxes on corporations, wealthy
President Biden on Monday called for major new spending initiatives to lower costs for health care, child care and housing and enough new taxes on the wealthy and major corporations to pay for those proposals and also shave $3 trillion off the national debt over the next decade.
Biden’s reelection year budget lays out the broad policy planks that many leading liberals have pushed him to embrace as he campaigns for another four years in the White House. With Republicans in control of the House, the proposals stand almost no chance of becoming law, but they set the stage for a likely rematch with former president Donald Trump this fall.
In a $7.3 trillion budget for fiscal year 2025, Biden would have Congress offer universal prekindergarten education, provide 12 weeks of paid family and medical leave, expand anti-poverty tax credits and create a new tax break for firsttime home buyers.
The vast majority of the budget would cover mandatory programs, such as Medicare, Medicaid, Social Security and veterans’ benefits, which are not subject to annual spending legislation.
That spending would be more than offset by dramatically increasing taxes on the wealthiest individuals and corporations, the White House said.
Biden’s budget would increase the minimum tax on billion-dollar corporations to 21 percent from 15 percent. It would raise taxes on U.S. multinationals’ foreign income to 21 percent from 10.5 percent, and eliminate some tax deductions for executive compensation.
It would also restore $20 billion in new funding to the Internal Revenue Service — money congressional Republicans clawed back in recent spending fights — to train additional scrutiny on those same individuals and businesses. “It’s clear the president’s economic strategy of building the economy from the middle out and bottom up is working,” Shalanda Young, director of the White House’s Office of Management and Budget, told reporters Monday.
The budget follows up the president’s State of the Union address, which fired up Democrats and ignited the Biden campaign’s largest fundraising hauls, in the strongest signal yet of Biden’s ambitions should he win another four years in the White House.
In the speech, Biden spoke of “building a future of American possibilities” in what some in Congress called the most sweeping social agenda since President Lyndon B. Johnson’s “Great Society.”
“Imagine what that could do for America,” Biden said in the address. “Imagine a future with affordable child care. Millions of families can get — they need to go to work to help grow the economy. Imagine a future with paid leave because no one should have to choose between working and taking care of a sick family member. Imagine a future of home care and elder care and peoples living with disabilities so they can stay in their homes and family caregivers can finally get the pay they deserve.”
Republicans in Washington have already shot down some of Biden’s proposals. Rep. Jason T. Smith (R-Mo.), chair of the powerful House Ways and Means Committee, called Biden’s home buyers’ tax credit a “mortgage worsening tax credit.”
“The president’s proposal is an admission that mortgage rates are too high,” Smith said Sunday in a statement. “… Unfortunately, this misguided response to the interest rate crisis the President created will do nothing to lower the cost of mortgages, will actually drive up the cost further of trying to own home, and may result in triggering another financial crisis.”
Biden’s administration has been dogged by persistent inflation, though that’s begun to cool in recent months. Prices rose 3.1 percent in January compared with the year before, a slower increase than 2023 s 3.4 percent annual rate — and far below the post-covid and 40year peak of 9.1 percent — but still higher than analysts expected.
Conservatives argue that more government spending, and more social programs, will drive up inflation even more by injecting money into the economy.
Biden’s top economic advisers rejected that claim Wednesday, saying instead that investments in affordable child care and eldercare would give more individuals opportunity to join the workforce. That would drive up wages and give consumers more buying, relieving inflation.
“We’re very confident that if more caregivers could afford to pay for child care … that would increase labor force,” Jared Bernstein, chair of Biden’s Council of Economic Advisers, told reporters. “Higher labor force is very much a pro-growth development. It’s also helpful in dampening inflationary pressures.”
Congress has yet to finish passing spending laws to deal with the current fiscal year, which began Oct. 1, 2023, and runs until Sept. 30. Biden’s budget would cover the next year, starting Oct. 1.