The Mercury News

Biden aims to cut deficits nearly $3T over 10 years

- By Josh Boak

WASHINGTON >> President Joe Biden's upcoming budget proposal aims to cut deficits by nearly $3 trillion over the next decade, the White House said Wednesday.

That deficit 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.

The White House has consistent­ly 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 roughly $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 today 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 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.

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