President Biden on Monday will propose a budget packed with tax increases on corporations and high earners, new spending on social programs, and a wide range of efforts to combat high consumer costs like housing and college tuition.
The new spending and tax increases included in the fiscal 2025 budget stand almost no chance of becoming law this year, given that Republicans control the House and roundly oppose Mr. Biden’s fiscal agenda. Last week, House Republicans passed a budget proposal outlining their priorities, which are far afield from what Democrats have called for.
Instead, the document will serve as a draft of Mr. Biden’s policy platform as he seeks re-election in November, along with a series of contrasts intended to draw a distinction with his presumptive Republican opponent, former President Donald J. Trump.
Mr. Biden has sought to reclaim strength on economic issues with voters who have given him low marks amid rapid inflation. This budget aims to portray him as a champion of increased government aid for workers, parents, manufacturers, retirees and students, as well as the fight against climate change. Mr. Biden’s budget proposes to more than offset the cost of those priorities through increased taxes on large companies and the wealthy. The president has already begun trying to portray Mr. Trump as the opposite: a supporter of further tax cuts for corporations.
“A fair tax code is how we invest in things that make this country great: health care, education, defense and so much more,” Mr. Biden said on Thursday during his State of the Union address.
Later in the speech, in a call-and-response with Democrats in the chamber, Mr. Biden added: “Folks at home, does anybody really think the tax code is fair? Do you really think the wealthy and big corporations need another $2 trillion tax break? I sure don’t. I’m going to keep fighting like hell to make it fair.”
Polls show Americans are dissatisfied with Mr. Biden’s handling of the economy and favor Mr. Trump’s approach to economic issues. But Mr. Biden has been unwavering in his core economic-policy strategy, and the budget is not expected to deviate from that plan.
White House officials, previewing the budget release, said that Mr. Biden would propose about $3 trillion in new measures to reduce the budget deficit over the next decade. That is in line with his budget proposal last year, which narrowed deficits by raising taxes on businesses and the rich and by allowing the government to bargain more aggressively with pharmaceutical companies in order to reduce spending on prescription drugs.
Mr. Biden is once again set to call for raising the corporate tax rate to 28 percent from 21 percent, the level Mr. Trump set in the tax bill he signed in late 2017. Mr. Biden will also propose increasing a new minimum tax on large corporations and quadrupling a tax on stock buybacks, among other efforts to raise more revenue from companies and individuals who make more than $400,000 a year.
Those savings would build on discretionary spending limits that Mr. Biden and congressional Republicans agreed on last year to resolve a standoff over raising the nation’s borrowing limit. But even if Congress agreed to all $3 trillion of Mr. Biden’s proposals, the deficit would still average about $1.7 trillion a year over the next decade, based on projections from the nonpartisan Congressional Budget Office.
House Republicans released a budget last week that seeks to reduce deficits much faster — balancing the budget by the end of the decade. Their savings relied on economic growth forecasts that are well above mainstream forecasters’ expectations, along with steep and often unspecified spending cuts.
The nonpartisan Committee for a Responsible Federal Budget called the Republican plan “unrealistic in its assumptions and outcomes.” Last year, the same group said Mr. Biden’s budget fell “well short of the deficit reduction needed to put the nation on a sustainable fiscal path.”
Mr. Biden and his aides have repeatedly said they are comfortable that the projected deficits in his budgets will not hurt the economy. Instead of pivoting to more aggressive deficit reduction, as previous Democratic presidents have done after losing control of a chamber of Congress, Mr. Biden has leaned into the need for new spending programs and targeted tax incentives.
White House officials said the new budget proposal would continue that trend. It will include a national program of paid leave for workers. It will reinstate an expanded child tax credit that Mr. Biden created temporarily in his $1.9 trillion economic stimulus law in 2021, and that helped reduce child poverty significantly over the span of a year before expiring.
It will also include new efforts to help Americans struggle with high costs. That issue has dogged Mr. Biden with voters since inflation soared on his watch to its highest levels in four decades, even as price increases have cooled over the last year. Mr. Biden previewed many of those efforts in his State of the Union speech, including new tax credits for certain home buyers and expanded assistance for people to buy health insurance through the Affordable Care Act.
Mr. Biden is also set to call for new efforts to improve the solvency of Social Security and Medicare, though not the full Social Security overhaul that he previewed in the 2020 campaign but has not delivered on in office. He will oppose benefit cuts for the programs, officials said, suggesting that he favors a familiar strategy to bolster them: raising taxes on high earners.
Source Agencies
