WASHINGTON – After weeks of buildup, President Joe Biden will layout a budget blueprint on Thursday that’s the opening salvo for what’s expected to be months of contentious debate with congressional Republicans over the nation’s pocketbook .
Biden is expected to propose new taxes and spending while also offering ways to reduce the deficit by nearly $3 trillion over the next 10 years.
While heads of federal agencies hold the traditional news conferences to discuss their parts of the budget, Biden is making a more campaign-like visit to Philadelphia to promote his plan.
As the president prepares for an expected re-election campaign, he’s been trying to draw a contrast with the GOP. Congressional Republicans are pushing to eliminate the deficit as a condition for avoiding a default on the nation’s existing debts. But they haven’t yet put forward their own budget plan.
“Show the American people what you value,” Biden tweeted Wednesday.
House Speaker Kevin McCarthy, R-Calif., said he and Biden can find common ground, but, “It won’t be new taxes.”
No release date for GOP budget
McCarthy said Wednesday Republicans will release their budget “as soon as we can get it done.”
“We want to analyze (the president’s) budget…and then we’ll get to work on our budget,” he told reporters.
Potential spending cuts the House Budget Committee floated last month include work requirements for food stamps, deep slashes to the Environmental Protection Agency, stopping “woke waste,” rescinding unspent COVID-19 rescue funds, reducing Obamacare subsidies and halting Biden’s plan to forgive student loan debt.
Their framework said Republicans want to “save and strengthen” Social and Medicare but didn’t say how.
Biden to lay out budget in Philadelphia
Underscoring the role Democrats think their fiscal fight with Republicans will play in the next election, Biden is traveling to a union hall in Philadelphia to discuss his budget.
“It’s an opportunity for the president to talk directly to the American people,” said White House press secretary Karine Jean-Pierre.
Biden has repeatedly turned to Philadelphia, a city in a critical battleground state, for major political moments including the rollout of his 2020 presidential campaign and a primetime speech on the fate of democracy.
Biden to propose reducing deficit by nearly $3 trillion
After promising a path to reduce the deficit by at least $2 trillion over the next decade, the White House said Wednesday it found a way to reduce the gap in revenues and spending by nearly $3 trillion.
Deficits would have to be reduced by $5 trillion over ten years to “nearly stabilize” the growth of the federal debt, according to the nonpartisan Congressional Budget Office. Without changes, the debt will become larger than the size of the economy, reaching record levels by 2033.
Biden’s budget will include tax increases
In his State of the Union address, Biden previewed two of the tax increases expected to be in his budget blueprint: Quadrupling the new tax on corporate stock buybacks and setting a minimum income tax on multimillionaires and billionaires.
Biden also wants to raise taxes on private-equity managers’ carried-interest income and limit the tax benefits of retirement accounts for people earning more than $400,000. He would also raise taxes on earned and unearned income from higher-income earners to extend the solvency of Medicare.
He’s said he will keep his promise not to raise taxes on middle-class Americans.
Biden going after drug companies, oil industry
In addition to new taxes on the wealthy, Biden is also going after “Big Pharma” and “Big Oil” to find new revenues.
As he’s proposed before, Biden wants to eliminate tax incentives for the oil and gas industry, a change the White House says would save $31 billion.
Biden also wants to expand the government’s ability to pay less for prescription drugs for Medicare and Medicaid patients. More limited provisions to do that included in legislation passed last year were fiercely opposed by the pharmaceutical industry. Drug makes argued the changes will hurt their ability to develop new medicines.
Biden’s budget to address Social Security and Medicare
The White House has said protecting Social Security and Medicare is a top focus of the budget blueprint. The higher Medicare taxes and prescription drug changes Biden is proposing would extend the solvency of Medicare’s hospital-insurance fund for at least two decades, according to the White House.
Biden didn’t say before Thursday how he would boost the finances of Social Security, which may not be able to pay full benefits by 2032.
Budget part of fight over debt limit
While presidents annually submit a budget request to Congress for the next fiscal year, this year’s proposal comes as Biden and Republicans are locking horns over the government’s ability to pay its existing bills. Unless Congress raises the nation’s borrowing limit, the government could default on its debts this summer, causing economic calamity.
House Republicans say they won’t raise the debt ceiling unless Biden agrees to sharply cut spending. Biden maintains the issues should not be linked to avoid spooking the economy during what could be a protected funding fight.