President Joe Biden will announce a $6 trillion budget proposal for fiscal year 2022 on Friday, an increase driven by spending envisioned for his infrastructure and families plans, according to news reports.
The New York Times, The Washington Post and CNN reported Thursday that Biden’s first formal budget proposal to Congress shows deficits of more than $1 trillion over the next decade. The Times said the sustained levels of spending in the plan would be the highest since World War II.
The federal budget deficit would hit $1.8 trillion in 2022 under Biden’s proposed budget. The deficits would drop slightly in the following years before rising again to nearly $1.6 trillion by 2031.
No new major initiatives are reflected in the budget numbers. The spending represents the original $2.25 trillion Biden’s infrastructure-focused American Jobs Plan, the $1.8 trillion American Families Plan and $1.5 trillion in discretionary spending.
The proposed cost of the jobs plan is reduced by $600 billion under a new White House proposal for a bipartisan compromise. Republican lawmakers have proposed spending even less — $928 billion — under their infrastructure counter-proposal presented Thursday.
Biden has proposed raising taxes on corporations and earners making more than $400,000 a year to help pay for his spending plans. His budget request shows that the jobs and families plan would be paid for by tax increases during a 15-year period and that deficits would begin to shrink in the 2030s with the new tax revenue.
Biden has proposed raising the corporate tax rate from 21%, established by the GOP tax overhaul in 2017, to 28% to help pay for the infrastructure package — a rate still lower than what it was between World War II and 2017.
The tax hike would fund the jobs plan within 15 years and would combine with plans to discourage firms from listing tax havens as their address and offshoring profits.
GOP lawmakers have said they oppose all of Biden’s tax hike proposals.
In his budget, Biden is expected to call on Congress to create a public option and give Americans over 60 the option to enroll in Medicare, according to a document obtained by the Post. The specific policies related to this proposal are not part of the budget.
The budget “won’t propose other new initiatives but will put together the full picture of how these proposals would advance economic growth and shared prosperity while also putting our country on a sound fiscal course,” Rob Friedlander, spokesman for the White House budget office, said last week, according to the Post.
The federal government’s annual budgets are determined by Congress. The president traditionally recommends budget amounts but Congress is not bound to follow the requests.
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