Key Takeaways from Biden’s 2024 Budget Proposal
What you need to know about the President’s latest budget proposal.
On March 9, 2023, President Biden released his federal budget proposal for the upcoming fiscal year. The 182-page document lays out $6.8 trillion in spending and acts as the first step in his administration’s negotiations with Congress.
Don’t have time to read it all? We’ve got you covered. Here are three things you should know:
1.) The deficit
- The release of the President’s proposed budget comes in the context of a debt ceiling debate that continues to rage in Congress, so it’s no surprise the White House has made the budget deficit a sticking point of the budget proposal (for a full breakdown of the debt ceiling see my last blog post).
- Controversy over the debt limit has to do with concerns over the amount the federal government borrows to pay its debts, and the President’s latest proposal results in $19 trillion in borrowing over the next decade which has raised red flags among experts on the national debt (source).
- On the flip side, the proposal does include provisions to pay for all new spending and begin deficit reduction immediately for a total of $3 trillion over the next decade. However, it’s important to note that most experts think this proposal does not go far enough in addressing the national debt (source).
2.) New spending on social programs
- Perhaps fueled by an approaching 2024 presidential campaign, this year’s budget proposal saw the resurgence of programs Biden campaigned on in 2020 some of which were cut out after the Build Back Better package failed to garner enough support in Congress (source).
- These measures include but are not limited to increasing the availability of affordable housing, reducing the costs of utilities and rent, reinstating the child tax credit, subsidizing pre-K and childcare, and expanding access to paid family and medical leave.
- Over the next ten years, the President’s budget leads to over $2.8 trillion in new spending, largely driven by the programs mentioned above (source).
3.) Taxes for the rich
- President Biden has consistently pledged a commitment to not raising taxes on anyone making less than $400,000 a year. To pay for this proposed new spending, the White House put forward tax hikes for the wealthiest Americans and large corporations. In addition, the budget also includes a historic increase in funding for the Department of Justice’s Antitrust Division, underscoring the administration’s efforts to prevent corporate concentration and non-competitive markets.
- Some of the key tax provisions proposed in the president’s budget include a “billionaire tax” which places a minimum 25% tax on the nation’s top 0.01%, raising the tax on stock buybacks from 1% to 4%, increasing the tax rate corporations pay in taxes on their profits to 28%, cutting tax breaks for oil and gas companies and for real estate investors, and reversing elements of former President Trump’s 2017 tax cuts so that people making more than $400,000 per year pay a tax rate of 39.6% (source).
In recent years, presidential budget proposals have rarely passed Congress, and House Republicans have indicated President Biden’s 2024 proposal is “dead on arrival.” Instead, the proposed budget is largely seen as a messaging tactic from the White House as the 2024 election looms, highlighting the president’s priorities for the upcoming year.