At this point in US politics, it is almost guaranteed that every budget submitted by a president will involve more spending and federal deficits, completely disregarding future generations. This week, the American people will be presented with the Biden budget, a plan that proffers more of what the public has been accustomed to for years: a higher tax bill, inflationary outlays, debt and deficits, and growth in the size and scope of the federal government. Indeed, the US motto has transitioned from “truth, justice, and the American way” to “taxes, debt, and the big government way” these days.
A Preview of the Biden Budget
According to the White House, President Joe Biden will lay out the highlights of his fiscal year 2024 budget at an event in Philadelphia, PA, on Mar. 9. So far, administration officials have been vague about what is included inside the Biden budget, only alluding to “lower costs for families” and efforts to “protect and strengthen Social Security and Medicare.”
The president informed a Virginia audience last week that he wanted “to make it clear I’m going to raise some taxes.” He assured everyone that “no one making less than $400,000 is going to pay a penny more in taxes.” However, this has been proven false, either through the downstream effects emanating from the Inflation Reduction Act or the direct tax hikes exposed by the Senate Joint Committee on Taxation (JCT).
Once again, the president could dust off some of his previous proposals, but doing so might trigger another fight in the upper chamber involving two key names: Sen. Kyrsten Sinema (I-AZ) and Sen. Joe Manchin (D-WV). In addition, other Democratic senators in swing states might express some consternation if the Biden budget contains a series of revenue-raising proposals, further weighing on cash-strapped households.
Sen. Jon Tester (D-MT) conceded that he would be willing to entertain “tax equity,” but would be adamantly opposed to across-the-board tax hikes. “I don’t know what he’s going to raise taxes on, that’s critical,” he told The Hill. “If it’s about tax equity we’ll take a look at it. If it’s about across-the-board tax increases for everybody it’s probably the wrong time to do it because of inflation.”
Senate Democrats may also shift to an offensive playbook, slamming their Republican colleagues for endorsing reforms that they say would slash Social Security and Medicare benefits. At the same time, Democratic senators will also champion cutting the budget deficit, but reports suggest that they might not possess the same appetite this year, even with a looming debt limit battle. Press Secretary Karine Jean-Pierre suggested that Biden will tout cutting the national debt by $2 trillion over the next decade.
Former President Donald Trump’s Tax Cut and Jobs Act, poised to expire by the end of 2025, has come into focus. So far, however, Senate Democrats have refrained from advocating for raising these tax rates for two reasons: surging revenues and the upcoming election cycle. Still, the president insists that he wants to pay for all of his spending schemes “by making the wealthy and big corporations begin to pay their fair share.” But it should be noted that the top 1% of income earners already pay more than 42% of the nation’s taxes, and the top 5% paid 68% of the taxes.
What About the Republican Plan?
It is unclear when House Republicans will release their official budget alternative. The Republican Study Committee (RSC) may publish a plan in April. Until the Budget Committee posts a concrete document, Republicans are expressing dismay over the revealed components from the administration. Some GOP members have called for capping overall discretionary spending at FY 2022 levels.
Any blueprint would likely fail to sink Uncle Sam’s false teeth into the country’s out-of-control fiscal situation, with Rep. Ben Cline (R-VA) summarizing it best in an interview with The Hill:
“It absolutely has gotten more difficult to balance the budget given the ridiculous levels of spending we’ve seen over the last couple of years. Just the interest on the debt is crowding out discretionary spending and forcing us to make really tough choices to keep that balance under 10 years.”
Whoever Wins, Americans Lose?
The Biden budget will include plenty of goodies that appeal to progressives. Although the administration claims that the FY 2024 proposal will aim to reduce the national debt by $2 trillion over the next decade, this is peanuts to the financial largesse that Washington has manufactured. Consider this: The Congressional Budget Office (CBO) estimates that this year’s federal deficit will be $1.4 trillion, up $400 billion from its previous forecast. If Jean-Pierre is accurate, the $2 trillion decrease will represent a little more than a year’s shortfall. Republican and Democratic presidents can keep raising or cutting tax rates by a couple of percentage points and propose to rein in debt over ten years by small amounts, but some might think these are laughable schemes when compared to the broader pecuniary issue. The US government does not have a revenue problem. It has a spending addiction.
