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Biden calls for expanded child tax credit, taxes on wealthy in $7.3 trillion budget plan

Credit: Drew Angerer/Getty Images

Jennifer Shutt, Nevada Current
March 11, 2024

WASHINGTON — President Joe Biden released his budget request for the upcoming fiscal year Monday, calling on Congress to stick to the spending agreement brokered last year and to revamp tax laws so that the “wealthy pay their fair share.”

The $7.266 trillion budget request doesn’t actually spend any money since Congress controls the power of the purse. But it contains details about what the president believes the federal government should change and how it should direct taxpayer dollars.

The fiscal 2025 budget request, which totals 188 pages, comes at an especially crucial time for Biden as he increasingly turns his attention toward winning reelection this fall, and follows by days his State of the Union speech. It reflects a budget year that would begin on Oct. 1.

“The story of America is one of progress and resilience, of always moving forward and never giving up. It is a story unique among nations,” Biden wrote in a message released alongside his latest budget request. “We are the only nation that has emerged from every crisis we have entered stronger than we went in.”

“While my Administration has seen great progress since day one, there is still work to do,” Biden added. “My Budget will help make that promise real.”

That total spending level would go toward numerous budget categories, including $900 billion on defense discretionary and $1.029 trillion on domestic discretionary spending.

Mandatory programs, which are mostly funded outside the annual budget and appropriations process in line with the laws that created them, would take up the rest of the government spending, with Social Security accounting for $1.543 trillion, Medicare spending $936 billion and Medicaid requiring $589 billion.

Another $965 billion in government spending would go toward interest payments on the country’s debt.

The budget request proposes a $1.781 trillion deficit during  fiscal 2025, which would decrease during the following four fiscal years before increasing again toward the end of the 10-year budget window.

The deficit would never drop below the $1 trillion mark.

Child tax credit, Medicare, Social Security

The budget calls on Congress to expand the child tax credit to the levels that were in place during the COVID-19 pandemic, “which helped cut child poverty nearly in half in 2021 to its lowest level in history,” the proposal says.

“The Budget would expand the credit from $2,000 per child to $3,000 per child for children six years old and above, and to $3,600 per child for children under six,” the request says.

The budget calls on U.S. lawmakers to bolster Medicare by “modestly increasing the Medicare tax rate on incomes above $400,000” and by “closing loopholes in existing Medicare taxes.”

The budget request says Biden “remains committed to working with the Congress to protect Medicare and Social Security for this and future generations,” but it doesn’t include any concrete proposals for avoiding a nearly 25% drop off in Social Security benefits in a decade when the trust fund becomes insolvent.

Ukraine, Israel funding

Office of Management and Budget Director Shalanda Young said on a call with reporters Monday morning the budget request calls on Congress to approve emergency spending for war efforts led by Ukraine and Israel.

“It is very frustrating,” Young said of the stalemate from House GOP leaders. “We have been asking for support for Ukraine since September. If you can remember, after October 7, we asked for support for Israel.”

The Senate voted 70-29 in February to send the House a $95 billion assistance package for Ukraine, Israel and Taiwan, though House Speaker Mike Johnson, a Louisiana Republican, has so far refused to put the bill on the floor in that chamber for an up or down vote.

Biden also asked Congress, for the fourth time, to bolster spending on U.S. border security, she said.

Young is scheduled to testify before the Democratic-controlled Senate Budget Committee on Tuesday about the budget request.

She will testify in front of the House Budget Committee, which is controlled by Republicans on March 21, according to committee staff.

Those two hearings kick off the annual budget and appropriations process on Capitol Hill, though House GOP leaders upended the order of things last week when they debated and approved their budget resolution in committee.

Contrasts in Biden, GOP budget proposals

Chair of the Council of Economic Advisers Jared Bernstein said during the call with reporters Monday the difference between House GOP’s budget resolution and the White House budget request is “reality.”

“We think we have a realistic growth forecast. We defended it extensively in the budget. We explain how we got to where we are,” Bernstein said, calling into question House Republicans optimistic prediction of 3% economic growth in order to balance their budget resolution.

“So you can write down whatever you want to get whatever result you want, but if it doesn’t match good, hard economic reality, it’s not useful,” Bernstein said.

Young doubled down on criticism of House Republicans’ budget resolution, saying it doesn’t “tell you what they cut, who they harm.”

“Everything is detailed in the discretionary budget, mandatory proposals, tax proposals,” Young said of the president’s budget request.

“Congressional Republicans give us their top lines, which have rosy economic projections that don’t fit reality,” Young said. “They also don’t tell you they’re going to cut the National Institutes of Health. They’re going to cut border security. They’re going to cut child care. They’re going to cut Head Start. That’s the only way you can do it.”

Last year’s work still undone

Congress’ budget resolution is a tax and spending blueprint that lays out the party’s vision for the 10-year budget window, but it doesn’t actually spend any money. That is reserved for the dozen annual government spending bills.

The House and Senate took overwhelmingly bipartisan votes last week to approve six of those bills for the fiscal year that began back on Oct. 1. But they have yet to release or approve the other half of their work, which is due before March 22, under the latest stopgap spending law.

Biden’s budget request for fiscal year 2025 should allow the House and Senate spending panels to move directly into next year’s process, drafting the 12 appropriations bills all over again sometime this spring.

But Congress will need to complete work on last year’s process, which is running more than five months behind schedule, before it can do that.

Republican reaction

Johnson, House Majority Leader Steve Scalise of Louisiana, Majority Whip Tom Emmer of Minnesota and Republican Conference Chair Elise Stefanik of New York said in a joint statement released Monday that Biden’s budget request “doesn’t just miss the mark — it is a roadmap to accelerate America’s decline.”

“House Republicans reject Biden’s misguided budget proposal and have taken action to steer our nation back to a path of fiscal sanity,” Johnson said. “Our efforts to rein in the runaway spending spree from last year’s budget have already yielded results, lowering projected deficits by $2.6 trillion over the next decade.”

“The House’s budget plan for the next fiscal year, preceding the President’s proposal, reflects the values of hardworking Americans who know that in tough economic times, fiscal discipline is non-negotiable,” Johnson added. “House Republicans understand the American people expect and deserve nothing less from their government.”

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This article is republished from Nevada Current under a Creative Commons license. Read the original article.