One of the first things you are likely to hear about President Joe Biden’s proposed 2024 budget is how it doesn’t have a snowball’s chance in the Sahara of being approved by the Republican-controlled House. That’s undoubtedly true, if you’re talking about Biden’s proposal in its current form.
But, as political gridlock and fractious politics puts the government at risk of defaulting on its debts and possibly unleashing an economic catastrophe, lawmakers in both parties need to come to an agreement as they somehow have managed to do in settling 10 other debt-limit standoffs in the past 13 years.
Biden on Thursday made what amounts to an opening bid with a budget plan that would cut deficits by $2.9 trillion over the next decade — a proposal that Republicans already have declared dead on arrival.
But Biden isn’t backing down, he says, and, so far, he has little reason to do so. Despite his espoused refusal to negotiate the debt ceiling, which limits the money the federal government may pay on the debt it already borrowed, he came very close to doing so in late January when he responded to a reporter’s question with this eyebrow-raising challenge to House Speaker Kevin McCarthy:
“Show me your budget,” he said, “and I’ll show you mine.”
So far, the Republicans have declined to show theirs, if they have one.
Meanwhile, the debt ceiling was reached and broken through in late January, according to Treasury Secretary Janet Yellen.
The U.S. national debt stands at $31.4 trillion and growing, while the federal government’s annual budget is currently operating at $6.3 trillion, which is almost $2 trillion more than it spent annually before the coronavirus pandemic.
The budget plan that the president unveiled Thursday — in the politically charged atmosphere of a union training center in Philadelphia — offers 182 pages of policy proposals, charts and data, as if he was making an initial offer for negotiations between the parties aimed at reaching a compromise, a word that we have heard too little in Washington in recent years.
Yes, Biden has insisted that raising the debt ceiling is “not a negotiation.” But that would defy nature in a town where almost everything turns out to be negotiable or nothing would get done. More likely, Biden’s goading of the GOP lawmakers appears to be part of his broader attempt to call out House Republicans for demanding severe spending cuts in return for lifting the government’s legal borrowing limit.
Biden’s proposed budget blueprint has been front-loaded with the sort of spending Democrats favor most: big budget items aimed at assisting working class children and families and protecting such popular liberal programs as Social Security, Medicare, Medicaid and the Affordable Care Act, often called Obamacare.
Biden scored points with his supporters by goading Republicans into an impromptu debate during his State of the Union address.
Although Republicans strongly objected, Biden brought attention to the truth: Some leading Republicans were looking for ways to cut costs and spending for Social Security, but by calling attention to it, Biden probably moved such cuts to the popular program off the table for the foreseeable future.
His proposed budget asks for social spending so generous as to be easily knocked down by his Republican critics, yet large enough to deliver a populist message Democrats need to deliver in Donald Trump’s MAGA era: Claim fiscal responsibility but invest in popular policies and programs.
And to pay for it, Biden boldly intends to tax the rich, making up for the tax cuts Republicans in the Trump years voted in for upper-income earners. Paying your “fair share” is central to this Democratic argument and helping those who need help the most — while shifting the cost burden to those who can afford it the most.
The GOP has no counter-offer so far, other than to flatly reject Biden’s proposal for tax increases on the wealthy, a policy that could be central to Biden’s as-yet-undeclared campaign for reelection.
What else is in Biden’s blueprint? Big spending and investments in manufacturing, climate, education, paid leave and health care — playing catch-up in some ways with the GOP’s appeal to economically stricken Americans left behind by socioeconomic changes.
For example, in health care coverage, Biden’s budget proposal would cap insulin prices at $35 per month for people with private insurance plans. Although the Inflation Reduction Act capped monthly insulin costs at that price for seniors in January, it left out everyone who wasn’t on Medicare. Biden called on Congress in his State of the Union speech to finish the job. .
Biden would swing the tax code around to give more breaks to lower income owners and impose more taxes on the rich. One reform, previously discussed by the White House, would quadruple the tax on corporate stock buybacks but leaves those making less than $400,000 untouched.
Not left untouched are people worth more than $100 million. They would be subject to a new 20% minimum tax — and the wealthiest 0.01% of Americans would be hit with a 25% minimum tax on all income, including their appreciated assets.
Among other tax changes, according to the administration, Biden would raise the top income-tax rate to 39.6% from 37% for single filers making more than $400,000 a year and married couples earning more than $450,000 per year.
There’s more, but all of these proposals are subject to change in the negotiation process, when — and if — it gets started.
Unfortunately, as the U.S. creeps ever closer to a devastating debt default, Republicans show little sign of preparations for a great debate.
The GOP should not engage in self-serving recklessness over the debt limit. Rather, it should reveal, and constructively argue for, its own plan. A government budget, it has been rightly said, is a moral document, spelling out not only the government’s obligations to its citizens but also a test of our concerns for each other.
