Biden to raise taxes on wealthy, boost military and federal workers in budget

President Joe Biden’s budget blueprint includes a 5.2% increase for federal employees, one of the largest peacetime military budgets in recent memory, and plans to bail out Social Security and Medicare.

It doesn’t include cuts in federal spending, which Republicans have pushed as a strategy to reduce the $31.4 trillion federal deficit.

Instead, Biden will pay for his proposals with a series of new taxes on the wealthy and corporations.

The combination of more spending and taxes will likely make his budget dead on arrival when it reaches Capitol Hill, as Republicans, who control the House, prepare to hammer him as a Democrat on tax and spending.

The GOP has not yet released its own budget proposal, but it is expected to cut foreign aid and cut aid to the poor, including food, health care and housing.

Each side’s plan will serve as the launching pad for negotiations between Chairman Kevin McCarthy and Biden on fiscal 2024 spending, which begin Sept. 1.

It will take the cooperation of both sides to pass a budget to keep the federal government afloat — McCarthy needs to keep his Republicans in line in the House and Senate Majority Leader Chuck Schumer will already be Senate Democrats need.

But the widely differing proposals create a policy clash that will play out against the backdrop of election year politics as Biden prepares for a second term and Republicans try to win back the Senate while retaining the House.

Details about the president’s budget, which he will formally unveil Thursday in Philadelphia, are beginning to trickle in.

• He will propose a 5.2% raise for federal workers — the largest White House raise since Jimmy Carter was president, according to the Washington Post. But it falls short of the 8.7% increase that lawmakers — including many Democrats — want.
• He will push for one of the nation’s largest peacetime defense budgets, per Bloomberg, with $170 billion for arms acquisitions and $145 billion for research and development. That gives the Department of Defense a topline number of $835 billion, up from $816 billion in the last fiscal year.
• Biden has already released his plan to make Medicare solvent through 2050 by increasing taxes for those earning more than $400,000 from 3.8 percent to 5 percent and improving Medicare’s ability to negotiate lower costs for prescription drugs , expand.
• He’ll likely reflect those Social Security tax increases to boost that program.
• The president also claims he can cut federal budget deficits by at least $2 trillion over the next 10 years. New York Times reported, introducing a new household tax worth more than $100 million.

The deficit supply will be another point of contention as the country approaches its debt limit.

Biden has refused to negotiate with Republicans on the issue, demanding a clean raise in the debt ceiling, as has been done for previous presidents.

But House Republicans have refused to raise the debt limit, which determines how much money the federal government can borrow, until Biden agrees to federal spending cuts.

Republicans will focus on the $31.4 trillion debt in a closed session on Capitol Hill on Wednesday — the day before Biden unveils his full budget proposal.

Phillip Swagel, chief of the Congressional Budget Office, will brief lawmakers on the shortfall. He has warned that federal debt will surpass the size of the US economy within a decade if no steps are taken.

The GOP says they want at least $150 billion in cuts for fiscal year 2024, with the ultimate goal of eliminating budget deficits over 10 years.

Adding to the tension is that the federal government is expected to hit its debt ceiling by the summer. Failure to take action by then could lead to a potentially disastrous bankruptcy.

Each side blames the other for a high federal deficit.

Republicans argue that post-pandemic spending under Biden contributed to the national debt, while Democrats say it was the tax cuts for businesses and wealthy individuals that were implemented under former President Donald Trump.

Meanwhile, Republicans are expected to release their budget by April 15.

It will likely include foreign aid cuts and major cuts to health care, food aid and housing programs for the poor amid their push to cut federal spending.

GOP leaders have said they will not push for Medicare or Social Security cuts.

To meet his budget and counter Biden, McCarthy faces the challenge of keeping his two wings of the GOP — the legislators in competitive House districts and the conservative hardliners — together to get the 218 votes he needs .

Biden is expected to object to the cuts for the poor. Many of his post-COVID programs provided the kind of aid Republicans are now looking to cut.