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President Biden on Monday released his 2025 budget proposal asking for an eye-popping $7.3 trillion in government spending, but he pledged to reduce the national debt by persuading Congress to soak the rich and corporations with massive tax increases.
He figures the government can collect $5.5 trillion in revenue next year, which would leave a $1.8 trillion deficit.
His plans for hefty tax increases on billionaires and large corporations and lower government spending on prescription drugs would keep deficits around $1.5 trillion a year through the end of the decade. By 2033, though, the government would be spending $10 trillion annually, Mr. Biden projects.
Nearly every Cabinet-level agency would receive a budget increase, some by as much as 7.5%. Only discretionary funding for the Department of Veterans Affairs and the Department of Transportation would drop from this year’s levels.
Mr. Biden, in his budget message to Congress, said he helped the nation emerge from the worst days of the pandemic. He said it’s time for the government to move from crisis containment to active investment.
“We are the only nation that has emerged from every crisis we have entered stronger than we went in,” the president said. “While my Administration has seen great progress since day one, there is still work to do. My Budget will help make that promise real.”
The budget builds on the vision Mr. Biden delivered in his State of the Union address last week. It revives many of the president’s expansive ideas about the government safety net that have been met with skepticism on Capitol Hill.
He asked lawmakers to approve federal funding for universal prekindergarten education, an expansion of anti-poverty tax credits, a new tax break for first-time homebuyers and a Social Security-run program to provide 12 weeks of paid family and medical leave for all workers.
He also proposes $12 billion for a fund to lower the cost of a college education and more than $30 billion that the administration says will lower the cost of housing.
To pay for it all, he says he will make the wealthy “pay their fair share.” That includes raising the marginal corporate income tax rate to 28% and imposing a minimum 25% tax on unrealized income of the wealthiest households.
He would raise the minimum tax on billion-dollar corporations from 15% to 21% and increase taxes on U.S. corporations’ foreign income from 10.5% to 21% while eliminating tax reductions for executive compensation.
SEE ALSO: Biden’s budget drops plans to cut immigrant detention
House Republican leaders, including Speaker Mike Johnson of Louisiana, said Mr. Biden’s budget reflects his “insatiable appetite for reckless spending.”
“While hard-working Americans struggle with crushing inflation and mounting national debt, the President would increase their pain to spend trillions of additional taxpayer dollars to advance his left-wing agenda,” the Republican leaders said in a joint statement.
As a blueprint for government spending, Mr. Biden’s budget is nearly meaningless. It is weeks late and will have little effect on Congress, the branch of government with primary control over spending.
Indeed, the Republican-led House Budget Committee has already written and passed a budget for fiscal year 2025, envisioning significant spending cuts and none of the tax increases Mr. Biden proposes. Republicans call for total spending of $6.5 trillion and $5 trillion in revenue, leaving a deficit of $1.5 trillion for next year.
That is roughly $500 billion less in taxes and $800 billion less in spending than Mr. Biden’s plan.
Republicans say their budget would reduce deficits each year over the next decade, mostly by limiting the growth of Medicare and Medicaid spending, and finally result in an annual surplus in 2034.
Given the party split between the House and Senate, it’s unfathomable that Congress agrees on a full budget. The more likely outcome is the two sides agree on overall spending levels and then leave it to the spending committees to allocate the money.
Shalanda Young, the White House Office of Management and Budget director, told reporters that the Republican plan is too vague to be taken seriously.
“They don’t tell you what they want to cut, who they harm,” she said. “Congressional Republicans gave us a top line that has rosy projections.”
One clash between Mr. Biden and Congress is over IRS funding.
The president agreed over the past year to give up $20 billion for the tax agency that he signed into law in 2022 in Democrats’ budget-climate bill. Mr. Biden’s new budget calls for restoring the money while congressional Republicans are eyeing deeper cuts.
The president’s budget marks a reversal on the border. Mr. Biden is now calling for the Homeland Security Department to average at least 34,000 detention beds for migrants awaiting deportation decisions. His past budgets called for bed capacity to be slashed to 25,000.
Mr. Biden also called for more Border Patrol agents, immigration judges and asylum officers. On the legal immigration side, he said he wants funding to welcome 125,000 refugees next year.
The president’s equity agenda provides funding to states to update criminal laws that hurt those with HIV, more money to advance minorities within science, math and engineering education, and increased funding to combat maternal mortality, particularly among Black and American Indian mothers.
The proposal calls for $8 billion over the next decade to fund one of Mr. Biden’s pet climate projects, the American Climate Corps, which provides training for green jobs. As part of that $8 billion, Mr. Biden wants $125 million to triple its workforce by hiring 50,000 more workers annually by 2031.
He requested $3 billion for a program that helps other countries fight climate change.
Mr. Biden’s budget was silent on plans to shore up Medicare, Medicaid and Social Security, the major entitlement programs responsible for most spending growth over the 10-year budget window.
Social Security, in particular, is slated to exhaust the money in its trust funds in 2033. Under current law, the program could pay out in benefits only what it collects in payroll taxes, which would mean an immediate 23% cut in benefits. The Peter G. Peterson Foundation says that costs about $17,000 for the typical couple.
Fiscal year 2025 begins on Oct. 1.
Congress is nearly halfway through fiscal year 2024 and is still working through its spending bills. Lawmakers just passed a package of six of the annual dozen bills required to keep the government open. The other six bills are expected later this month.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
• Jeff Mordock can be reached at jmordock@washingtontimes.com.
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