As he formally rolls out his proposed budget at an event Thursday in Pennsylvania, President Joe Biden looks set to call for increasing certain taxes and taking steps to bolster Medicare, along with other measures.
Many of his proposals aren’t expected to find much traction in the Republican-run House of Representatives, but they could help provide the Democratic incumbent with talking points in a 2024 re-election campaign. Biden appears poised to announce in the coming weeks that he’ll run for president again.
The White House already has released some parts of his proposed budget, including a call for raising the Medicare tax rate for people making more than $400,000 a year.
Other tax hikes that Biden could talk up include a billionaire minimum tax, a quadrupling of the levy on stock buybacks and higher taxes on corporations — all measures that he’s previously argued for.
Related: Biden’s budget proposes cutting the deficit by almost $3 trillion over 10 years
Biden said during a speech last week in Virginia Beach, Va., that he’s “going to raise some taxes” as he introduces his proposed budget, and he mentioned that billionaires would be targeted. He referred to the very wealthy again Monday while speaking at an International Association of Fire Fighters conference in Washington, D.C.
“No billionaire should be paying a lower tax rate than a firefighter,” Biden said.
The GOP-controlled House is likely to kill Biden’s proposed tax hikes, and Democrats are “nervous that they are on the wrong side of the crime debate and now will be left to defend Biden’s tax hikes,” said Greg Valliere, chief U.S. policy strategist at AGF Investments, in a note on Monday.
So Democrats “will push hard for the Republicans to unveil their budget plan,” Valliere wrote, but it could be late spring before the GOP releases its proposals.
In his Virginia Beach speech, Biden also said his proposed budget would “lower health costs and protect and strengthen Social Security and Medicare, while cutting the deficit more than $2 trillion over the next 10 years.”
Regarding Medicare, a White House economic adviser, Bharat Ramamurti, noted last week that the budget would aim to “extend the solvency of Medicare by two decades” by “closing the loophole that allows wealthier people with a lot of investment income not to contribute to Medicare out of that income.”
Additional details came out Tuesday, as the White House said Biden’s budget proposes extending the program’s solvency by at least 25 years in part by raising the Medicare tax rate on earned and investment income above $400,000 to 5% from 3.8%.
“When Medicare was passed, the wealthiest 1 percent of Americans didn’t have more than five times the wealth of the bottom 50 percent combined, and it only makes sense that some adjustments be made to reflect that reality today,” Biden said in a New York Times op-ed on Tuesday.
The administration also said Tuesday that it wants to build on the Inflation Reduction Act’s move to allow Medicare to negotiate prices for some drugs, so the budget calls for letting the program negotiate prices for more drugs and bringing drugs into negotiation sooner after they launch.
The White House said Biden will travel on Thursday to the swing state of Pennsylvania to release his proposed budget for the 2024 fiscal year and will give a speech in Philadelphia about “his plans to invest in America, continue to lower costs for families, protect and strengthen Social Security and Medicare, reduce the deficit, and more.”
One watchdog group, the Committee for a Responsible Federal Budget, has said previously that some administration comments on deficit reduction are highly misleading, because deficits are falling mainly because COVID-19 relief is ending.
Biden and congressional committees should “do their jobs to produce budgets and lay out responsible fiscal plans for the country,” CRFB President Maya MacGuineas said in a statement on Monday.
“Passing a budget is of particular importance amidst the tension around the debt ceiling, providing an opportunity to address high inflation and debt through the regular process. Part of the reason we are in such fiscal disarray is the breakdown of the budget process and the failure of the Budget Committees to even attempt to do their jobs,” she also said.
“Inflation is the highest it’s been in over 40 years, the national debt is projected to reach a record share of the economy in just five years, and the deficit is projected to average $2 trillion per year over the next decade,” her statement continued. “Meanwhile, our major trust funds are on course to be insolvent in the next decade or so. And interest costs are slated to triple over the next decade to a new record as a share of the economy — exceeding the size of the defense budget by 2028 and growing to become the single-largest line item in the federal budget by 2050.”
For the defense
budget, Biden could propose an increase of up to 4% from last year’s Pentagon request. That wouldn’t include ongoing support for Ukraine as that country battles Russia, according to a Wall Street Journal report citing a consensus among analysts.
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