mollyfamwatVice President Joe Biden took to the Senate floor to unveil the Democrats’ new $6 trillion spending plan to rebuild America. The plan would increase federal spending by $3.5 trillion over the next ten years. Half of the money would be spent on infrastructure, and the other half would go to health care, education, veterans’ care, health research, and other programs.
Biden’s budget proposal, which he calls the “Budget for a Better America,” would spend $6 trillion over the next decade. It would increase military spending, while cutting taxes for the highest earners. He also would add $1 trillion to the national debt.
WASHINGTON – President Biden’s $6 trillion budget proposal unveiled Friday reflects his vision of a greater role for the federal government in the economy and in the lives of Americans, with large increases in spending on infrastructure, health care and education, as well as higher taxes on corporations and the wealthy.
The Biden administration wants $1.52 trillion for military and domestic programs for fiscal year 2022, which begins Jan. 1. The month of October is beginning. This is an 8.6% increase over the $1.4 trillion approved last year, excluding the Covid 19 contingency.
The proposal calls for shifting more federal money from military spending, which would rise 1.6 percent next year, to domestic programs such as research and renewable energy, which are expected to see a 16.5 percent increase in funding by 2022, according to the president’s plans.
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The White House also outlined its proposals to spend $4.5 trillion over the next decade on infrastructure and social programs, which the administration hopes to pass through Congress this summer. The plan calls for $17 billion in infrastructure improvements over the next year, including repairs to roads, bridges and airports, $4.5 billion to replace lead water pipes across the country and $13 billion to expand broadband.
Plans to provide universal preschool and ensure that teachers in these schools earn $15 an hour would cost $3.5 billion by 2022. The budget also provides $8.8 billion for direct spending on families next year, including $6.7 billion for affordable child care and $750 million for paid leave, which will increase significantly in 2023 and beyond.
Overall, this budget represents an agenda for sustainable economic growth and shared prosperity, Shalanda Young, acting director of the Office of Management and Budget, told reporters Friday. This will ensure a strong economy now and in the coming decades.
The plan relies on increasing corporate taxes to fund infrastructure and taxing high-income families for family spending and education initiatives. The corporate tax rate goes up from 21% to 28%, the top capital gains rate goes up from 23.8% to 43.4%, and unrealized capital gains are taxed at death, with an exemption of $1 million per person.
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These changes would undo many of the tax cuts Republicans passed in 2017. The government also proposes to overhaul the international tax system, including by limiting deductions for companies that send their profits to low-tax countries, a plan that would raise $390 billion over 10 years.
The budget also includes $80 billion in additional spending for the Internal Revenue Service and new rules requiring banks to report account activity. These changes are expected to raise about $700 billion, as stricter enforcement will reduce tax evasion.
Young also disagreed with Republican criticism that the plan would worsen the country’s fiscal situation by significantly increasing the deficit and debt over the next decade.
The budget plan envisages a deficit of $1.84 trillion in fiscal year 2022, or 7.8% of gross domestic product, compared with a deficit of $3.67 trillion in fiscal year 2021, when the government’s emergency spending to combat the Covid 19 pandemic and its economic consequences drew red ink.
By 2022 the national debt will be 111.8%, higher than after the war. The debt will continue to rise in the coming years, reaching 117% of GDP in 2031.
E-mail Kate Davidson at [email protected] and Richard Rubin at [email protected].
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