Biden uses his budget as a bulwark in the fight against the debt ceiling – and through 2024: NPR
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President Biden will unveil his budget on Thursday, a White House proposal to reduce the deficit by $3 trillion over 10 years.
Because Congress controls the purse strings — and Republicans control the House — the plan is more of a political exercise than a practical spending road map. Rather, it’s the first fight in a high-profile political fight over government funding and the debt ceiling, and what is expected to be Biden’s second House race. White in 2024.
Biden plans to formally announce the plan in a speech in Philadelphia, where he has traveled in a politically fraught environment, often focusing only on the dumping ground for documents.
“We see this as a statement of values,” White House press secretary Karin Jean-Pierre said Wednesday. “So he wanted to make sure he was financially responsible.”
Regardless of the party in power, presidential budget proposals almost always die when they reach Congress. “It’s not going to happen,” said Bob Bixby, executive director of the Concord Coalition, a fiscal responsibility advocacy group. “This is a propaganda document.”
Even if Biden’s budget plan goes through, it won’t be enough, Bixby said. Bixby noted that the Congressional Budget Office projects that the national debt will add $20 billion over this period due to an aging population, rising health care costs, rising interest rates on the debt and tax cuts passed under the Trump administration.
Bixby said the government would need a plan to cut the deficit in half, which Biden proposes to prevent the debt from growing as a percentage of the economy.
“Fasten your seat belts: debt is rising,” he said.
Here’s what Biden’s plan means
The budget outlines plans to cover spending on longtime Biden priorities such as child care, universal early education and free community college.
Biden proposes allowing Medicare to negotiate prices for a wider range of prescription drugs. Some of this was allowed under last year’s Inflation Reduction Act.
There is a proposal to allow people on Medicaid to get HIV/AIDS and hepatitis C treatment, which the White House says could ultimately save taxpayers money and provide better care.
The budget includes a series of tax increases for the wealthy. The White House said the plan would cut tax breaks for oil and gas companies and real estate investors and end tax breaks enjoyed by the wealthy, including tax breaks on interest paid. There are other proposals to raise taxes on the wealthy.
The plan will also end tax exemptions applicable to cryptocurrency transactions.
The budget brings water to the debt ceiling debate
Washington is currently focused on budget issues, as Congress must raise the debt ceiling this summer or the US government will run out of cash to pay its bills.
Republicans have said they will push for White House spending cuts as a condition of raising the debt ceiling. They say spending is out of control.
“I don’t think raising taxes is the answer,” House Speaker Kevin McCarthy said at a press conference Wednesday. McCarthy complained that Biden dragged his feet on debt ceiling talks after their first meeting in early February.
“This is the lost moon. This is a month of more financial doubt. This is a month that hurts Americans,” McCarthy said.
But Republicans have not said what kind of spending cuts they would favor. Biden’s budget puts the ball in his court.
“We’ll analyze his budget and then work with our budget,” McCarthy said.
Biden has spent a lot of time talking about deficit reduction in his speeches, regularly mentioning that deficit spending has been reduced by $1.7 trillion during his presidency.
What he usually doesn’t say is that the cuts came because expensive pandemic-era programs ended at a time when the economy was doing better than expected. Bixby says this is an easy form of deficit reduction. Then everything will be difficult.
Biden has pushed Republicans to cut Medicare and Social Security, though McCarthy has said cuts to major programs are not in the cards.
NPR’s Lexi Shapitle contributed to this report.
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