Article Summary –
President Joe Biden’s budget request for fiscal 2025 of $7.266 trillion proposes that the wealthy pay their fair share of taxes. It highlights spending categories such as $900 billion on defense, $1.029 trillion on domestic discretionary spending, and mandatory programs like Social Security ($1.543 trillion), Medicare ($936 billion) and Medicaid ($589 billion). It also proposes a deficit of $1.781 trillion which will decrease over the following four years before rising again, but it will never fall below the $1 trillion mark.
President Biden’s Budget Request for Upcoming Fiscal Year
President Joe Biden has put forth his $7.266 trillion budget request for the approaching fiscal year, enforcing the spending accord negotiated last year and pushing for tax law reforms to ensure “wealthy pay their fair share”.
While the budget request doesn’t allocate funds since that’s Congress’s jurisdiction, it lays out the president’s vision for federal changes and taxpayer dollar distribution. The fiscal 2025 budget request, a 188-page document, comes at an important juncture for Biden, indicating a budget year commencing on Oct. 1.
President Biden stated that the proposed budget would help realize progress and resilience, and further the work his administration has done since its inception.
Budget Distribution
The proposed spending encompasses diverse budget categories, with $900 billion for defense discretionary, $1.029 trillion for domestic discretionary, and the remainder for mandatory programs such as Social Security ($1.543 trillion), Medicare ($936 billion), and Medicaid ($589 billion).
Additionally, $965 billion is dedicated to interest payments on national debt. The proposal envisions a $1.781 trillion deficit for fiscal 2025, declining over the following four years before rising again towards the end of the 10-year budget window, but never dipping below the $1 trillion mark.
Child Tax Credit, Medicare, Social Security
Biden’s budget seeks expansion of the child tax credit to levels maintained during COVID-19, which lowered child poverty to a record low in 2021. The budget also proposes Medicare reinforcements through increased tax rates on incomes over $400,000, and loophole closures in existing Medicare taxes.
While the budget emphasizes Biden’s commitment to protect Medicare and Social Security, it doesn’t present tangible plans for averting a projected 25% drop in Social Security benefits in a decade owing to trust fund insolvency.
Ukraine, Israel Funding
Budget Director Shalanda Young iterated that the budget requests Congress for urgent spending for Ukraine and Israel’s war efforts.
The president’s request also seeks increased spending on U.S. border security. Young is set to present her testimony regarding the budget request before the Senate Budget Committee on Tuesday, and the House Budget Committee on March 21.
Contrasts with GOP Budget Proposals
Jared Bernstein, Chair of the Council of Economic Advisers, pinpointed the difference between the House GOP’s budget resolution and the White House budget request as “reality”. He questioned the GOP’s optimistic prediction of 3% economic growth for budget resolution balance.
Young added that the GOP’s budget resolution isn’t transparent about its cuts and harms, contrasting it with the president’s detailed budget request.
Last Year’s Pending Work
While Congress’s budget resolution provides a tax and spending blueprint for a 10-year budget window, actual spending is earmarked for the 12 annual government spending bills. Congress has yet to complete half of the work due before March 22.
The proposed fiscal year 2025 budget should enable the House and Senate spending panels to initiate next year’s process, but they first need to wrap up last year’s lagging process.
Republican Reaction
Leading House Republicans criticized Biden’s budget request as a “roadmap to accelerate America’s decline”, asserting that their measures to control spending have already yielded $2.6 trillion in projected deficit reductions over the next ten years.
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