President Joe Biden’s new budget request called for funding increases for defense and domestic priorities, but its claims of deficit reduction don’t quite add up.
Summary
President Joe Biden’s new budget request called for funding increases for defense and domestic priorities, but its claims of deficit reduction don’t quite add up.
- President Joe Biden’s budget proposes $5.8 trillion in federal spending for the fiscal year beginning in October 2022, with an estimated deficit of $1.15 trillion.
- The Biden proposal calls for $813 billion for defense spending, a nominal increase but less than Congressional Republicans wanted.
- Biden wants to pay for new spending with a “billionaire minimum income tax,” which would require households worth more than $100 million (aka not billionaires) to pay 20% in taxes on income and “unrealized gains” in unsold investments.
- Republicans dismissed Biden’s budget as “more of the same” and said it overspends on “wasteful domestic programs.”
- Sen. Joe Manchin (D-WV) already dismissed Biden’s proposed 20 percent minimum tax on billionaires as a non-starter. Biden’s plan would feature a new form of tax that taxes “the value an asset accrues in theory before it is actually sold and converted into cash.”
- The New York Times outlined the policies in Biden’s “$5.8 trillion wish list” which includes domestic and defense spending increases, tax hikes, and substantial funding increases for climate change and education.
- A CNN opinion piece hit Biden for being “the timid moderate he always appeared to be” and attacked him for asking for more defense and police funding. The author claimed these priorities would result in a “red wave” in November, and instead, Biden should tack leftward and support hard-left policy goals like “universal child care” to fire up the left-wing base.
- The Washington Post argued Biden’s budget is an attempt to “insulate” Democrats heading into what’s expected to be a brutal midterm election for their party. Biden’s budget should be “understood as a political statement, not actual policy.”
- Fox News obtained the House Republican response to Biden’s budget. Their proposal, unlike the president’s, would seek to eliminate the deficit within 5 years.
- The Dispatch called out the administration’s slipperiness on the budget. In a breakdown of Biden’s budget math found his proposal uses budget gimmicks – like excluding the $2.4 trillion cost of his biggest proposed policies – to make his budget appear more moderate.
- National Review heaped scorn on Biden’s proposed so-called “billionaire minimum income tax” (which taxes non-billionaires), saying it is “economically illiterate and very likely unconstitutional” and “deserves to be laughed out of Congress.”
Author’s Take
It’s an annual tradition for presidents to propose a budget, and for Congress to immediately ignore it. Most presidents’ budgets are “dead on arrival,” even when Congress is controlled by their party. Presidents’ budgets are more about signaling their policy priorities and scoring political points rather than actual policy.
That said, what are Biden’s priorities? His budget calls for substantial increases in defense, police, climate change, and domestic funding. He claims his budget will reduce the deficit and trumpets a billionaire tax that applies to non-billionaires. Does his math work out? No. Does his budget actually reduce the deficit? According to The Dispatch, not even close. But does that matter for their purposes? Not even a little bit. This budget is designed to get positive headlines and help Democrats heading into a rough midterm election. Keep that in mind.
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© Dominic Moore, 2022
