US President Joe Biden’s $6.8 trillion budget hangs in the balance as Congress resumes its sitting on Monday as Republicans have vowed to defeat it demanding spending cuts, though Democrats claim that the budget would raise more revenue by increasing taxes on oil and gas companies, hiking the corporate tax rate to 28 from 21 per cent, and allow Medicare to negotiate drug prices, besides funding social welfare programmes .
The President’s social spend includes increasing funding for early childhood education and childcare, expanding the $35 cap on insulin prices to all Americans and expanding free community college, besides boosting military spending to more than $835 billion, making it among the largest peacetime expenditures in US history, media reports claim.
But the Biden budget is seeing strong prospects of not being passed amid the Republican and Democrat gridlock over raising the debt ceiling limit that has breached the $31.4 trillion limit, even as the Treasury Secretary Janet J. Yellen maintained extraordinary measures could keep the economy going without any peril until June this year.
President Biden unveiled his budget as early as Thursday, vowing to cut $3 trillion from the federal deficit over the next decade, in part, by levying a 25 per cent minimum tax on the wealthiest Americans.
With much mulling on both sides, across the aisles, the budget still faces uncertainty of being passed as the Congress resumes on Monday, unless those in GOP opposed to Trumpian and extreme right-wing hardliners demand for spending cuts extend their helping hand to the Democrats across the aisles, media experts opine feeling that some Republicans look to 2024 GOP prospects than the current scenario.
Biden’s budget seeks to raise more revenue by increasing taxes on oil and gas companies, hiking the corporate tax rate to 28 from 21 per cent imposed under former President Donald Trump, and yet below the pre-2017, 35 per cent tax, and allowing Medicare to negotiate drug prices, reports said.
Though Biden is yet to announce his re-election bid in 2024, while his arch rival Trump has, even amid speculation in GOP that Florida Governor Ron DeSantis, holding horses now, would outdo him close to the primaries, upcoming later this year .
Biden’s budget is actually a preview into his 2024 election run for White House, raising his campaign pitch that he supports the urban middle class, long considered by the Democrats since the Clinton’s golden era to be the backbone of the American economy.
But the House of Representatives in the Congress is now Republican-controlled with a wafer thin majority of nine members, 222 to 213. It’s unlikely many of the proposals will be passed in their current form. The President can present a budget but it’s the Congress that decides where the funds have to come from.
White House Office of Management and Budget Director, Shalanda Young, told reporters the administration is able to cut deficit spending “by asking the wealthy and big corporations to begin to pay their fair share and by cutting wasteful spending on Big Pharma, Big Oil and other special interests, ” media reports said.
Biden’s government has sought to reform the tax code to reward work, not wealth, ensuring that no billionaire pays a lower tax rate than a teacher or fire-fighter and by quadrupling the tax rate on corporate stock buybacks,” Young said.
“That’s a very clear contrast with Congressional Republicans.”
The Stock Buybacks Tax furthers Biden’s signature to a law last year reducing the differential treatment in the code between buybacks and dividends. Government wants the big businesses to invest in growth rather than spend on stock buybacks. The tax would quadruple from one to four per cent. A Data for Progress poll from February found 58 per cent of Americans support increasing the stock-buyback tax.
Cecilia Rouse, Chair of the Council of Economic Advisers, says the administration believes the social programmes will actually boost the economy.
“Policies such as paid leave and childcare will bring more workers into the labour force and improve productivity,” Rouse said.
“Investments in early education, mental health and community college not only expand our economy’s productive capacity but pay dividends for generations to come.”
Besides social spending, Biden’s budget has robust defence funding at more than $835 billion, claimed to be the largest peacetime expenditures in US history.
In an unusual gesture, Biden has for weeks urged House Republicans to present their own budget proposals instead of criticising him. House Republicans did promise a balanced budget but scoffed when the White House pointed to GOP proposals to make cuts to programmes like social security and medicare.
House Budget Committee Chair, Jodey Arrington, told CNN the Republican budget should be ready by the second week in May.