(The Center Square) – President Joe Biden on Monday released his $7.3 trillion budget proposal for fiscal year 2025 with $5.5 trillion in tax increases that continues to increase the national debt.
While the budget is only a recommendation from the White House that has almost no chance of becoming an actual budget, it lays out the president’s priorities for spending and which tax increases he is willing to publicly get behind.
“Specifically, the Budget reduces the deficit by around $3 trillion over the next decade, compared to deficits without the President’s policies,” the White House said in a statement. “The deficit reduction in the Budget increases over time, with over $500 billion of deficit reduction in 2034.”
Despite the claims of deficit reduction, the White House’s own numbers say the national debt under the budget plan would rise to $45 trillion by 2034.
The White House plan, though, would increase the debt slower than the existing trajectory and pay for it with several tax increases, including a 25% minimum tax on billionaires, as well as ramping up audits on Americans to increase IRS collection.
“While the level of borrowing under the President’s budget would be unprecedented outside a war or national emergency, it would be $3.3 trillion lower than under OMB’s baseline over the FY 2024 through 2034 budget window,” the Committee for a Responsible Federal Budget said in its analysis of Biden’s budget.
The budget would also repeal large parts of former President Donald Trump’s 2017 tax reform legislation.
“[The budget] also proposes taxing capital gains at the same rate as wage income for those with more than $1 million in income, closing the capital gains loophole that allows the wealthy to avoid ever paying tax on their appreciated investments, and finally closing the carried interest loophole that allows some wealthy investment fund managers to pay tax at lower rates than their secretaries,” the White House said in a statement.
Experts have continued to raise serious concerns about the ballooning national debt, which is currently over $34 trillion and quickly growing.
“Over the next decade, we are on pace to grow our debt to an all-time high as a share of GDP, fueling record interest costs,” Michael A. Peterson, CEO of the Peter G. Peterson Foundation, said in a statement responding to the budget. “Meanwhile, critical programs including Social Security and Medicare are in significant danger of automatic cuts for all beneficiaries, and we can’t let that happen. Without action, all Social Security recipients will face a 23% cut in 2033 — that would mean a $17,000 reduction annually for the typical couple. In only 7 years, Medicare faces an 11% cut to providers that would affect more than 77 million enrollees.”
Budget analysts concerned about the soaring national debt welcomed some of the tax increases, but said it is not enough.
“This budget is an important step in the right direction, but it’s still too little,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement. “The budget lacks a plan to put the debt on a downward path, to pay for its proposed tax cut extensions, or to prevent the 23 percent across-the-board Social Security benefit cut – the equivalent of a $17,400 cut for a newly retired couple – scheduled to take effect around 2033.”
Specific provisions of the bill took fire, though the massive budget is still being poured over. Biden’s budget would cut subsidies for oil and gas companies to save money, though critics say those costs will be passed on to consumers.
The plan would also eliminate tax breaks for cryptocurrency and real estate, another of a range of proposals in the large budget plan.
House Republican leadership, including Speaker Mike Johnson, R-La., Whip Tom Emmer, Majority Leader Steve Scalise, R-La., and Conference Chair Elise Stefanik, R-N.Y. released a joint statement blasting the budget.
“While hardworking Americans struggle with crushing inflation and mounting national debt, the President would increase their pain to spend trillions of additional taxpayer dollars to advance his left-wing agenda,” the group said.
