President Joe Biden has underscored how his budget request could decrease federal deficits by $3 trillion over a decade.
But as the president burnishes his debt reduction credentials, his fiscal 2024 budget marks the return of some expensive and expansive spending proposals that were blocked earlier in his administration before he likely announces his reelection campaign.
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Biden's budget, if cleared by Congress, would be "a disaster for capital development and formation," Club for Growth President David McIntosh told the Washington Examiner.
"Exactly the wrong thing as we're still struggling with inflation and the Federal Reserve still having to raise interest rates," he said. "If the Biden tax bill, if we waved a wand and suddenly it passed today, it'd be like a knife into the economy and the economic recovery."
"It would be good if he focused on cutting the spending," he added. "The problem with deficits is that Congress spends too much, not that the economy is flourishing and has capital."
Bipartisan Policy Center Senior Vice President Bill Hoagland amplified the importance of considering debt in terms of gross domestic product. Biden should be trying to decrease deficits by $6-8 trillion over the next decade, according to the former Republican Senate budget and appropriations aide.
Biden's Medicare pitch is one instance of the president putting forward taxes without reducing spending. Biden wants to protect Medicare’s Hospital Insurance Trust Fund by increasing the Medicare tax rate for people earning more than $400,000 from 3.8% to 5% and the Hospital Insurance Trust Fund through savings from the Inflation Reduction Act's prescription drug negotiation provisions.
"If the only thing they're focusing on is increasing taxes, it's the usual statement we make about budgets from the president at this stage, and that's it's pretty much dead on arrival in a Republican Congress," Hoagland said. "You're going to need to reform the Medicare program in such a way that slows the rate of growth, not necessarily to cut the program but to simply slow the rate of growth."
During a campaign-style event in the battleground state of Pennsylvania, Biden framed his budget as a "from the bottom up and middle out" investment in "all of America," including "folks who've been forgotten amid the economic upheaval of the past four decades."
"Not anymore. I promise you I see you," he said Thursday in a Philadelphia union hall. "We've got work to do. We've made a lot of progress in the first three years. Families across the country are starting to breathe a little easier. We've got further to go."
In the budget, Biden reiterated his support for, for example, expanded child, earned income, and Obamacare premium tax credits, in addition to a universal $35 insulin price cap and a $325 billion 12-week national paid family and medical leave program.
"To continue efforts to restore and strengthen American democracy, the budget proposes $5 billion in new election assistance funding to be allocated over 10 years, $1.5 billion to support increasing the living allowance provided to AmeriCorps members so that national service is a more accessible pathway to success, and $73 million to support American history and civics education programs," a White House fact sheet adds.
Biden also repeated some tax schemes, such as a 25% billionaires minimum tax, a 28% corporate tax, a 21% global minimum corporate tax, and a 4% stock buyback tax.
White House Office of Management and Budget Director Shalanda Young defended Biden's decreases, contending he "inherited historically high deficits from the previous administration," which she claimed contributed $2 trillion to the debt through former President Donald Trump's 2017 tax cuts.
"Look, as we effectively make the transition to stable and steady growth, which we've also talked about a lot over the past month, having wound down emergency programs from the pandemic and gotten our economy back on track, we would not expect to continue to see large deficit reduction year to year," she said.
"We're investing responsibly while reducing the deficit," she continued. "We have almost a billion-dollar increase in childcare block grants. I think anybody will tell you: When you look at the childcare system in this country, that probably doesn't even meet the mark on what we should be doing."
Republicans have criticized Biden's deficit-debt rhetoric, including the Republican National Committee and House GOP leadership, disputing assertions they will add $3 trillion.
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“President Joe Biden’s budget is a reckless proposal doubling down on the same far-Left spending policies that have led to record inflation and our current debt crisis," House Speaker Kevin McCarthy (R-CA), House Majority Leader Steve Scalise (R-LA), House Republican Whip Tom Emmer (R-MN), and House Republican Conference Chairwoman Elise Stefanik (R-NY) wrote in a joint statement.
"In the next ten years, the federal government will spend over $10 trillion on interest alone," they added. “We must cut wasteful government spending. Our debt is one of the greatest threats to America and the time to address this crisis is now.”