President Biden Unveils $6.8 Trillion Budget 'Blueprint'

[Get Ya Wig Split]

What’s in Biden’s 2024 Budget Request​

Blueprint includes spending boost for Pentagon, tax increases on wealthy​

The Biden administration on Thursday released a budget outline for fiscal year 2024 that highlights the president’s policy priorities, calling for increases in funding for defense, immigration, healthcare and clean energy programs.

The budget outline calls for Congress to approve $1.7 trillion in discretionary federal spending next year, including $885 billion for defense and roughly $809 billion for nondefense and veterans’ health programs. The overall budget, including non-discretionary entitlement programs like Social Security and Medicare, would cost $6.9 trillion, an increase over the roughly $6.4 trillion the administration expects the federal government to spend in 2023.

The White House says that its proposed tax increases on wealthy people and large corporations would cut deficits by around $3 trillion over the next decade.

The document is an opening step in the federal budgeting process and serves as a statement of the administration’s priorities ahead of spending negotiations with Republicans, who control the House.
Here is what is in the Biden administration’s budget outline:

Defense​

The Pentagon budget request for $842 billion is a 3.2% increase on what Congress enacted last year, below the top end of analysts’ expectations. With inflation in the sector running around 5%, the proposal represents a cut in real terms.

The national security request includes an additional $7 billion for further military support for Ukraine and $23.6 billion for the Energy Department as part of the modernization of sea, land and air-based nuclear weapons.

Further support for Ukraine is expected by analysts to come in the form of supplemental requests to Congress for additional funds to provide weapons directly and replenish U.S. and allies’ stocks.

The out-year guidance for fiscal 2025 and beyond calls for a further flattening of growth, highlighting the choices faced by the Pentagon and Congress. These include retiring older planes and ships to make way for modern platforms such as uncrewed aircraft and space assets aimed at countering the rapid expansion of capabilities by potential adversaries such as China.

Taxes​

The budget reprises Mr. Biden’s past proposals to raise taxes on top earners and large corporations, most of which he has struggled to get through Congress, even when it was controlled by Democrats.

As he has before, Mr. Biden proposed raising the top individual tax rate to 39.6% from 37%, raising the corporate tax rate to 28% from 21%, taxing top earners’ capital gains at higher rates and increasing taxes on U.S. companies’ foreign profits to 21% from 10.5%. He also called for extending tax cuts that are set to expire after 2025—but only for households making under $400,000 and without actually including the cost of those tax cuts in the budget.

There are some new proposals, too. Mr. Biden is calling for expanding taxes on top earners that go toward Medicare. He would raise existing taxes on wages, self-employment income and investments to 5% from 3.8% above $400,000 in income and expand those taxes to cover active business income.
The budget also seeks a 15% budget increase for the Internal Revenue Service that is separate from the $80 billion it got last year as part of the Inflation Reduction Act to expand enforcement and update the tax agency’s technology.

Health​

The budget would extend Medicare trust fund solvency, empower the program to negotiate prices for more drugs, and permanently expand subsidies available to people obtaining Affordable Care Act health plans. It requests $144 billion in discretionary budget authority for Health and Human Services, an 11.5% increase from the 2023 enacted level.

The proposal would provide health coverage similar to Medicaid to people living in the 11 states that haven’t expanded the program for the low income and disabled. HHS would be authorized to negotiate additional Medicaid drug rebates for states to pool purchasing power. And the proposal would invest $150 billion over 10 years to grow Medicaid’s home and community services.

On Medicare, Mr. Biden calls for expanding a tax on Americans earning more than $400,000 annually, aiming to sustain the solvency of the hospital fund by at least 25 years in part by raising Medicare taxes to 5% from 3.8%. New proposals on drug costs would also raise about $200 billion over a decade for a key Medicare trust fund, the White House says. The proposals would let Medicare negotiate prices for more drugs and accelerate the process by making drugs subject to negotiation sooner after they launch.

The budget proposes $11 billion for a five-year effort the White House hopes will eliminate hepatitis C in the U.S., said Dr. Francis Collins, the former National Institutes of Health director who is spearheading the initiative. Drugs to treat the disease have been on the market since 2013, but normally retail for about $24,000 per patient.

Social security​

The budget includes a pledge that Mr. Biden won’t seek cuts to Social Security, and will seek to work with Congress to raise taxes on “high-income individuals” to support the program’s long-term viability. Social Security taxes are currently capped, with the maximum amount of earnings subject to the payroll tax rising to $160,200 in 2023, from $147,000 in 2022. The earnings cap is tied to a national average wage index.
The Social Security Administration would also receive an increase of $1.4 billion under the administration’s budget, a 10% increase, which would be designated for improving customer service and adding staff to process disability claims.

What’s in Biden’s 2024 Budget Request

The Biden administration released a budget outline for fiscal year 2024 that highlights the president’s policy priorities, calling for increases in funding for defense, immigration, healthcare and clean energy programs.

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