
President Biden on Monday will propose a budget packed with tax increases on corporations and high-income earners, new spending on social programs, and a wide range of efforts to combat high consumer costs such as housing and college tuition. .
The new spending and tax increases included in the fiscal 2025 budget have almost no chance of becoming law this year, given that Republicans control the House and staunchly oppose Biden’s tax agenda. Last week, House Republicans approved a budget proposal outlining his priorities, which are very far from what the Democrats have asked for.
Instead, the document will serve as a draft of Biden’s political platform as he seeks re-election in November, along with a series of contrasts intended to draw a distinction from his presumptive Republican opponent, former President Donald J. Trump.
Biden has tried to regain strength on economic issues with voters who have given him low marks amid rapid inflation. This budget aims to present you as an advocate for greater government aid for workers, parents, manufacturers, retirees and students, as well as the fight against climate change. Biden’s budget proposes more than offsetting the cost of those priorities through tax increases on big businesses and the wealthy. The president has already begun trying to portray Trump as the opposite: a supporter of bigger tax cuts for corporations.
“A fair tax code is how we invest in the things that make this country great: health care, education, defense and so much more,” Biden said Thursday during his State of the Union address.
Later in the speech, in a call and response with House Democrats, Biden added: “Friends at home, does anyone really think the tax code is fair? Do you really think big, rich corporations need another $2 trillion tax cut? Surely not. “I’m going to keep fighting like hell to make it fair.”
Polls show Americans are dissatisfied with Biden’s handling of the economy and favor Trump’s approach to economic issues. But Biden has been steadfast in his core economic policy strategy and the budget is not expected to deviate from that plan.
White House officials, anticipating the budget release, said Biden would propose about $3 trillion in new measures to reduce the budget deficit over the next decade. This is in line with his budget proposal last year, which reduced deficits by raising taxes on corporations and the wealthy and allowing the government to negotiate more aggressively with pharmaceutical companies to reduce spending on prescription drugs.
Biden is set to once again call for raising the corporate tax rate to 28 percent from 21 percent, the level Trump set in the tax bill he signed in late 2017. Biden will also propose raising a new minimum tax on large corporations and quadrupling a tax on stock buybacks, among other efforts to raise more revenue from companies and individuals earning more than $400,000 a year.
Those savings would build on discretionary spending limits that Biden and congressional Republicans agreed to last year to resolve a standoff over raising the nation’s debt limit. But even if Congress were to accept Biden’s $3 trillion proposals, the deficit would still average about $1.7 trillion a year for the next decade, according to projections from the Nonpartisan Congressional Budget Office.
House Republicans last week released a budget that seeks to reduce deficits much faster, balancing the budget by the end of the decade. Their savings depended on economic growth forecasts that are well above the expectations of traditional forecasters, along with steep and often unspecified spending cuts.
The nonpartisan Committee for a Responsible Federal Budget called the Republican plan “unrealistic in its assumptions and results.” Last year, the same group said Biden’s budget fell “well short of the deficit reduction needed to put the nation on a sustainable fiscal path.”
Biden and his aides have repeatedly said they are comfortable that the projected deficits in their budgets will not hurt the economy. Instead of pivoting toward more aggressive deficit reduction, as previous Democratic presidents did after losing control of one chamber of Congress, Biden has leaned toward the need for new spending programs and targeted tax incentives.
White House officials said the new budget proposal would continue that trend. It will include a national paid leave program for workers. It will restore an expanded child tax credit that Biden temporarily created in his $1.9 trillion economic stimulus law in 2021, and which helped significantly reduce child poverty in the span of a year before it expired.
It will also include new efforts to help Americans deal with high costs. That issue has dogged Biden among voters since inflation soared during his term to its highest levels in four decades, even as price increases have cooled over the past year. Biden previewed many of those efforts in his State of the Union address, including new tax credits for certain homebuyers and greater assistance for people to purchase health insurance through the Affordable Care Act.
Biden will also call for new efforts to improve the solvency of Social Security and Medicare, though not the full Social Security overhaul he anticipated in the 2020 campaign but has failed to deliver on in office. He will oppose benefit cuts to the programs, officials said, suggesting that he favors a familiar strategy to bolster them: raising taxes on higher earners.