President Joe Biden will unveil a $6 trillion budget proposal on Friday to make the United States more competitive by investing in education, climate change and transportation, in an ambitious plan that will mark the highest level of sustained federal government spending in America since World War II.
Citing leaked budget documents, the New York Times reported that the spending plan for 2022 calls for investments in roads, water pipes, broadband internet, electric vehicle charging stations and research in order to make the economy more competitive, and provides for an expanded social safety net with affordable childcare, universal pre-kindergarten and a paid leave program. The proposals are likely to run into opposition from the Republicans.
The two-part agenda, contained in the US president’s American Jobs Plan and American Families Plan, will push up deficit and keep it above $1 trillion for a decade. The president plans to pay for it with increased taxes on corporations and the wealthy (those earning less than $400,000 annually will be spared), administration officials have said, while adding that the additional revenue will take time to trickle in.
“We must be number one in the world to lead the world in the 21st century,” Biden said in Cleveland, Ohio on Thursday after listing out investments being made by China, Japan and the European Union to shore up their economies.
“Now is the time to build the foundation that we’ve laid — to make bold investments in our families, in our communities, in our nation. We know from history that these kinds of investments raise both the floor and the ceiling of the economy for everybody.”
President Biden’s plan seeks to take an economy emerging from recession and expand it through massive federal spending, taking advantage of interest rates being at a historic low, and make it competitive, especially against China. This will create “a new paradigm — one that rewards work, the working people in this nation, not just those at the top”, as Biden said.
The proposal fulfils some of Biden’s campaign promises, including more money for schools in high-poverty areas, free community colleges, cancer research and climate change. But leaves out a key element — public option, which will give Americans the choice to opt for government-run healthcare programme, Medicare, or private insurance. The White House expects lawmakers to introduce it into the legislation when it is being considered by congress.
The budget is only the administration’s spending proposal. It must be passed by congress to become effective. But with Democrats in control of both — the House of Representatives and the Senate — Biden is positioned to get his ambitious plan through, most parts of it at least.
Republicans will push back, as has been the pattern. No Republican voted for Biden’s Rescue Plan and have given a counteroffer of $928 billion to his $1.7 trillion infrastructure investment proposal (down from the $2.2 billion originally).
“This is the latest example of President Biden abandoning his lofty promise that he can fund trillions of dollars in new spending simply by taxing the wealthy or corporations alone,” Republican member of the House Ways and Means Committee, which has oversight on budget, said in a statement.
President Biden will also face some pushback from within his party. Senator Joe Manchin, a moderate Democrat, who has emerged as a key swing vote in the evenly divided senate, publicly said he does not support the president’s proposed tax rate on corporations of 28%, up from 21%.
