Topline
The White House on Friday released President Biden’s $6 trillion budget proposal for the 2022 fiscal year beginning Oct. 1, making the case that those record expenditures are needed to ensure a lasting recovery and protect American competitiveness in the wake of the devastation caused by the coronavirus crisis.
U.S. President Joe Biden on May 17, 2021 in Washington, DC.
Key Facts
According to the budget, the White House expects the $2.2 trillion American Jobs Plan to raise the federal deficit by $529 billion over the next ten years after $1.7 trillion in revenue from tax hikes, mostly for corporations, during that period.
Over the next decade, according to the budget proposal, the American Jobs Plan would spend $565 billion on research and development, manufacturing and job training; $546 billion on modernizing transportation infrastructure; and $308 billion on clean drinking water, the electrical grid, and broadband.
The Biden Administration expects the $1.8 trillion American Families Plan to raise the deficit by a net $270 billion over the next decade, after accounting for $1.5 trillion in extra revenue from tax hikes, loophole closers and enhanced enforcement by the Internal Revenue Service, all aimed at the wealthy.
Over the next decade, the White House is proposing spending $437 billion on four years of free education, $498 billion on children and families (including through childcare programs and universal family and medical leave) and $449 billion to temporarily extend the expanded Child Tax Credit as part of the American Families Plan.
The White House has said it expects both plans to pay for themselves over the next fifteen years thanks to the tax hikes included in each.
The budget also accounts for $16.8 trillion in discretionary spending over a decade, including $8.2 trillion on defense.
Big Number
The White House predicts the nation’s Gross Domestic Product will grow 3.2% in 2022 before growth falls to 1.8% in 2024 and stays at that level through 2027. It expects GDP growth to reach 2% again in 2030. But those are base level forecasts that do not account for the impact of the American Families and American Jobs plans, though they do account for a rise in interest rates as the economy recovers.
Crucial Quote
“The budget will reduce the deficit and improve our nation’s finances,” Shalanda Young, acting director of the Office of Management and Budget, told reporters Friday. “That’s because its front-loaded investments are more than paid for through permanent tax reform that will ensure corporations and the wealthiest Americans pay their fair share.”
Chief Critic
“Now we know why the Administration tried to bury their budget announcement on the Friday before a holiday weekend,” Senate Minority Leader Mitch McConnell (R-Ky.), according to Bloomberg’s Erik Wasson. “President Biden’s proposal would drown American families in debt, deficits, and inflation.”
What We Don’t Know
How much of Biden’s request will actually become law. It’s up to Congress to approve new federal spending.
Further Reading
Biden’s Costly Agenda Alarms Republicans, But Trump Spent Big Too (Forbes)
Biden Budget Will Push Federal Debt As Share Of Economy To Record Level, Report Says (Forbes)
Here’s What’s In Biden’s $2 Trillion Infrastructure Plan (Forbes)
Biden Will Unveil $1.8 Trillion American Families Plan Today—Here’s What’s In It (Forbes)
