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The White House will revive calls for transformative economic policy proposals with its 2024 budget proposal on Thursday, potentially previewing President Biden’s re-election campaign — and instigating fresh battles with Republicans as the administration nears a potentially catastrophic national debt default.
Shortly after taking office, Biden released more than $4 trillion in spending proposals aimed at fundamentally transforming large swaths of the economy, seeking change in everything from healthcare and housing to education and elder care. But the Democrats had to drastically scale back those plans before losing control of the House of Representatives in last year’s election.
Now, as party leaders begin preparing for Biden’s 2024 campaign, the White House will once again seek to highlight his vision for a much more expansive federal presence through its new budget proposal. The president’s budget will include a version of the administration’s original plans for expansions of pre-kindergarten, child care, paid family leave, elderly care, housing, the child tax credit and the Medicaid health program for the poor, according to two people with knowledge the matter, which spoke on condition of anonymity to share details of a not-yet-released document. The resurgence of those policies, which failed to pass the Senate in Biden’s first two years in office, reflects Democrats’ belief that they remain crucial policy targets for the country and are vital to their party’s political destiny, even if they certainly are a GOP-controlled house would fail.
The policy also aims to create a sharp contrast to spending battles with GOP lawmakers hoping to lower the country’s borrowing limit – which must be raised sometime this summer to avoid a potentially catastrophic default on US debt payments — to use it to get cuts for many of the kinds of programs Biden is trying to promote.
Biden’s budget will include restoring the expanded child tax credit, which expired in late 2021 over opposition from Senator Joe Manchin III (DW.Va.). The phasing out of those policies – once viewed as a potential key part of Biden’s legacy – led to a rise in child poverty, although Manchin and Republicans argued that the higher credit was exacerbating inflation.
Manchin had been considering some of the social spending ideas being pushed by the White House before suddenly pulling the plug on Biden’s Build Back Better plan in December 2021. Democrats banded together behind a smaller package over the summer that included significant funds for climate protection, a boost to US manufacturing output, a minimum corporate tax and lower prescription drug costs, among other provisions.
A White House official confirmed Wednesday night that the plan would include measures to reduce child care costs, including more than $30 billion to fund existing federal child care programs, as well as a new state-federal partnership aimed at “high Costs” to provide—quality, universal, free preschool.” The White House also confirmed Wednesday night that the budget will also reduce “wasteful special-interest spending” through measures such as eliminating tax subsidies for oil and gas companies, removing unused spending from federal prisons and the closure of various tax loopholes that benefit real estate firms, cryptocurrency transactions, and wealthy investment managers, according to the administration.
White House press secretary Karine Jean-Pierre said Wednesday that the president’s budget will also achieve nearly $3 trillion in deficit reduction over the next decade, with the administration accusing the GOP of trying to do that increase deficit through their push to extend portions of the tax from 2017 cuts under President Donald Trump, which are phasing out. Biden’s budget will include trillions of dollars in proposed tax increases for the wealthy and corporations, including many other proposals he sought but failed in his first two years in office. The tax plans in the budget include raising the minimum tax paid by billionaires to 25 percent, restoring the upper marginal tax rate to 39.6 percent for those earning more than $400,000 a year, and raising the capital gains tax rate to 39.6 percent for those earning more than $1 million and raising the corporate tax rate from 21 percent to 28 percent after it was reduced under the Trump tax plan, according to the White House.
“It’s important that President Biden use the budget as an opportunity to lay out a blueprint for an alternative, hopeful, forward-looking vision for how government can improve people’s lives,” said Karthik Ganapathy, political strategist at Left Flank, a policymaker – and communications company strategy for Democrats, who praised Biden’s work to date. “Not only is this a good governance strategy — it’s also wise policy that will shake up all sections of the Democratic Party coalition by 2024.”
Biden’s budget is also expected to include other measures, including a new plan to ensure Medicare is solvent for more than two decades and a pay rise for federal employees. According to the Wall Street Journal, the president is also expected to seek new rules to monitor foreign investments by US companies in China. The budget will also ask for more than $1 billion to track — and prevent — fraud in pandemic relief programs, particularly unemployment insurance, the White House said last week.
The Conservatives will certainly reject almost the entire budget and in particular the President’s attempts to reinvigorate parts of the ‘Build Back Better’ agenda. Doug Holtz-Eakin, a GOP policy analyst, also pointed out that the White House broke the statutory deadline for releasing the budget of the first Monday in February and is now more than a month late.
“There’s no philosophy here — it’s just a disjointed collection of desires that don’t add up, and it’s really quite frustrating,” Holtz-Eakin said. “They couldn’t get through when they controlled both houses; it is now dead on arrival.”
Rep. Ben Cline (R-Va.), who sits on the House Appropriations and Budget Committees, planned the proposed tax increases.
Biden is “struggling to keep up with the movement of the new Republican majority,” Cline said. “He’s realized that his trillions in spending aren’t going to find a way into a Republican house, so he’s revising his numbers and essentially raising taxes to keep trying to fund as much of his agenda as possible.”
Biden’s Medicare plan is expected to include big new tax hikes for high earners and new rules aimed at reducing federal and consumer spending on prescription drugs.
Tony Romm contributed to this report.
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