President Biden on Monday rolled out his sweeping, $7.3 trillion budget request for 2025, with a set of ambitious proposals aimed at raising taxes on wealthy individuals and corporations.
The president calls for trimming the nation’s deficits by $3 trillion in the next 10 years, doubling down on pitches to increase the corporate tax rate, enact a minimum tax on billionaires and quadruple the stock buybacks tax.
While the proposal stands no chance of becoming law in the divided Congress, the president can point to it on the campaign trail, and it could serve as a guide for Democrats as Congress begins to look at funding for fiscal 2025, which begins in the fall.
The budget leans into measures the White House says are aimed at cracking down on “wealthy tax cheats,” targeting parts of former President Trump’s signature 2017 tax plan that Democrats have panned as tax cuts for the wealthy. The budget request also supports extending tax cuts for Americans making less than $400,000, but with additional reforms.
The president’s latest proposal echoes last year’s budget plan, which also aimed to lower the deficit by $3 trillion and raise taxes on the wealthy. The White House has also been stalwart about protecting Social Security and Medicare, which it argues the new budget plan would protect, as Democrats have worked to hammer Republicans on the key campaign issue.
The latest example came hours before the unveiling of his budget on Monday, as Trump critics circulated a clip of the former president arguing “there is a lot you can do” when it comes to entitlement programs.
Biden responded with a post on social media, writing, “Not on my watch.”
Biden’s plan proposes shoring up solvency for Medicare’s hospital insurance trust fund, in part by raising tax rates on Americans earning above $400,000, reforming the capital gains tax and eliminating tax subsidies for real estate and cryptocurrency transactions.
It would also extend the solvency of Social Security, which faces serious threats to funding, by “asking the highest income Americans to pay their fair share,” but the proposal doesn’t specify how this would be accomplished.
Biden’s proposal comes as he deals with lackluster polling numbers and persistent concerns about his handling of the economy — despite signs that the economy is on the mend, including cooling inflation, a booming stock market and lowered unemployment.
During a State of the Union address last week that read at times as more of a campaign speech, Biden touted his administration’s economic moves and knocked those of his predecessor — who’s on track to win the Republican presidential nomination, teeing up a Biden-Trump rematch in November’s general election.
“Folks, I inherited an economy that was on the brink. Now, our economy is literally the envy of the world,” Biden told a raucous Congress, arguing the country is on a “comeback.”
But one recent CBS News/YouGov poll taken in the days before the State of the Union found more than half of surveyed voters thought the economy under Biden was bad, compared with less than a third who thought economic conditions were bad under Trump.
Biden during his speech last week pointed forward, foreshadowing his 2025 budget by laying out plans to lower costs for Americans and “make the tax code fair,” as the 2024 race revs up, and as the incumbent promises voters he’ll finish the job with another term in the Oval Office.
Aside from going big on taxes, Democrats have also lauded proposals in the plan in areas including child care, climate change and housing.
“By proposing historic investments in child care, lowering drug prices and health care costs, increasing access to affordable housing, and helping people access higher paying jobs, President Biden is focused on helping the middle class and working Americans,” Rep. Rosa DeLauro (Conn.), the top Democrat on the House Appropriations Committee, said in a statement on Monday.
The plan would raise funding for a number of offices, but one of the biggest jumps would be an 8.9 percent increase in budget authority for the Social Security Administration (SSA) compared with fiscal 2023 levels.
The White House said the funding boost is aimed at improving service delivery and expanding access to the program, particularly for “underserved communities.” The budget plan also calls for the establishment of a national paid family and medical leave program that would operate under the SSA, similar to a proposal Democrats pushed for as part of Biden’s signature “Build Back Better” plan when he first took office.
The Environmental Protection Agency would see an 8.4 percent increase in budget authority from fiscal 2023 levels under the plan, with proposals focused on tackling climate change, investing in water infrastructure and securing more dollars for the Office of Air and Radiation and grant programs aimed at combating lead contamination in drinking water.
The sprawling proposal calls for more support for a wide array of agencies and services key to Democratic priorities, including increases to the maximum Pell Grant award and the housing voucher program, improved immigration courts, and Democratic wish list items such as a proposal for a new program guaranteeing affordable child care for families with annual incomes below $200,000.
Upon the plan’s rollout, budget hawks welcomed Biden’s tax proposals to reduce the national deficit, but they said more action is needed to address the federal government’s climbing debt.
“There are many helpful proposals in the budget that could reduce projected deficits, including ideas to close various tax loopholes, lower prescription drug costs, and raise significant amounts of new revenue,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said Monday. “But at the same time, it turns around and spends much of this money, eating into the overall savings.”
Michael Peterson, CEO of the Peter G. Peterson Foundation, also called the president’s proposed plan a “meaningful step in the right direction but unfortunately not nearly enough to stabilize our fiscal future.”
“Over the next decade, we are on pace to grow our debt to an all-time high as a share of [gross domestic product], fueling record interest costs,” Peterson said. “Meanwhile, critical programs including Social Security and Medicare are in significant danger of automatic cuts for all beneficiaries, and we can’t let that happen.
Republicans, meanwhile, have railed against the plan, while pointing to their own proposals for the coming year.
“House Republicans reject Biden’s misguided budget proposal and have taken action to steer our nation back to a path of fiscal sanity,” House GOP leaders argued in a statement Monday afternoon, adding that the party’s “budget plan for the next fiscal year, preceding the president’s proposal, reflects the values of hardworking Americans who know that in tough economic times, fiscal discipline is non-negotiable.”
While lawmakers are still working to tie up funding for fiscal 2024 this month, the president’s request provides a glimpse into where Democrats could be pressing for bigger increases when Congress begins its work for fiscal 2025 funding in the coming weeks.
White House officials on Monday sought to paint Biden’s proposal in stark contrast to congressional Republicans’ efforts, just days after the GOP-led House Budget Committee advanced its own budget proposal.
Office of Management and Budget Director Shalanda Young told reporters that Republicans’ “rosy economic projections” don’t “fit reality.”
In the budget proposal marked up by House Republicans on the budget panel days back, the party touts measures they say would put $14 trillion toward reducing deficits over the next decade — but not without measures to cut spending that have already prompted pushback from Democrats.
Among some of the proposals Republicans outline in the plan include measures aimed at beefing up work requirements for Medicaid, while reducing annual government spending and targeting economic policies passed when Democrats last led both chambers of Congress.
“Republicans hide behind high-level talking points about balancing. Well, who are you hurting in the meantime?” Young said Monday.
Updated at 3:34 p.m.