- Proposal outlines Biden’s priorities as Congress prepares to negotiate budget…
- Would be the highest sustained level of spending since World War II…
- Federal debt to hit record-high…
President Joe Biden unveiled a massive budget proposal for fiscal year 2022.
The White House Office of Management and Budget released the budget proposal today. You can read it here.
It’s the largest federal spending plan proposed by any president in history and comes amid an already surging federal deficit.
Under Biden’s proposal, total federal spending would rise to $8.2 trillion by 2031.
Breaking Down the Spending Plan
The Biden administration’s budget proposal serves as a blueprint for Congress on what the President’s priorities are as they negotiate the final spending bill to be passed later this year.
The plan is being praised by Democrats and slammed by Republicans as the two parties disagree on big government spending.
The White House says the proposal is focused on boosting the American middle class and improving the country’s infrastructure.
Those two plans include $200 billion over 10 years to provide free preschool to Americans and $109 billion for two years of free community college.
They also include $225 billion of funding to subsidize child care for all children under 5-years-old and $225 billion over the next decade to create a national family and medical leave program.
But the traditional and so-called “human infrastructure” plans are already facing fierce pushback from Republicans with heated negotiations underway to come to a compromise on infrastructure.
OMB spokesman Robert Freidlander said the proposal would also fund “the president’s proposals to reinvest in research, education, clean energy, public health, and other critical priorities.”
Biden’s plan calls to expand funding for Title I, which is a federal program for schools with large concentrations of low-income students.
The White House budget outline includes $36.5 billion for the program, up from the current $20 billion.
The administration says that additional funding would be used to pay teachers more, expand access to preschool, and decrease inequities in U.S. education.
Notably absent from the budget proposal is funding for student loan forgiveness.
President Biden endorsed student loan forgiveness on the campaign trail but has tightened his support since taking office.
The President has told Democrats he will only support up to $10,000 of forgiveness for student loans and he wants Congress to draft the bill separate from the budget.
Discretionary spending under the plan would rise by 8.4%, or $118 billion, from the $1.4 trillion authorized by Congress last year.
Nondefense spending would jump 16% to $769.4 billion while defense spending would increase 1.7% to $753 billion.
The defense spending figure is higher than what progressives have pushed for and lower than what Republicans have called for in the past
Future of the Spending Proposal in Congress
Although Biden made his priorities clear in today’s proposal, Congress has the ultimate say on the final budget bill.
With Democrats controlling both the House and Senate, Biden’s priorities face strong odds of being approved.
But Democrats will likely need to give to Republicans on several issues to pass the 12 appropriations bills to fund the government.
GOP lawmakers have already balked at the sheer size of the President’s proposal which would be the nation’s highest sustained level of spending since World War II.
Chairman of the National Republican Senatorial Committee, Florida Senator Rick Scott, said, “It’s so typical of Democrats to think that they can tax and spend their way to success, but that could not be further from the truth. Joe Biden isn’t proposing a budget – he’s proposing a plan to bankrupt America.”
But Democrats say now is the right time to make large up-front investments with interest rates at record lows.
Senior Adviser to the President, Mike Donilon, said, “The American people understand that the economy we had before the pandemic left far too many people behind and that more and more families were finding that their grip on a middle-class life — and the security it affords — was precarious. They know we can’t afford to simply turn the clock back to where we were.”
The proposal comes as the federal deficit has surged to a record high after Congress passed six stimulus packages amid the pandemic.
The Treasury Department reported the U.S. government had a $226 billion budget deficit in April with the deficit hitting a record $1.932 trillion for the first seven months of fiscal 2021.
But even as the economy is expected to bounce back strong from COVID-19, Biden’s budget proposal would keep the deficit at record levels.
Under the proposal, the federal deficit would be $1.8 trillion in 2022 and by 2031 it would be nearly $1.6 trillion.
The $5.1 trillion in additional spending proposed by the White House over the next decade would push federal spending to about 25% of U.S. GDP.
During that same time, tax revenues would rise by $3.6 trillion and would be nearly 20% of GDP.
That equates to a net deficit of $1.4 trillion over the next 10 years and the Biden Administration says the deficit would begin to shrink in 2030.
Total government debt would rise to 117% of the size of the economy in 2031, officially exceeding the previous record set during World War II in 2024.
Congress has until the end of September to pass an omnibus package to fund the government in fiscal 2021.
It’s unclear how closely the final budget bill will align with Biden’s proposal, but today’s plan kicks off the negotiation process.
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