Here’s the latest on the president’s priorities.
President Biden on Monday proposed a $7.3 trillion budget packed with tax hikes on corporations and high earners, new spending on social programs and a wide range of efforts to combat high consumer costs such as housing and college tuition.
The proposal includes only relatively minor changes from the budget plan Biden submitted last year that went nowhere in Congress, though it reiterates his call for lawmakers to spend about $100 billion to strengthen border security and supply of aid to Israel and Ukraine.
Most of the new spending and tax increases included in the 2025 budget again have almost no chance of becoming law this year as Republicans control the House and outright oppose Mr. Biden’s budget agenda. Last week, Republicans in the House of Representatives adopted a budget proposal outlining their priorities, which are far removed from what Democrats have asked for.
Instead, the document will serve as a draft of Mr. Biden’s policy platform as he seeks reelection in November, along with a series of contrasts intended to distinguish him from his presumptive Republican opponent, former President Donald J. Trump.
Mr. Biden has been trying to regain his strength on the economic front from voters who have given him low marks amid soaring inflation. This budget aims to portray him as a champion of greater government support for workers, parents, manufacturers, retirees and students, and of the fight against climate change.
In his introduction to the budget, the president emphasized his plans for additional spending programs — including those he has been unable to convince Congress to pass in years.
“For too many hardworking families, it costs too much to find a good home, so we are working to lower costs and increase the supply of housing across the country,” he wrote.
The budget, he added, “restores the child tax credit expansion I signed into law, which nearly cut child poverty in half by 2021; and it guarantees high-quality childcare to the vast majority of families for no more than $10 per day, while raising wages for childcare workers. It provides universal free preschool to all four million American four-year-olds.”
Mr. Biden proposes to more than offset these spending increases by imposing about $5 trillion in new taxes on corporations and the wealthy over the next decade. Administration officials said Monday that these increases would be split evenly between corporations and the nation’s highest earners, and that Americans making less than $400,000 a year would enjoy tax cuts totaling $750 billion less than the budget.
“We can make all our investments by asking those in the top 1 and 2 percent to pay more into the system,” Shalanda Young, the director of the White House Budget Office, told reporters.
The president is already trying to portray Trump as the opposite: a supporter of further tax cuts for corporations.
Polls show Americans are dissatisfied with Mr. Biden’s handling of the economy and favor Mr. Trump’s approach to economic issues. But Mr. Biden has been steadfast in his core economic policy strategy, and the budget is not expected to deviate from that plan.
White House officials said ahead of the budget release that Biden would propose about $3 trillion in new measures to reduce the budget deficit over the next decade. That’s in line with his budget proposal last year, which reduced deficits by raising taxes on corporations and the wealthy and having the government negotiate more aggressively with pharmaceutical companies to reduce spending on prescription drugs.
Mr. Biden will again call for an increase in the corporate tax rate from 21 percent to 28 percent, the level Trump set in the tax bill he signed in late 2017. Mr. Biden will also propose raising a new minimum tax on large corporations and quadrupling a tax on stock buybacks, among other efforts to raise more revenue from companies and individuals making more than $400,000 a year.
These cuts would build on the discretionary spending limits that Biden and Republicans in Congress agreed to last year to resolve an impasse over raising the nation’s borrowing limit. They would still leave the country with historically high budget deficits: an average of about $1.6 trillion a year over the next decade, according to government forecasts. As a share of the economy, deficits would decline over that time, but total government debt as a share of the economy would rise.
Republicans in the House of Representatives released a budget last week that aims to reduce deficits much faster – bringing the budget to a balanced position by the end of the decade. Their savings were based on economic growth forecasts well above the expectations of mainstream forecasters, along with steep and often unspecified budget cuts.
The nonpartisan Committee for a Responsible Federal Budget called the Republican plan “unrealistic in its assumptions and results.” On Monday, the group called Biden’s proposed deficit reduction “a welcome start, but too timid a start.”
Mr. Biden and his aides have repeatedly said they are confident the projected deficits in his budgets will not hurt the economy. Ms. Young and Jared Bernstein, chairman of the White House Council of Economic Advisers, reiterated that position Monday, even after acknowledging that the budget now projects higher government borrowing costs over the next decade than previous budgets.
Rather than focusing on more aggressive deficit reduction, as previous Democratic presidents have done after losing control of a chamber of Congress, Mr. Biden has focused on the need for new spending programs and targeted fiscal stimulus to boost growth and to stimulate the middle class.