Documents obtained by The New York Times show that President Biden will propose a $6 trillion budget Friday that would bring U.S. federal spending to the highest level since World War II while running deficits of more than $1.3 trillion over the next 10 years.
President Biden’s first budget request calls for the federal government to spend $6 trillion in fiscal year 2022 and increase total spending to $8.2 trillion by 2031.
Budget Details Revealed
This spending increase is part of Biden’s two-part agenda to upgrade America’s infrastructure and significantly expand the Social Security net, which is contained in his American Jobs Initiative and American Family Plan, as well as other plans to increase discretionary spending.
The proposal demonstrates Biden’s determination to exercise government power to help more Americans live comfortably and to boost U.S. industry to better compete on a global scale.
Biden financed the move by raising taxes on corporations and high-income earners, a move that would begin to reduce the budget deficit in the 2030s. Administration officials have said spending on jobs and family programs would be fully covered by tax increases over the next 15 years, and the budget request supports that.
Under Biden’s proposal, the federal budget deficit would still reach $1.8 trillion in 2022 even if the economy recovers from the epidemic’s recession and grows at the fastest rate the Biden administration has projected since the early 1980s.
It will decline slightly over the next few years, growing again to nearly $1.6 trillion by 2031. Total debt held by the public will exceed the total value of GDP, rising to 117% of the size of GDP by 2031. By 2024, debt as a share of the economy would reach the highest level in U.S. history, surpassing World War II-era records.
The Biden plan’s level of taxes and spending would expand federal fiscal coverage to a level rarely seen in the postwar era, which includes funding for roads, water lines, broadband Internet, electric vehicle charging stations and advanced manufacturing research. It also proposes funding for child care, universal preschool, a national paid leave program and a host of other initiatives. Defense spending would also grow, although its share of the economy would decline.
But the documents show that Biden will not propose other major policies in his budget; for example, Biden has promised to reform and upgrade America’s unemployment insurance program as part of the Families USA program, but those promises are not included in his budget.
Will the budget be passed?
The budget is simply a request to Congress, which must approve federal spending. However, with Democrats controlling both houses of Congress, Biden’s agenda has the highest probability of passage of any presidency, especially if he can agree with lawmakers on part of his infrastructure agenda.
If Biden’s plan is implemented, the government would spend nearly a quarter of the total output of the U.S. economy in each of the next 10 years. Its tax revenues would equal one-fifth of the entire economy.
Biden’s budget shows that the administration is not concerned about rapid inflation in the economy, although recent data show prices rising rapidly as the economy reopens after a year of being subdued during the epidemic.
According to the Biden team’s forecast, consumer prices will never rise faster than 2.3 percent per year, and the Federal Reserve will only gradually raise interest rates from their current minimum level in the coming years.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/6-trillion-dollars-biden-mulls-huge-budget-two-pronged-approach-to-rebuilding-economy/
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