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Biden releases $5.8 trillion budget plan for 2023

The president’s priorities include reducing the national deficit by taxing the wealthy, keeping defense spending strong and bulking up the nation’s public health infrastructure for future waves of the pandemic.

WASHINGTON (CN) — Offering several strategies to fight inflation and ambitious plans to reduce the nation’s deficit over the next 10 years with a tax on the rich, President Joe Biden released his $5.8 trillion budget plan for 2023 Monday.

“We’re reducing the size of the deficit, relative to our economy by almost two-thirds, reducing inflationary pressures and making real headway cleaning up the fiscal mess I inherited,” Biden said of his 158-page plan at a press conference Monday afternoon, putting former President Donald Trump on blast for tax cuts that he said added $2 trillion to U.S. deficit spending and largely helped the rich and the largest corporations.

By contrast, the Biden administration has maintained that it hopes to grow the economy from the bottom up and middle out. The president pledged Monday that the middle and lower class Americans wouldn’t see a tax increase from the federal government this year.

“Nobody making less than $400,000 a year will pay a penny more in federal taxes,” Biden said Monday.

Wealthier Americans will see increases, however. According to the White House, Biden’s addition of a proposed minimum 20% tax on American households netting more than $100 million per year — alongside a corporate tax hike, closing tax code loopholes and other measures — could reduce the deficit by more than $1 trillion in the next decade. 

Just in Biden’s first year as president, the administration said, the deficit has fallen by around $300 billion due to the implementation of the American Rescue Plan alongside other strategic measures Biden says has jump started the economy. Under the 2023 plan, “deficits under the Budget policies would fall to less than one-third of the 2020 level the President inherited,” the White House touted Monday.

The Biden administration noted also noted Monday that in the last year, more than 6.5 million jobs were created and gross domestic product, a measure of goods and services produced within the nation, grew by 5.7%. Also notably, the administration said, the unemployment rate dropped to 3.8%.

Biden’s 2023 plan notably does not list any specific requests for the president’s Build Back Better framework as Congress’ negotiations over Biden’s domestic proposal have been on pause since December when Democratic Senator Joe Manchin of West Virginia said he would not support the $2 trillion social and environmental legislation.

However, Office of Management and Budget Director Shalanda Young said on a press call Monday morning that the budget incorporates a reserve for Build Back Better.

“We’ve been clear that the President wants to sign legislation that cuts costs for families and reduces the deficit. But to be conservative, the budget reflects this reserve fund as deficit-neutral,” Young explained Monday, noting that this strategy is meant to allow Congress the room to do the work the President has asked.

The president also indicated as much Monday.

“It’s my hope that Congress enacts this law this year so I can sign it, and we can get to work,” he said, pressing that “passing legislation that lowers costs for families on things like child care, health care and energy costs” would jumpstart the economy and lower the deficit.

“At the same time, we give hard working parents raising children tax relief that gives them just a little bit of breathing room and lowers child poverty,” Biden continued. “We give Medicare the power to negotiate lower prescription drug prices. This will bring down the cost for seniors and reduce the deficit by hundreds of billions of dollars. Congress can do this this all right now.”

Amid Russia’s now month-long attack of Ukraine, Biden’s budget also earmarked $773 billion for defense spending, a number up slightly from last year. Roughly $1 billion will be used to provide additional assistance to Ukraine while $6.9 billion will go toward the European Defense Initiative, NATO and counteracting Russia’s attacks.

“This budget provides the resources we need to keep Americans safe, ensuring that our military remains the best prepared best trained best equipped military in the world,” Biden said Monday, noting that the U.S. is prioritizing investments in space and cyber security.

While Republicans have tried to attack the president for being soft on crime, the Biden administration also notably set aside strong funding for law enforcement in the budget, placing $30 billion aside for state and local law enforcement, crime prevention and community violence intervention programs.

“The answer is not to defund our police departments. It’s to fund our police and give them all the tools they need training,” Biden said Monday, noting that more funding will allow departments to better police their communities. He also set aside $1.7 billion for the Justice Department firearm trafficking strike forces.

Young noted Monday that the administration aims “to keep economic activity going through additional waves of the pandemic.” Biden’s budget aimed to bolster public health infrastructure in tun, giving $81.7 billion to the Department of Health and Human services over the next five years and $9.9 billion to the Centers for Disease Control and Prevention. Additionally, Biden earmarked $3.3 billion for clean energy projects as well as $18 billion for programs responding to climate change.

In addition to his proposed 20% tax on the wealthy, which will go before Congress, Biden proposed a corporate tax rate of 28%, up from 21% last year. The suggestions fall in line with Democrats’ pressure to tax the wealthy amid growing income inequality throughout the country but are likely to face turbulence among federal lawmakers.

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Categories / Economy, Financial, Government, National, Politics

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