The $6 trillion budget proposed by President Joe Biden on Friday gives a fuller fiscal picture than an April preview, in which he laid out …
The $6 trillion budget proposed by President Joe Biden on Friday gives a fuller fiscal picture than an April preview, in which he laid out his spending priorities. The plan details taxes and spending for the fiscal year that begins in October. But a 10-year outlook also incorporates the multi-year spending on infrastructure, education, child care and other domestic programs proposed through what Biden has called is American Jobs and American Families plans. It’s up to Congress, which is narrowly controlled by Democrats, to decide what gets implemented. Here’s a look at some of the highlights: The budget projects the federal debt would increase, relative to the size of the economy, to a higher level than during World War II. That will give Republicans more fodder for their attacks on Biden’s « tax and spend » agenda. During the World War II era, debt peaked at 106% of gross domestic product in 1946. Under Biden’s plan, debt is projected to rise to 117% of the size of the economy by 2031. Without changes, it’s expected to grow to 113% of GDP. The administration argues that the level of interest payments, rather than the size of the debt, is the most relevant benchmark for whether debt is burdening the economy. The government’s annual interest payments after adjusting for inflation would remain well below the historic average throughout the next decade, according to the White House. America Talks The government would spend $1.8 trillion more than it’s projected to take in next year. But by 2031, the deficit would decline, relative to the size of the economy, to a smaller share than it would be without Biden’s changes. That’s in part because Biden has proposed paying for some of his ambitious agenda through higher taxes on corporations and the wealthiest households. But the president’s plan does not address the structural deficit that existed before the pandemic. That imbalance is driven by an aging population, rising health care costs, compounding interest – and the lack of sufficient tax revenues to keep up.
