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President Joe Biden on Thursday is expected to use his budget proposal to score political points with his base rather than seriously engage in negotiations with Republicans about government finances as the U.S. nears the legal limit on borrowing.
House Republicans have called for significant cuts to federal spending in exchange for lifting or suspending the debt ceiling. Senator Joe Manchin, the Democratic Senator from West Virginia, has criticized his party for refusing to cooperate with Republicans on “reasonable and responsible” budget cuts.
Biden’s package of tax hikes and spending increases is unlikely to pass either the Republican-controlled House or the Democrat-controlled Senate—something the White House is well aware of. Instead, it is meant to signal Democrat priorities.
“We see this as a value statement,” White House press secretary Karine Jean-Pierre said Wednesday.
Biden’s budget will include a 5.2 percent raise for federal workers, according to reports.
The Associated Press reports:
Biden will unveil his spending plan in the battleground state of Pennsylvania, staking out what he believes is popular terrain that will make it hard for Republicans to criticize without risking blowback. Biden wants to impose tax hikes on the wealthy to limit federal borrowing, including a reversal of the 2017 tax cuts made by then President Donald Trump on people earning above $400,000. The added revenues would help to improve Medicare, the government health insurance program for adults over 65.
In the run-up to the plan’s release, Biden has floated a new tax on incomes above $100 million that would target billionaires. He’s called for lower prescription drug prices. The tax that companies pay on stock buybacks would be quadrupled, and those earning above $400,000 would pay an additional Medicare tax that would help to keep the program solvent beyond the year 2050.
Biden’s budget would seek to close the “carried interest” loophole that allows wealthy hedge fund managers and others to pay their taxes at a lower rate, and prevent billionaires from being able to set aside large amounts of their holdings in tax-favored retirement accounts, according to an administration official.
