Biden Plan Fails to Address U.S. Fiscal Woes, Budget Group Says
Biden's plan would lead to "record" debts now but would improve the long-term budget outlook, according to the Committee for a Responsible Federal Budget.
President Joe Biden’s Fiscal Year 2022 budget, released Friday, which lays out his tax and spending agenda over the next decade, takes “too long to pay for his initiatives and does little to address our high and rising debt, lower health care costs, or secure major trust funds [like Social Security] headed toward insolvency,” according to Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
In releasing his plan to Congress, Biden stated that his budget “lays out the essential investments that my administration has proposed through the American Jobs Plan and the American Families Plan.”
The budget “both reflects and offers more details” on Biden’s American Jobs Plan, American Families Plan, and discretionary spending plans, the Committee said Friday in a statement.
The budget, according to the Committee, “proposes roughly $5 trillion of new initiatives, partially offset by almost $3.6 trillion of tax increases and $214 billion of spending reductions. With $163 billion of new interest costs, the budget would add $1.4 trillion to the debt by 2031.”
As the Greenbook laying out Biden’s tax plans states, the American Jobs Plan raises the corporate income tax rate to 28%, increases the capital gains rate to 39.6% from 20% for those earning $1 million or more, and taxes carried interest as ordinary income.
While Biden’s budget “offers an important blueprint for how he plans to move to a significantly larger and more investment- and child-oriented federal budget and how he will finance these new costs,” MacGuineas said, it “proposes $5 trillion of spending and tax breaks and only pays for three-quarters of the cost, leaving nearly $1.4 trillion of higher debt. Debt under the budget would hit new records almost every year.”
To his credit, MacGuineas continued, Biden’s budget proposals “would begin to reduce deficits by the end of the decade and would improve the long-term budget outlook by financing temporary spending with a permanent boost in revenue. The President is absolutely right: more tax revenue will be needed to finance the rising costs of our nation’s health and retirement programs. But spending reforms will need to be part of the equation as well, and much more needs to be done.”
Labor Secretary Marty Walsh said Friday in a statement that Biden’s budget would “make overdue improvements” to the unemployment insurance system “by providing the first comprehensive update in decades to the formula that funds states’ UI administration, helping to better equip states to handle higher volumes of claims and to be better prepared for future crises.”
The budget, Walsh added, “also requests $100 million to support the development and deployment of IT solutions in states to ensure timely and equitable delivery of UI benefits.”
Pictured: President Joe Biden. (Photo: Bloomberg)
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