Joe Biden's $6 trillion budget: Social spending, taxes on business

US President Joe Biden on Friday unveiled a $6 trillion budget for next year that's piled high with new safety net programs for the poor and middle class, but his generosity depends on taxing corporations and the wealthy to keep the nation's spiking debt from spiralling totally out of control.

Biden has already described, in general terms, major plans on infrastructure and he won a major victory on Covid-19 relief earlier this year. But Friday's rollout tallies up the costs and incorporates them into the government's existing budget framework, including Social Security and Medicare, to provide a fuller view of the administration's fiscal posture.

The whopping deficit projections reflect a government with steadily accumulating debt that has topped $28 trillion after well over $5 trillion in already approved Covid-19 relief, which would require the government to borrow roughly 50 cents of every dollar it spends this year and next.

With the government's structural deficit remaining unchecked, Biden would use proposed tax hikes on businesses and high-earning people to power huge new social programmes like universal prekindergarten, large subsidies for child care and guaranteed paid leave.

The best way to grow our economy is not from the top down, but from the bottom up and the middle out," Biden said in his written budget message. Our prosperity comes from the people who get up every day, work hard, raise their family, pay their taxes, serve their Nation, and volunteer in their communities.
 

The budget incorporates the administration's eight-year, $2.3 trillion infrastructure proposal and its $1.8 trillion American Families Plan and adds details on his $1.5 trillion request for annual operating expenditures for the Pentagon and domestic agencies.

Together, these ... will be transformational: Strengthening our economy, boosting American competitiveness, and delivering shared prosperity and economic security," said acting White House budget chief Shalanda Young.

She called the Biden plan a budget that puts these pieces together and does exactly what the president told the country he would do. Grow the economy, create jobs and do so responsibly by requiring the wealthiest Americans and big corporations to pay their fair share.

Biden's budget is sure to give Republicans fresh ammunition for their criticisms of the new Democratic administration as bent on a tax and spend" agenda that would damage the economy and impose a crushing debt burden on younger Americans. And he's facing a very nettlesome fight with Republicans who say he's shorting the military.

Veteran GOP Sen. Richard Shelby, whose help is needed to pass annual agency budget bills, blasted Biden's plan as a blueprint for the higher taxes, excessive spending, and disproportionate funding priorities." He added that it completely disregards our debt of more than $28 trillion, yet somehow still shortchanges our national security."
 

Biden is a veteran of a long-gone Washington that fought bitterly in the 1980s and 1990s to wrestle the deficit under control. But there hasn't been any real effort to stem the flow of red ink since a tea party-driven moment in 2011 that produced unpopular automatic spending cuts.

Huge deficits have yet to drive up interest rates as many fiscal hawks have feared, however, and genuine anti-deficit sentiment is difficult to find in either political party.

The unusual timing of the budget rollout the Friday afternoon before Memorial Day weekend indicates that the White House isn't eager to trumpet the bad deficit news. Typically, lawmakers host an immediate round of hearings on the budget, but those will have to wait until Congress returns from a weeklong recess.