Biden wants to reduce the budget deficit by 2.9 billion in the next ten years. USD

Biden wants to reduce the budget deficit by 2.9 billion in the next ten years. USD

Biden wants to reduce the budget deficit by 2.9 billion USD

Illustration photo – US President Joe Biden. 3 Mar 2023.

Philadelphia – US President Joe Biden presented his budget plan, which should reduce the deficit by USD 2.9 trillion (CZK 64.7 trillion) over the next decade. That's a higher target than he promised in his speech last month, when he said he planned to cut the deficit by $2 trillion. The plan mainly envisages higher taxes for the rich. However, it is already clear that the Republicans will reject the proposal. The Kyódó agency warned that the total budget deficit for the ten years to fiscal year 2033 should be USD 17.05 trillion.

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Overall, the budget proposal expects $4.7 trillion in additional tax revenue and $800 billion in savings from changes in government programs. But Biden is also calling for $2.6 trillion in new spending.

In the next fiscal year, which begins Oct. 1, the Biden administration wants to increase budget spending by eight percent to $6.88 trillion. Defense spending is set to rise 3.3 percent to $886 billion. Revenues are expected to be $5.04 trillion. This would increase the deficit to $1.85 trillion from $1.57 trillion.

Biden's proposal faces stiff opposition in Congress this year as Republicans won control of the House of Representatives in November's elections. A large part of the proposals from the budget plan will probably not be accepted.

Biden's 10-year budget plan revolves largely around the idea of ​​taxing the wealthy to help fund programs for the middle class, the elderly and families. Biden often talks about companies and the wealthy having to pay their fair share.

The tax hikes include the reversal of some of the 2017 tax cuts passed by then-President Donald Trump because lower taxes did not produce the growth Trump had promised. Biden proposes new taxes on billionaires and an increase in the corporate tax rate and tax on the foreign profits of US multinationals. It also wants to raise the top marginal tax rate on incomes above $400,000 and eliminate the preferential rate on capital gains income for households with incomes above $1 million.

The proposal also includes $2.6 trillion in new spending, including restoration expanded child tax credits to $3,600 per child from the current $2,000.

At a time of heightened tensions with Russia and China, the draft budget anticipates a decline in military spending relative to the performance of the American economy over the next ten years. However, federal spending is expected to account for roughly a quarter of economic output due to higher spending on social security and health insurance. This effectively keeps the size of government the same as it is now.

Republicans are demanding severe spending cuts in exchange for lifting the statutory limit on government borrowing. So far, however, they have no counter-proposal to the plan put forward by Biden, and all they say is that they will reject the plan to raise taxes on the wealthy. The plan could be one of the main policy points of Biden's potential presidential campaign for re-election in 2024. But Biden has not yet confirmed whether he will seek re-election. deficit is insufficient. He called for the U.S. government to follow a balanced budget path.

“Republicans in Congress keep saying they want to reduce the deficit, but they haven't put forward any comprehensive plan that shows what they're going to reduce,” said the director of the Office of management and budget Shalanda Young. “We look forward to seeing their budget so that the American people can compare it to what we are putting forward today.”