As Biden unveils his budget plan, where’s McCarthy’s alternative?
Facts
- On Thursday, US Pres. Joe Biden unveiled a $6.8T budget proposal for the 2024 fiscal year and proposed new taxes on the wealthy, which the White House said will reduce the federal deficit by nearly $3T and set a record for defense spending.[1]
- The budget for the fiscal year starting in October would see individuals earning more than $400k pay 39.6% income tax, up from 37%, while the federal capital gains tax would nearly double from 20% to 39.6% for those earning over $1M.[2]
- Biden’s plan would also implement a 25% minimum tax on Americans worth over $100M. Senate Democrats pushed for a similar plan in 2021 but didn't garner wide support within the party.[3]
- Biden is also asking Congress to approve an $842B defense budget — $26B more than 2023’s budget and nearly $100B more than two years ago. Congress added $40B to Biden’s 2023 proposal and could do so again.[4]
- The proposal comes as the US hit the debt ceiling earlier this year. The Treasury has been using extraordinary measures for the government to pay its bills, but it's estimated that the US could start defaulting on its obligations this summer if Congress doesn’t address the debt ceiling.[5]
- Biden’s proposal — delivered in the swing state of Pennsylvania — is not likely to pass the Republican-controlled House, with House Speaker Kevin McCarthy calling it inadequate.[6]
Spin
Democratic narrative
While undeniably ambitious, Biden’s plan is a credible spending package that would reduce the deficit and protect vital social insurance programs. Meanwhile, the GOP is holding the American economy hostage by refusing Democrats' proposals without presenting any of their own as an impending catastrophic default inches ever closer.
Republican narrative
Biden’s plan is not based in reality and is just a mechanism to raise taxes and grow the government. While the proposal would allegedly reduce the deficit by $3T over the next decade, it doesn't meaningfully cut spending to tackle the national debt, which the Congressional Budget Office projected will grow by more than $20T over the next 10 years.
