News
Biden’s budget proposal: Tax breaks for families, cheaper health care, more
MANCHESTER, N.H. (AP) — President Joe Biden released a budget proposal on Monday aimed at grabbing voters’ attention: It would offer tax breaks for families, lower health care costs, smaller deficits and higher taxes on the wealthy and corporations.
With little chance of passing the House and Senate to become law, the fiscal year 2025 proposal is an election-year blueprint for what the future might hold if Biden and enough of his fellow Democrats win in November. The president and his aides previewed parts of his budget that will go into effect last week. State of the Union Addressand they provided the details on Monday.
If Biden’s budget were to become law, deficits could be cut by $3 trillion over a decade. It would raise tax revenues by a total of $4.9 trillion over that period and use about $1.9 trillion to fund various programs, with the rest going toward deficit reduction.
The president traveled Monday to Manchester, New Hampshire, where he called on Congress to enforce his $2,000 cap on prescription drug costs and $35 on insulin for everyone, not just people on Medicare. He also advocated making permanent some protections in the Affordable Care Act that are set to expire next year.
“I’m here in New Hampshire to talk about the budget that I released today that I believe would help a lot,” Biden said.
Biden aides said his budget was realistic and detailed, while rival Republican measures were not financially viable.
“Congressional Republicans won’t say what they’re cutting, who they’re hurting,” said White House budget director Shalanda Young. “The president is transparent.”
House Speaker Mike Johnson, R-La., issued a joint statement with other Republican leaders calling Biden’s proposal a “stark reminder of this Administration’s insatiable appetite for reckless spending.”
“The Biden budget doesn’t just miss the mark — it’s a roadmap to accelerate America’s decline,” House Republican leaders said.
Under the proposal, the government would spend $7.3 trillion in the next fiscal year and borrow $1.8 trillion to cover the tax revenue shortfall. Biden’s 188-page plan covers a decade of spending, taxes and debt.
Parents could get an increased child tax credit in 2025, as payments briefly return to the 2021 level funded by Biden’s coronavirus relief package. Homebuyers could get a tax credit of up to $10,000, and the plan includes $10 billion in down payment assistance for first-generation buyers. Corporate taxes would increase, while billionaires would be hit with a 25% minimum tax.
Biden said in his State of the Union that Medicare should have the ability to negotiate prices on 500 prescription drugs, which could save $200 billion over 10 years. Aides said his budget does not specify how many drug prices would be subject to negotiation.
Biden’s plan would keep Medicare solvent permanently, according to aides, but as noted by Maya MacGuineas, president of the fiscal group Committee for a Responsible Federal Budget, it doesn’t appear to fix Social Security, which projections say will be unable to pay full benefits from 2033.
The proposal would provide about $900 billion for defense in fiscal year 2025, about $16 billion more than the baseline.
The Biden administration is still seeking money to help Ukraine defend against Russia and help Israel. His budget plan reiterates the request for supplementary financing made last October for Ukraine, Israel and humanitarian aid to the Palestinians.
It is also requesting funding to expand personnel and resources on the U.S. southern border. Still, military spending over 10 years would fall by $146 billion to $9.57 trillion.
A key theme in the budget plan is an effort to help families meet their basic needs, as the impact of inflation hits highest level in four decades in 2022 continues to leave many voters feeling like they are worse off under Biden.
The budget proposal includes $258 billion to help build or preserve 2 million homes, helping to address a nationwide shortage that has kept housing prices high. Parents earning less than $200,000 annually would have access to child care, with most eligible families paying no more than $10 a day.
It would eliminate origination fees on government student loans, potentially saving borrowers $1,000 over the life of their debt. It also includes $12 billion to help universities develop strategies to reduce their costs.
All of this is an opportunity for Biden to try to define the race on his terms, just as the almost certain Republican nominee, Donald Trump, wants to rally voters behind his agenda.
Trump, for his part, would like to raise tariffs and pump oil. He has called for a “second phase” of tax cuts, since parts of his 2017 overhaul of the income tax code were set to expire after 2025. The Republican has also said he would slash government regulations. He has also promised to pay down the national debt, though it is unclear how without him detailing severe spending cuts.
In an interview Monday with CNBC, Trump indicated he would be willing to cut spending on Social Security, Medicare and Medicaid, though he stopped short of offering a full policy.
“There’s a lot you can do in terms of entitlements, in terms of cuts,” Trump said.
The interview caught Biden’s attention, prompting him to tell the New Hampshire audience that cuts were off the table: “The bottom line is he’s still in it. I’m never going to let that happen.”
House Republicans voted on their own on Thursday budget resolution for the next fiscal year out of committee, saying it would cut deficits by $14 trillion over 10 years. But his measure would rely on upbeat economic forecasts and sharp spending cuts, slashing $8.7 trillion in spending on Medicare and Medicaid. Biden has vowed to halt any cuts to Medicare.
Meanwhile, Congress is still working on a budget for the current fiscal year. Biden signed into law a $460 billion package on Saturday to prevent the closure of several federal agencies, but lawmakers are only halfway through the process of addressing spending for this fiscal year.
___
Boak reported from Washington. Associated Press writer Colleen Long in Washington also contributed to this report.