Biden throws down 2024 glove on populist budget

PHILADELPHIA — President Joe Biden on Thursday presented his re-election in 2024 on the U.S. economy, with a proposed budget that imposes new taxes on the wealthy while announcing support for working-class Americans.

“My budget reflects what we can do to ease the burden on hard-working Americans,” Biden said in a speech at a Philadelphia union hall. “My budget plan will give people a chance.”

The details released by the White House threw down the gauntlet to Republicans as the president builds on an expected re-election campaign announcement.

Republicans in Congress are sure to block most of Biden’s proposals, arguing that spending cuts, not tax increases, are the solution to dealing with the nation’s skyrocketing debt.

However, they are now under pressure to explain where they would reduce spending. The Democrats, meanwhile, are trying to conquer the populist upper class by posing as the party of ordinary Americans.

“Too many people have been left behind and treated as if they were invisible. No longer. I promise you, I see you,” Biden said, addressing working-class voters in language reminiscent of his Republican predecessor, Donald Trump.

Key points in Biden’s budget proposal include a commitment to reduce the federal deficit by $3 trillion over the next decade.

Among the measures to achieve this is a tax of at least 25 percent on the wealthiest 0.01 percent of Americans.

“No billionaire should pay lower taxes than someone who works as a school teacher or a firefighter,” Biden said.

A key change would be raising the corporate tax rate to 28 percent, reversing a huge tax cut enacted under Trump in 2017, the White House said. Trump brought in a rate of 21 percent, up from 35 percent, but the effective rate companies actually pay is currently less than 10 percent, according to the government.

Biden also proposes raising taxes on those earning more than $400,000 a year to ensure Medicare — the hugely popular but increasingly strained state health insurance system for people over 65 — remains solvent.

Raising the Medicare tax from 3.8 percent to 5.0 percent for these wealthy individuals would ensure the program’s viability for more than two decades, the White House says.

– populist pitch –

Most of Biden’s proposed budget is essentially an opening shot for difficult negotiations in Congress, where Republicans have a slim majority in the House of Representatives and Democrats have little leverage in the Senate.

It’s the “beginning of a healthy dialogue,” said Shalanda Young, director of the Office of Management and Budget.

Republicans have declined to vote for tax increases, saying Biden is pursuing runaway spending and anti-business policies.

“President Biden has presented a budget proposal that is wasteful, frivolous and behind schedule,” Republican Senator Bill Hagerty said.

Earlier this week, Senate Republican leader Mitch McConnell vowed that “massive tax hikes, more spending… will not see the light of day.”

Biden’s move, however, is that by devising a deficit-reduction plan funded by the very wealthy, he can be financially responsible while engaging with middle-class voters.

One point Republicans will have a harder time arguing with is a call for record defense spending of $842 billion in 2024, a 3.2 percent increase.

And the battle of the narratives is put to a very real test within months.

The US Treasury is practically running out of money for this year after exhausting the previously approved $31.4 trillion credit limit. Congress urgently needs to approve additional debt or risk throwing the world’s largest economy into serious tension — and a possible debt default.

That doomsday scenario could happen as early as July, the Congressional Budget Office said in February.

Republicans say the ever-growing national debt points to the need to cut spending, but Democrats say Republicans are using the issue to weaken Medicare and other long-loved programs while protecting the wealthy from taxes.

Biden said he’s ready to negotiate, but wants to see House Speaker Kevin McCarthy’s version of the Republican budget first.

“I’m willing to meet with the speaker anytime – tomorrow, if he has his budget,” he said.