Joe Biden's Billionaire Budget Plan to Regain
the US economy after the pandemic, the most ambitious
since World War II
The proposed budget would bring the United States to spending levels not seen since World War II.
US President Joe Biden unveiled his first budget plan, which includes spending of $ 6 trillion and a steep tax hike on the wealthiest Americans.
This project will also include new social programs and a notable increase in investment to fight climate change. However, to execute it, it must be approved by Congress, where Republican Senator Lindsey Graham said the plan was "ridiculously expensive."
According to the project, the country's debt would reach 117% of its Gross Domestic Product (GDP) by 2031, which would exceed the levels it had during World War II. And that, despite the proposal to raise close to US $ 3 trillion by increasing taxes on profits, corporations and the most wealthy citizens of the country.
Former Republican President Donald Trump also increased the deficit each year he was in power (2017-2021) and his latest budget proposal was approaching $ 4.8 trillion.
Biden's plan includes spending US $ 1.5 billion for Pentagon operations and other government departments, in addition to two programs that had already been announced: the job reactivation program, which would cost about US $ 2.3 billion, and that of support to families that contemplates expenses close to US $ 1.4 trillion. Biden, who belongs to the Democratic party, has said that his budget "invests directly in the American people" and will serve to "strengthen the nation's economy and improve our financial health in the long term."
What does the plan have?
The White House explained that the proposal will help the economy grow from the perspective of the poorest and the middle class.
The budget includes:
· More than US $ 800 billion for the fight against climate change, where a large investment in renewable energy is contemplated.
· US $ 200 billion to guarantee free school seats for 3- and 4-year-olds.
· US $ 109 billion to finance two years of free education in community higher education centers in the United States.
· US $ 225 billion for the paid family and medical leave program, which would put the US on the same level as the richest nations.
· US $ 115 billion for highway and bridge infrastructure and about US $ 160 billion for public transportation and railways.
· US $ 100 billion to improve internet access in every US home.
The plan also has a notable omission: the Hyde Amendment, a federal rule that says public money cannot fund abortions in the US except in cases of incest or rape. Biden is the first president to exclude this amendment from his budget plan, a decision that has been applauded by the most progressive. For years he, a devout Catholic, had supported the amendment, but during the presidential campaign he showed a change of heart. This idea will have a winding path in the Senate, where even members of his party will join Republican senators to get the rule included and remain unchanged.
What about inflation and the deficit?
The main economic adviser to the White House, Cecelia Rouse, accepted that inflation will increase in the coming months, but that it will stabilize at an annual rate close to 2%.
Some economists - including Larry Summers, who was the adviser to former Presidents Barack Obama and Bill Clinton - have warned that spending of this nature could increase inflation, leading the Federal Reserve to raise taxes, ultimately it would leave the country at risk of falling into a recession.
Biden's budget is estimated to add an additional $ 14.5 billion to US debt over the next decade. But the White House has indicated that that debt would be paid with the fiscal increases in the next 15 years.
Critics are skeptical of such projections with a happy ending that would come long after Biden ends his presidential term.
Many Republicans have been alarmed by the record spending the plan proposes. Senate Minority Leader Mitch McConnell said the plan was "a socialist dream." And Senator Jerry Moran said this bill "is going to put a huge debt on the shoulders of future generations."
Biden's big dream of government
The era of "Big Government" - the idea of big federal investment spending - is back. That is, if Joe Biden has his way.
In 1996, Bill Clinton called "Big Government" a thing of the past, when the former Democratic president agreed to Republican efforts in Congress to cut welfare benefits and other federal funds. In the two decades since the September 11 attacks, following a major recession - the 2008 financial crisis - and a global pandemic, American support for government activism has returned and Biden, long considered a centrist politician, proposes a budget that reflects that.
There are no massive government proposals in Biden's budget: no publicly run health insurance and no free-for-all college. However, his administration increases spending for numerous social programs, with a focus on health and education. The Biden plan anticipates massive deficits, more than $ 1 billion a year, which will lead to condemnation from fiscal radicals on both the left and the right. And Republicans are going to scrutinize the articles and analyze the specific expenditures.
However, presidential budgets are open and rarely resemble what Congress ultimately passes. What Biden's proposal says is that he wants to keep the government's spending taps open and believes that the American people will back him.
It will happen?
Congress has until the end of September to pass a new spending law. If it is not approved, the government could enter a kind of "partial blackout". Democrats have a narrow majority in the House of Representatives and just a one-seat lead in the Senate.
Unlike what happens with most laws, budgets can advance with 51 votes in favor (the Senate is made up of 100 seats) and not with the 60 that are often needed for other regulations. This means that the budget law could pass without needing Republican support.
Republicans have already criticized Biden for his spending plans, including the $ 1.9 trillion that was approved for financial relief due to the coronavirus pandemic. But ensuring that all Democrats support the law will not be easy. Although the vast majority agree with the spending initiatives, there are some controversial points.
For example, the increase in the defense budget, which could cause resentment among the more progressive members of Biden's party.