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“President Joe Biden on Thursday unveiled plans for government spending and higher taxes on the wealthy… The president seeks to fund higher spending and narrowing the deficit by imposing a 25% minimum tax on billionaires and nearly doubling the capital gains tax from 20%, the White House said.” Reuters
The right is critical of the plan, arguing that it would drastically increase both taxes and government spending.
“Inflation-adjusted federal revenues have already soared to $1 trillion above pre-pandemic levels, to their second-highest share of the economy since World War II. Yet the president would raise taxes by an additional $5 trillion over the decade — the largest tax hike since the 1960s. Total revenues would approach 20% of the economy, and income-tax revenues would average 10% of the economy over the decade…
“One could defend steep tax increases if accompanied by equal spending savings as part of a balanced plan to combat Washington’s trillion-dollar deficits. Instead, $2 trillion of these new taxes would go towards new spending initiatives — on top of the $5 trillion in new spending Biden has already enacted. Inflation-adjusted spending, which was $5 trillion before the pandemic, would nearly reach $7 trillion next year — or $51,000 per household…
“Even with $5 trillion in tax hikes bringing the highest sustained tax burden America has ever seen, the public-held national debt would still jump from $25 trillion to $44 trillion according to the president’s own figures… Simply paying the interest on the national debt would cost taxpayers $10 trillion over the decade — more than any program besides Social Security and Medicare.”
Brian Riedl, New York Post
“Though the budget claims $3 trillion of deficit savings, that is only when measured against the budget that was already inflated by his first two years in office… In February 2021, when Biden was sworn in, CBO projected deficits of $14.5 trillion from 2021 to 2031. As I noted last month, CBO now projects deficits of $20.5 trillion over that same time period. If adopted, the Biden budget would bring that number down to $18.9 trillion, according to White House estimates. In other words, deficits would still be $4.4 trillion higher than what was anticipated when he took office.”
Philip Klein, National Review
“The White House is touting President Biden’s U.S. military budget for fiscal 2024 as a record, and Mr. Biden is betting busy Americans won’t look past the headlines…
“The Pentagon’s budget request may seem large at $842 billion. But the figure is only a 3.2% increase over last year, and with inflation at 6% it means a decline in buying power. Compare the 3.2% growth with the double-digit increases for domestic accounts: 19% for the Environmental Protection Agency; 13.6% for both the Education and Energy Departments; 11.5% for Health and Human Services…
“For all the talk about a bloated Pentagon, defense in 2022 was only about 13% of the federal budget. It’s about 3% of GDP, down from 5% to 6% during the Cold War, even though America’s challenges today are arguably more numerous and acute. China is building a world-class military to drive America out of the Pacific. Russia is committed to grinding down Ukraine… Hypersonics and missiles threaten the U.S. homeland.”
Editorial Board, Wall Street Journal
The left supports the plan, arguing that in order to preserve Social Security and Medicare, tax increases on the wealthy are necessary.
The left supports the plan, arguing that in order to preserve Social Security and Medicare, tax increases on the wealthy are necessary.
“The White House knows it’s at a disadvantage in voters’ minds when it comes to the economy. Polls typically show voters trust Republicans more on economic issues. But Medicare and Social Security are both extremely popular with voters, as are higher taxes on the rich and wealthy… The White House is trying to position Democrats as the more fiscally responsible party, with priorities that match the public’s.”
Rachel M. Cohen, Vox
“[Republicans] claim to believe that rising federal debt is a major crisis. But if they really believed that, they’d be willing to accept at least some pain — accept some policies they dislike, take on popular spending programs — in the name of deficit reduction. They aren’t. The Vought proposal [released by Trump’s budget director] calls for preserving the Trump tax cuts in full, while also avoiding any politically risky cuts in defense, Social Security or Medicare. Yet it also claims to balance the budget, which is basically impossible under these constraints…
“In fact, even with savage cuts to Medicaid and drastically reduced funding for the basic functions of government, Vought is able to claim an eventually balanced budget only by promising that tax cuts and deregulation will cause a big rise in the economy’s growth rate. Tax cutters often make such claims; they never, and I mean never, deliver on their promises… [By contrast] the economic projections underlying [Biden’s] budget are reasonable, not very different from those of the Congressional Budget Office.”
Paul Krugman, New York Times
“There’s good reason [House Speaker Kevin McCarthy] and many of his allies have tried to punt the cuts to Biden: If they don’t touch Social Security and Medicare, which would be an act of political self-sabotage to cut, their calls to quickly balance the budget aren’t really feasible. Some in the GOP have left the door open to some defense spending cuts, but those suggestions have mostly been vague… [Biden] may see this as a way to force Republicans’ hand: ‘Show me your budget,’ as the president said in January, ‘and I’ll show you mine.’”
Eric Lutz, Vanity Fair
“What almost no lawmaker wants to admit is that Democrats and Republicans share responsibility for the bulk of the debt. Instead, they point fingers. Mr. Biden blasts former president Donald Trump for running up the debt with big tax cuts that weren’t paid for. That leaves out the inconvenient fact that he, too, added substantially to the debt with extra pandemic aid…
“Republicans falsely claim that the nation’s budget situation would be fine if it just cut back on welfare, waste and foreign aid. Democrats are equally misleading when they suggest it will take raising taxes on big businesses and the rich and perhaps shaving a bit off defense to get where we need to be… [Biden] deserves credit for offering some cuts and revenue raisers, but his plan underscores the reality that getting anywhere close to what’s needed over the next decade will take heroic political efforts.”
Editorial Board, Washington Post
A libertarian's take
“Biden's budget acknowledges that the government can't keep borrowing as recklessly as it has for the past few years, and should try to pay for the things it spends money on. That's a welcome development but one that might ignore the actual problem: the spending itself…
“Indeed, the federal government doesn't have a revenue problem at all. Federal tax collections hit an all-time high of $4.9 trillion last year. As a share of the overall size of the economy—a measurement not affected by inflation—tax collections hit 19.6 percent last year. That's the highest level since 2000, the fourth-highest total since World War II, and well above the average post-war rate of about 17 percent. The problem, of course, is that spending continues to outpace revenue by a wide margin.”
Eric Boehm, Reason
