: Biden set to release budget with defense boost, new tax on wealthy Americans
President Joe Biden is set Monday to send Congress his budget for fiscal 2023, laying out his policy priorities and kicking off the process of funding the federal government.
A boost for defense spending, a new tax on wealthy Americans and inflation forecasts will be among the key topics in focus.
Biden will request more than $813 billion in national security spending, a 4% increase from approved spending for the current fiscal year, according to Bloomberg News.
But lawmakers frequently ignore presidential budgets as they develop their own funding plans, and some Republicans are already pressing Biden to be more aggressive.
“We urge you to request a 5% increase over the inflation-adjusted FY22 enacted level,” wrote a group of 40 GOP members of Congress to Biden last week. Analysts at Beacon Policy Advisors said that Democratic hawks in competitive re-election races may join Republicans in pressing for more Pentagon spending.
Biden will also propose a new minimum tax of 20% on households worth more than $100 million, the White House said Saturday. More than half of the revenue would come from households worth more than $1 billion, according to the White House.
“The Billionaire Minimum Income Tax will ensure that the very wealthiest Americans pay a tax rate of at least 20% on their full income, including unrealized appreciation,” said a White House summary. “This minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters.”
Read more: Biden budget seeks minimum tax on households worth $100 million
The Beacon analysts also said the administration’s inflation assumptions will be a key figure to watch for.
“Too low an inflation estimate and it won’t be believable, but too high and it will become political ammunition for Republicans,” they wrote.
As MarketWatch reported, the rate of U.S. inflation rose again in February to 7.9% — a 40-year high. And Americans could face even more pain because of the Russian war on Ukraine. March figures will be reported on April 12.
Read more inflation coverage from MarketWatch.
Inflation is a key consideration in passing Biden’s domestic agenda, with the president’s “Build Back Better” proposal slamming into opposition from West Virginia Sen. Joe Manchin. Biden’s fellow Democrat has warned about major boosts to government spending during a period of high inflation.
The White House said that through the Billionaire Minimum Income Tax and other measures, Biden’s budget would reduce the deficit by $1 trillion over a decade.
The budget will also contain domestic-policy priorities, as Biden seeks to replace Build Back Better, which was aimed at climate and social spending.
While Biden’s budget proposal begins the congressional appropriations process, the government is funded through 12 spending bills that need to clear Congress and be signed into law by the president. Those bills can clear the House of Representatives along party lines, since Democrats control the majority. The Senate is a higher bar, however, as it is evenly split.