WASHINGTON: President Joe Biden has proposed a $6 trillion budget to “reimagine” the US economy and stave off Chinese competition, though driving the United States into record debt and with Congress first needing to give approval.
Announcing the proposed spending, Biden said the post-pandemic United States “cannot afford to simply return to the way things were before.” “We must seize the moment to reimagine and rebuild a new American economy,” he said.
The president’s annual budget is more a wish list or a message on his priorities than anything else. Congress ultimately decides what money goes where, and the current Congress has only the narrowest Democratic majority.
Congressman Kevin McCarthy, leader of the Republican minority in the House of Representatives, called it “the most reckless and irresponsible budget proposal in my lifetime.”
Even some of Biden’s supporters warn that an economy already set to roar back from the COVID-19 shutdown risks getting swept up into an inflationary spiral.
The massive plan signals the White House’s determination to put hard numbers on Biden’s campaign to rethink the relationship between government and business in what he says is an existential contest with China.
Under the Biden blueprint, the federal spigot would unleash $6.011 trillion in 2022, with increases gradually rising to $8.2 trillion in 2031. Debt as a percentage of annual GDP would be expected to quickly surpass the level seen at the end of World War II.
The preisdent made clear where the lion’s share of that expected $6 trillion price tag should go. One huge chunk would be an infrastructure bill originally proposed at $2.3 trillion but since whittled down to $1.7 trillion in negotiations with Congress.
Another $1.8 trillion would go on increased state-funded education and social services — all, Biden argues, part of building a better 21st century workforce.
Biden said the overall aim is to grow the US middle class, while positioning “the United States to out-compete our rivals.” The budget proposal is being unveiled just ahead of the long Memorial Day weekend and with Congress heading out on a week’s recess.
Republicans are unanimous in opposing Biden’s broad definition of infrastructure to include green energy and social programs. Biden wants to raise money by ending a corporate tax cut Republicans passed under his predecessor Donald Trump. He also wants to go aggressively after tax loopholes used by the ultra-wealthy and large corporations.
Republicans refuse to accept this and say their own, more modest, infrastructure spending plans could be paid for by reallocating unspent money already budgeted. “President Biden’s proposal would drown American families in debt, deficits, and inflation,” the senior Republican senator, Mitch McConnell, said.
Despite the standoff and the sheer scale of Biden’s mega budget, the White House still has a potential ace up its sleeve in that slim Democratic majority.
Biden needs at least 10 Republicans to cross over in the evenly split Senate, a tall order at the best of times. However, if Democrats remain unanimous — which is also not guaranteed — they may be able to pass the budget through a fast-track procedure known as reconciliation.
