President Joe Biden’s upcoming budget proposal aims to cut deficits by nearly $3 trillion over the next decade, the White House’s chief spokesperson said Wednesday.
That deficit reduction goal is significantly higher than the $2 trillion that Biden had promised in his State of the Union address last month. It also is a sharp contrast with House Republicans, who have called for a path to a balanced budget but have yet to offer a blueprint.
White House press secretary Karine Jean-Pierre said at a briefing that the nearly $3 trillion figure is “nearly a $6 trillion difference between the president’s budget and congressional Republicans’ agenda, which would add $3 trillion to the debt.”
The White House has consistently called into question Republicans’ commitment to what it considers a sustainable federal budget. Administration officials have noted that the various tax plans and other policies previously backed by GOP lawmakers would add more than $2.7 trillion to the national debt over 10 years.
“President Biden took office after his predecessor signed a reckless and unpaid tax handout for the wealthy and large corporations which added nearly $2 trillion to the deficit,” Jean-Pierre said Wednesday. “He also inherited a poorly managed pandemic response. The president has taken a different, responsible approach. Thanks to his unprecedented vaccination program and economic recovery, the deficit fell by $1.2 trillion in the first two years of the Biden-Harris administration. And the president’s Inflation Reduction Act will reduce the deficit by more than $200 billion over the next decade.”
Biden is set to discuss his budget proposal on Thursday in Philadelphia. News of the roughly $3 trillion figure was first reported by The Associated Press.
“Building on that record of fiscal responsibility, the president’ budgets cuts the deficit again by nearly $3 trillion over the next decade,” she added. “The budget achieves this while lowering costs for families, investing in America and protecting programs Americans have paid into – because it proposes tax reforms to ensure the wealthy and large corporations pay their fair share while cutting wasteful spending on special interest interests, like Big Oil and Big Pharma.”
“That’s a stark contrast to congressional GOP proposals, which again, add $3 trillion to the deficit over 10 years with handouts to the rich, big corporations and special interest groups,” she added.
It’s a delicate time with the U.S. economy on edge because of high inflation and a looming standoff over the country’s borrowing power.
The country reached the $31.4 trillion debt limit in January. Treasury Secretary Janet Yellen said that her department has employed “extraordinary measures” in order to allow the country to continue paying its bills. Experts appear split on how long those measures will last. The Bipartisan Policy Center predicted the U.S. could face default as soon as early June, while the nonpartisan Congressional Budget Office estimates those measures will expire at some point between July and September.
President Biden has insisted that lawmakers lift the debt ceiling without conditions, but House Speaker Kevin McCarthy, R-Calif., and his newly empowered GOP House majority are calling for spending cuts in order to increase the country’s borrowing power.
In an interview with Spectrum News on Tuesday, Senate Minority Leader Mitch McConnell, R-Ky., expressed confidence that the United States will avert a first-ever default on its obligations.
“Everybody knows from the beginning you’re not going to default,” McConnell said in an interview with Spectrum News on Tuesday. “It’s simply unacceptable, it’s not going to happen. The Speaker said that as well.”
In testimony to the Senate Banking Committee on Tuesday, Mark Zandi, Chief Economist of Moody’s Analytics, warned that a default would be “catastrophic” for the economy – with even a brief default potentially resulting in a million jobs lost and a “mild” recession.
“A default would be a catastrophic blow to the already fragile economy,” Zandi said in his prepared remarks to the panel. “Global financial markets and the economy would be upended, and even if resolved quickly, Americans would likely pay for this default for generations, as global investors would rightly believe that the federal government’s finances have been politicized and that a time may come when they would not be paid what they are owed when owed it.”
Biden has suggested that tax increases on the earnings and holdings of the country’s wealthiest households can bolster government finances and also improve Medicare and Social Security.
The president contended in a Monday speech that there are 680 billionaires in the United States and that many of them pay taxes at a lower rate than do families who think of themselves as being in the middle class. Biden said not to hold him to the precise number of billionaires, but that they could afford to pay more for the good of the country.
“No billionaire should be paying a lower tax rate than a fire fighter — nobody,” Biden said at a gathering of the International Association of Fire Fighters.
