Biden challenges Republicans with budget that raises taxes on rich, sets up 2024 run

Speaking at a Philadelphia union hall, the Democratic president will highlight plans to cut, though not eliminate, the nation's deficit by nearly $3 trillion over 10 years by raising taxes on those earning more than $400,000 a year and ending some corporate tax breaks enacted in 2017 under then President Donald Trump. "The president's budget details a roadmap to build on that progress and finish the job," said Shalanda Young, director of the White House Office of Management and Budget.

U.S. President Joe Biden is traveling to the swing state of Pennsylvania on Thursday to unveil a federal budget plan laden with spending proposals and higher taxes on the wealthy that forms a blueprint for his expected 2024 re-election bid. Biden's proposal faces stiff opposition in Congress this year after Republicans won control of the House of Representatives in November's midterm elections and large parts of it are unlikely ever to be enacted.

The plan, however, is a political statement that directly defies Republican House Speaker Kevin McCarthy's threat to block an increase in the $31.4 trillion limit on federal borrowing unless Biden agrees to rein in federal spending. Speaking at a Philadelphia union hall, the Democratic president will highlight plans to cut, though not eliminate, the nation's deficit by nearly $3 trillion over 10 years by raising taxes on those earning more than $400,000 a year and ending some corporate tax breaks enacted in 2017 under then President Donald Trump.

"The president's budget details a roadmap to build on that progress and finish the job," said Shalanda Young, director of the White House Office of Management and Budget. Biden proposes funding higher outlays and closing the deficit by imposing a 25% minimum tax on billionaires and doubling the capital gains tax from 20%, the White House said. Biden has also said the budget will propose quadrupling a 1% stock buyback tax, while going after corporations and rich

Former Vice President Mike Pence, a Republican who is considering running in the 2024 presidential election, called the budget plans "a mishmash of shell games, budget gimmicks, and massive tax hikes that will harm economic growth while merely delaying Medicare's insolvency by a few more years." He said Biden could eliminate hundreds of billions of dollars from the deficit by repealing some of his policies, including a student loan forgiveness plan.

John Gimigliano, a senior tax executive at KPMG accounting firm, said Biden's proposals had "little-to-no shot" at becoming law, they served an important political purposes. "While the tax proposals that will be put forth by the administration later today are unlikely to get much traction in a divided Congress, it is the job of the president to reinforce the current administration's view of the tax system for the American people and to keep these ideas alive in their minds as we head into the 2024 elections," he said in a statement.

Biden will promise to protect those earning less than $400,000 a year from tax increases and safeguard Social Security, Medicare and Medicaid. At the same time, he will offer relief to working families by investing billions to ease the cost of childcare and ensure free preschool for all of the country's 4 million 4-year-olds, and promises to increase rail safety. White House officials say lowering the cost of childcare will boost the economy and allow more women to return to work. Such proposals also enjoy strong support and could help boost Biden's low approval ratings as he gears up announce his reelection bid this spring.

Republicans say Biden's spending during his first two years in office drove inflation to nearly 40-year highs last summer. The Federal Reserve estimates COVID-related federal spending under Trump and Biden in 2020 and 2021 added 2.5 percentage points to U.S. inflation. Republicans are already readying $150 billion in cuts to non-defense discretionary programs, including about $25 billion from the Department Education and cuts in foreign aid and programs aimed at preventing sexually transmitted diseases. They say that would save $1.5 trillion over a decade.

Is there common ground? "Very little, very little," Republican Representative Ben Cline told Reuters. "He doesn't want to cut any spending, he just wants to raise taxes."

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