President Joe Biden unveiled a $6 trillion budget blueprint Friday that would set the government on a spending spree to make up for what White House officials described as a “decade of disinvestment.”
The budget request for the coming fiscal year envisions a decade of rising spending that incorporates the major initiatives Biden has proposed on infrastructure, education, child care, paid leave, climate change and more. Spending would rise steadily from $6 trillion in fiscal 2022 to $8.2 trillion in fiscal 2031.
The budget sets out a sweeping vision of change.
“We must seize this moment to reimagine and rebuild a new American economy – an economy that invests in the promise and potential of every single American; that leaves no one out and no one behind; and that makes it easier for families to break into the middle class and stay in the middle class,” the proposal proclaims at the outset.
While much of the spending would be paid for with tax increases on corporations and upper-income households, the budget nonetheless projects annual deficits exceeding $1.3 trillion through the next 10 years.
And after massive spending from the COVID-19 pandemic, the national debt, as a share of the economy, is on track this year to shatter the World War II-era record. It amounts to nearly 110 percent of gross domestic product this year, compared to the record 106 percent set in fiscal 1946.
Debt would continue to grow after that, reaching $39 trillion or 117 percent of GDP in 2031.
But administration officials said the extra spending is justified at a time of low-interest rates to help bolster a pandemic-battered economy and respond to pent-up domestic needs in education, public health, clean energy and more.
“Failing to make these investments at a time of such low-interest costs would be a historic missed opportunity that would leave future generations worse off,” Shalanda Young, the acting White House budget director, said in a conference call with reporters. “This budget does not make that mistake.”
Carving up the pie
Of the $6 trillion in projected fiscal 2022 spending, $1.7 trillion is allocated for the discretionary side of the budget controlled by annual appropriations. That latter figure includes money appropriated in prior years that hasn’t yet been spent.
The total for new appropriations requested is $1.52 trillion, with nondefense funds totaling nearly $770 billion — eclipsing defense, at $753 billion, for the first time in recent memory.
Mandatory spending programs, with the largest being Social Security, Medicare and Medicaid, take up $4 trillion in spending. In fiscal 2022, the administration anticipates spending $305 billion for interest payments on the debt.
While budgets proposed by presidents typically have little chance of being enacted in largely intact form by Congress, Biden’s budget could be different.
Even though Democrats have but a narrow majority in the House and a one-vote advantage — with the vice president breaking a tie— in the Senate, they could potentially enact much of the Biden agenda through the budget reconciliation process without needing GOP support. Reconciliation allows spending and tax-related legislation to pass with a simple majority in the Senate rather than the usual 60 votes.
Still, appropriations bills will need to garner the typical 60 Senate votes to advance, and Republicans were quick to dismiss Biden’s package.
Alabama Sen. Richard C. Shelby, ranking member of the Senate Appropriations Committee, issued a statement calling it “a blueprint for the higher taxes, excessive spending, and disproportionate funding priorities the American people can expect from his Administration over the next four years.”
The delayed budget submission — required by statute in early February — kicks off what promises to be a chaotic appropriations process, as lawmakers try to juggle annual spending bills with the mammoth infrastructure and other initiatives Biden has pitched.
While the budget request contains no surprises, it fleshes out many of the proposals Biden has laid out during the first few months of his presidency — and offers some new price tags.
Biden’s infrastructure and education-child care initiatives, combined with proposed increases in annual discretionary spending and related debt and interest costs, would add nearly $1.4 trillion to deficits in the coming decade.
Those deficits were already on track to rise because of the increasing costs of entitlement programs such as Social Security and Medicare, among other things.
But Biden’s plans would increase those deficits from nearly $13.2 trillion over 10 years to $14.5 trillion, his budget shows. That’s despite implementation of his tax policies, estimated to bolster federal revenue by about $3.6 trillion over the decade. Most of that increase — nearly $2.3 trillion — comes from corporate tax increases, the budget shows.
And despite the proposed spending surge, the White House projects only modest economic growth over the decade. Gross domestic product, adjusted for inflation, would grow by 3.2 percent in the fourth quarter of next year, compared to the same period this year. Growth would then fluctuate between 1.8 percent and 2 percent each year through 2031, according to White House projections.
Jennifer Shutt contributed to this report.