On May 28, 2021, US President Joe Biden presented his budget for the fiscal year 2024, outlining his plan to cut $3 trillion from the fiscal deficit over the next decade. The budget also includes proposed tax hikes on both wealthy individuals and large corporations, which is predicted to add more revenue to the government’s coffers. Biden’s proposed budget for the fiscal year of 2024 includes a $6.8 trillion spending proposal, which is slightly above the current year.
Biden’s budget proposal sets the stage for a political battle between Democrats and Republicans, who control the House of Representatives. However, this is only a blueprint, and Congress still needs to pass an increase to the debt ceiling. Furthermore, as Republicans oppose increasing taxes, their leaders rejected the idea of reductions in Social Security or Medicare.
The primary objective of the proposed budget is to reduce the growing fiscal deficit, which has ballooned due to the spending incurred from the Covid-19 impacts on the economy. Biden hopes to eliminate the deficit caused by the pandemic and maintain a sustainable budget that will help bring positive economic growth in the future.
To achieve his budgetary targets, Joe Biden has proposed increasing the corporate tax rate from 21% to 28%, hiking taxes on oil and gas companies and allow Medicare to negotiate drug prices. Biden aims to curtail tax avoidance tactics employed by multinational corporations and the wealthy elite.
The budget’s blueprint projects an annual deficit of over $1 trillion each year through 2033, with the debt-to-GDP ratio reaching 109% by that year. The budget generally assumes an annual growth of 1.5%, which may prove to be challenging to achieve, as the economy has not grown to such a level in recent years.
It looks as though President Biden’s budget plan may affect higher income-earners and affluent corporations the most. The proposed tax hikes target the wealthiest Americans and multinational corporations, who have exploited tax laws and offshore accounts to avoid paying their fair share of taxes. Biden’s plan intends to balance the tax obligation between all income groups and prevent the inequality that has been rising for the past few years.
Since the Covid-19 pandemic has impacted every aspect of the United States’ economy, many have raised concerns about budget deficits and the growing federal debt. Biden’s budget aims to curtail the ongoing trend of mounting debt and decrease the deficit in the upcoming years. Although this plan may seem to satisfy the Democrats, the opposition may not receive it well, and it still has to go through Congress.
The economy’s growth rate is another significant concern among economists, as the current annual growth level is not enough to support the increasing debt. It is essential to grow the economy at a higher rate to withstand any future economic hardships and maintain a balance between the national budget and the country’s overall economy.
With the proposed budget, the government hopes to allocate funds to critical programs such as healthcare, education, infrastructure, and other social sectors to create a more prosperous and equitable society. Biden wishes to boost economic growth, create job opportunities and improve living standards for every American.
However, it is essential to address the main challenges that exist with the budget proposed by the Biden administration. There is a growing concern about the national debt and the mounting budget deficit. Additionally, it would require bipartisan support to pass the budget proposal in Congress, with Republicans being the major opposition.
In conclusion, although Joe Biden’s budget proposal seems like a positive step towards economic recovery from the Covid-19 pandemic, it is essential to note that the country is still facing critical challenges that need to be addressed. The aim should be to create a sustainable budget that upholds equity and progress in the nation rather than adding to the growing national debt.