(CNN) – President Joe Biden released his annual budget on Thursday and set out his policy priorities for the coming year.
Make no mistake, the proposed budget has no chance of getting through the Republican-controlled House. But Biden’s plan will Shape upcoming political battles on Capitol Hillwhere the GOP has yet to unveil its own spending plan.
Biden’s budget comes out after that The US has reached the debt ceiling, a cap set by Congress earlier this year. The Treasury is now taking extraordinary measures to allow the government to continue paying its bills. But the country could start with it fails to meet his obligations over the summer if Congress doesn’t address the debt ceiling first. Republicans are asking for some spending cuts in return for voting to raise the ceiling, while the White House refuses to negotiate a resolution to the debt limit drama.
Many of the provisions in the budget echo the President’s earlier proposals to expand the social safety net and pay for it through tax increases for the wealthy and corporations. He wants to restore them extended child allowance and make it permanent improved Obamacare subsidies, both enacted in the American rescue plan in 2021. And he wants to provide universal free preschool, make college more affordable, and start one nationally paid family and medical leave Program that hasn’t made it into previous packages when Democrats controlled Congress for the past two years.
Biden’s spending plan also includes propping up Medicare and capping the price of insulin for all Americans.
The government says these proposed measures will result in a nearly $3 trillion reduction in deficits — the difference between government spending and revenue — over the next decade.
Here’s what’s in Biden’s budget proposal
Set a minimum tax on billionaires: The budget includes a minimum tax of 25% on the entire income of the richest 0.01% of Americans, including their estimated wealth. It would hit those with a net worth greater than $100 million. Previous efforts to add this type of tax have not been successful.
Increase in corporate tax rate: Biden wants to increase the corporate tax rate to 28%, up from the 21% set in the 2017 GOP tax cut package. The budget would also reduce incentives for multinationals to book profits in low-tax jurisdictions and increase the tax rate on their foreign earnings from 10.5% to 21%. And it would increase the stock buyback tax introduced last year from 1% to 4%.
Repeal Trump’s tax cuts for the rich: Biden’s budget would remove some tax cuts for certain individuals introduced by the Republican’s 2017 tax law.
Biden’s plan would raise the top tax rate from 37% to 39.6%. This would impact single people earning more than $400,000 a year and married couples earning more than $450,000 a year, according to the administration.
It also proposes taxing capital gains at the same rate as wage income for those earning more than $1 million and closing the carried interest loophole, which allows investment managers to treat much of their compensation as capital gains – and thus lower their tax rate.
The Biden administration has had problems before Received support for these provisions from some Democrats.
Restore the increased child tax credit: The budget provides for the revival of the expanded child tax credit that was in effect for 2021. It would increase the credit to $3,600 per child for children under 6 and $3,000 for older children. This would permanently pay back the loan in full, allowing more low-income families to qualify.
Improve Medicare finances: Biden wants support the Medicare Hospital Insurance Trust Fundknown as Part A, by raising taxes on those making more than $400,000 a year and allowing Medicare to negotiate prices on even more drugs.
Medicare, which covers more than 65 million seniors and people with disabilities, will only be able to Pay plan benefits in full until 2028, according to the latest forecast by its trustees. Biden’s proposal would extend Medicare’s ability to pay by 25 years or more, according to the White House.
The plan would increase the net investment tax rate on earned and unearned income over $400,000 from 3.8% to 5%. It would also be levied on owners of certain pass-through corporations who include business income on their personal tax returns and are not currently taxable.
In addition, the measure would give revenue from the tax created by the Affordable Care Act to Medicare’s Hospital Insurance Trust Fund.
Also, the proposal would build on that Anti-Inflation ActCongressional Democrats passed last summer by allowing Medicare to go ahead negotiate prices for more drugs and to bring drugs into negotiations sooner after their launch. And it would expand the legal requirement that drug companies pay Medicare rebates when they do so prices rise faster than inflation for commercial health insurance.
$35 Insulin for All Americans: The budget also calls for capping the price of insulin at $35 a month for everyone. The Inflation Reduction Act capped the price of each insulin prescription at $35 per month Medicare beneficiaries From this year on.
Democrats had hoped to expand the provision to people with private insurance as part of last year’s package, but congressional Republicans blocked the measure.
Reduce Prescription Drug Costs for Seniors: The budget would limit Medicare beneficiaries’ out-of-pocket expenses to no more than $2 for generic drugs used for certain chronic conditions. Costs for seniors would also fall if Medicare expanded its drug price negotiations.
Making Improved Obamacare Subsidies Permanent: Biden wants to continue the more generous subsidies under the Affordable Care Act, which are scheduled to expire after 2025. The temporary improvement has increased the premium subsidy and allowed more middle-class people to qualify. The proposal would also provide Medicaid-like coverage to those in states that have not expanded the public health insurance program for low-income Americans.
Increase food security: The budget would provide more than $15 billion to allow more states and schools to provide free school meals to an additional 9 million children.
Reduce maternal mortality: Biden would provide $471 million to reduce maternal death rates and expand maternal health initiatives in rural communities. It would also require all states to offer uninterrupted Medicaid health insurance after childbirth for 12 months instead of 60 days.
Lower Medicaid Spending: The budget would require private insurance companies that offer Medicaid coverage to pay back some money if they charge the program far more than they actually spend on patient care. And it would give the Department of Health and Human Services the authority to negotiate additional, supplemental, Medicaid drug discounts on behalf of states.
Make college cheaper: The spending plan calls for a $500 increase to the maximum Pell grant, which is awarded annually to approximately 7 million college students from the lowest-income families. Currently, the maximum PELL grant is $7,395 for the 2023-2024 school year. Congress has increased the maximum by $900 over the past two years, but the grant historically a larger proportion of college costs than now.
Biden’s budget would also allocate $500 million to a new scholarship program to make two years of community college free. And it’s asking Congress for a $620 million increase in funding Office of Federal Student Support, which processes financial aid forms and helps manage student loans. The bureau received no funding increase this year, although it will likely need to help borrowers resume payments this summer after a three-year hiatus.
Universal preschool and affordable childcare: The budget would provide funds for a new federal-state partnership program that would provide universal, free preschool. The spending plan would also increase funding for existing federal early childhood care and education programs.
Provide paid family and sick leave: Biden’s budget would establish a national program for paid family and medical leave. It would grant eligible employees 12 weeks of leave to take time off to care for and bond with a new child, to care for a critically ill loved one, to heal from their own critical illness, circumstances to address those arising out of a loved one’s military service, or to seek protection from domestic violence, sexual assault or stalking, the administration said.
Congress provided for paid sick leave during the Covid-19 pandemic, but The legislator let the benefit expire in 2021.
Address climate change: The spending plan calls for billions of dollars in investments to help fight climate change.
For example, the money would go towards creating clean energy jobs and reducing energy bills for families, funding climate research and helping communities strengthen their infrastructure to withstand floods, wildfires, storms and droughts brought on by climate change caused.
The investments would also help meet Biden’s goal of reducing greenhouse gas emissions by 50% to 52% by 2030.
Military defense and support of Ukraine: The proposed budget would allow the US Department of Defense to increase appropriations by 3.2% over this year’s level, with a focus on fighting China and supporting Ukraine.
It would also provide more than $6 billion through the Defense and State Departments to Ukraine and other European allies to help fight Russian aggression.
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