The Biden administration proposed $6 trillion 2022 federal budget, which includes a $4.5 trillion spending plan on proposed government public programs over the next decade and a large tax increase.
For the next fiscal year, which begins in October, the White House includes $1.52 trillion in discretionary spending to fund the military, domestic programs, extra funding for education, health care, research and investment in renewable energy sources.
This amount will also go to fund the two major public spending programs that the Biden administration is seeking to pass in Congress through the reconciliation process: the American Jobs Plan and the American Families Plan.
The American Jobs Plan seeks to create massive spending on renewing the country’s infrastructure, including investments in road infrastructure, renovation of the water and sewer network, the implementation of 5G internet throughout the U.S., the transition to electric vehicles in public transportation, the implementation of renewable energy-based electricity infrastructure, and budgeting for the construction of thousands of electric vehicle charging stations.
The American Families Plan would allocate money to pay for free preschool education, as well as increase spending on early childhood care and expand child tax credits for low-income families. Transfers for community colleges and the expansion of technical and secondary education would also be expanded.
President Biden’s spending plan also seeks to expand Medicare coverage and expand the population that could enroll in Affordable Care created by his political godfather and predecessor, Barack Obama.
What would be the real cost of the $6 trillion 2022 federal budget proposed by the Biden administration?
The 2022 federal budget would increase discretionary government spending by 8.4%, or $118 billion over the amount approved last year to deal with the coronavirus emergency. Public spending, not including the defense budget, would increase by 16%, or $769.4 billion, and defense spending would increase by 1.7%, or approximately $753 billion.
With the budget proposed by the Biden administration, the U.S. debt would reach 117% of GDP by 2031, surpassing the level of indebtedness assumed by the nation during World War II. Public debt already exceeds 100%, totaling just over $21 trillion.
Although the debt will reach the highest levels seen in peacetime, the Biden administration expects that interest payments will not exceed 2% of GDP over the next decade.
The White House budget serves as a blueprint for determining the focus of public policy over the next few years, with this budget the Biden administration indicates that it will focus on expanding the size of the state and not on reducing the deficit that continues to grow in the aftermath of the pandemic.
Although Democrats have praised President Biden’s spending proposal stating that it addresses historically neglected problems in the United States, Republicans have criticized it as an unfocused spending plan that caters more to the political agenda of the Democratic Party than to the real problems of American society.
To finance the cost of the $6 trillion budget, the administration has proposed increasing the income tax on Americans earning more than $400,000 a year, increasing the corporate tax from 21% to 28%, a universal tax on foreign companies for profits on U.S. soil of 20%, and increasing the tax on capital gains over $1 million from the current 20% to 43.5%.