President Joe Biden announces his budget proposal at the Finishing Trades Institute in Philadelphia on Thursday. The president's budget proposal is widely seen as a critical test for his ambition in the second half of his term. Photo by Laurence Kesterson/UPI | License Photo
March 9 (UPI) -- President Joe Biden unveiled his federal budget proposal during a speech in Philadelphia Thursday, saying it "reflects what we can do to lift the burden on hardworking Americans."
He called on Congress to support his plan to extend Medicare and Social Security and reduce the deficit by raising taxes on wealthy Americans and corporations.
The major policy address came as U.S. lawmakers are debating the federal budget to avoid a potential default on the national debt while tension also has been building with Congress over Biden's strategy to raise the debt ceiling.
The budget proposal is widely seen as a critical test for Biden's ambition in the second half of his term as his policies are certain to face disapproval from Republicans who hold a new majority in the House.
The president -- living up to the vow he made after meeting with House Speaker Kevin McCarthy last month to deliver his budget on March 9 -- said he is now waiting to meet with McCarthy as soon as tomorrow.
"Folks, let me tell you what I value. I value everyone having an even shot. Not just labor but small business owners, farmers, so many people that hold the country together who've been basically invisible for a long time," Biden said. "My budget reflects what we can do to lift the burden on hardworking Americans."
The president leaned on the victories he has claimed during his first two years in office, particularly the recently adopted price caps on insulin and medications for seniors. He warned that "MAGA Republicans" will attempt to take bargaining power away from Medicare by undoing the Inflation Reduction Act.
In a press briefing on Thursday, Senate Majority Leader Chuck Schumer, D-N.Y., said the "most amazing" part of the budget that "American's are going to jump for joy" for is a $2 cap on out-of-pocket costs for high-value generic drugs. Schumer said he was also proud that the child tax credit would be restored, which Democrats say cut child poverty in half at the height of the COVID-19 pandemic.
"It's clear that the president has thought long and hard about what people need and has come up with a great proposal," Schumer said. "So now the ball goes to speaker McCarthy and the Republicans' court. There's one big question we're all still asking. Speaker McCarthy, where is your plan?"
On Wednesday, Senate Republican Leader Mitch McConnell vowed Biden's budget of tax increases "will not see the light of day" when the proposal lands on Capitol Hill.
"You know the president's budget is replete with what they would do if they could -- thank goodness the House is Republican -- massive tax increases, more spending," he told reporters.
Fact sheets released by the White House on Thursday contest McConnell's claims about spending, stating that the president's budget proposal will reduce the deficit by about $3 trillion in the next 10 years.
The White House's press release on the federal deficit also criticizes an alleged double-standard by Republicans in Congress. During recent speeches, Biden has said Republicans did not oppose his predecessor when he increased the deficit, yet have stood firmly against the president.
"While the previous Administration passed a nearly $2 trillion unpaid-for tax cut with benefits skewed to the wealthy and big corporations while dramatically increasing the deficit, President Biden cut the deficit by more than $1.7 trillion during his first two years in office-the largest decline in American history," the White House said.
Biden said his budget will also invest in affordable housing for the elderly and people with disabilities, arguing that keeping them in their homes saves the federal government money. The plan increases the investment in housing and urban development programs by $300 million and puts $258 million toward permanent affordable housing units catered to the elderly and disabled.
"It's not only the right thing to do but it's cheaper on the taxpayer," he said. "It helps folks go to work while taking care of their family, stimulate economic growth."
Biden warned that "MAGA Republicans" have threatened to enter into default if he does not bend to their budget wishes, which he said would cause a "massive recession." He called the strategy "dangerous," and questioned how Republicans can live up to promises of reducing the deficit without making cuts to federal programs like Social Security, Medicare and Medicaid.
"How are they going to make the math work?" he asked. "Our estimate -- from what we know about their plan -- their plan would explode the deficit by more than $3 trillion in the next 10 years."
Biden's reforms would increase the Medicare tax rate from 3.8% to 5% on those who earn more than $400,000 per year, which would keep Medicare solvent for the next 25 years, the White House says.
The plan also includes billions in federal dollars for expanding childcare for U.S. workers.
Biden touted his efforts on climate, manufacturing, infrastructure and clean energy across the nation, while working to lower costs for families amid historic inflation.
Biden's proposal also would close a financial loophole that has allowed the nation's highest earners to avoid taxes by claiming parts of their income as neither earned nor gained from investment.
"We are going to have to ask the wealthiest and biggest corporations to begin to pay their fair share and start cutting subsidies to special interests," Biden said. "No billionaire should be paying a lower tax rate than somebody working as a school teacher or a firefighter."
The plan would also strengthen the government's ability to negotiate lower prescription costs by expanding the number of drugs available through Medicare, as part of what the White House calls a cut to wasteful spending on "Big Pharma."
Biden wants to expand the Inflation Reduction Act by adding commercial health insurers to a requirement that forces drug companies to pay rebates to Medicare whenever medicine prices rise faster than inflation.
Savings from these budget reforms would pour an additional $200 billion into Medicare's Hospital Insurance Trust Fund over the next decade, the White House said.
Republicans have continued to express strong opposition to Biden's tax proposals, and instead want to curtail the surging national debt through spending cuts.
"We can no longer ignore the major problem that we have: The size of our debt," House Speaker Kevin McCarthy said Wednesday following a bipartisan budget meeting at the Congressional Budget Office. "We promised we would change course."
McCarthy and the White House are currently in a stalemate over the debt ceiling, which Biden has refused to negotiate after Republicans raised it three times under former President Donald Trump.
Prior to Biden's speech Thursday, McCarthy said he looked at Biden's budget proposal.
"President Biden just delivered his budget to Congress, and it is completely unserious," McCarthy tweeted. "He proposes trillions in new taxes that you and your family will pay directly or through higher costs. Mr. President: Washington has a spending problem, NOT a revenue problem."
A joint statement from McCarthy, House Majority Leader Steve Scalise, Rep. Tom Emmer and Republican Conference Chair Elise Stefanik said Biden's proposal raises taxes while the government is collecting "as much in taxes from American families as at any point" in history.
"Yesterday, Republicans and Democrats heard from the Director of the nonpartisan Congressional Budget Office and our worst fears were confirmed - after passing trillions of dollars in new deficit spending that we cannot afford, over the next 30 years, the national debt will be nearly twice the size of the entire economy," the statement said. "In the next ten years, the federal government will spend over $10 trillion on interest alone."