President Biden’s first year in office was marred by his failed attempt to pass the enormous Build Back Better package, a grab bag of spending initially characterized as a transformative agenda and later touted as a way to reduce household costs as inflation became the central economic issue of the day.
Now, it seems, Biden has accepted that his first-year agenda is not going to fly. Instead, he has presented a budget that is more in keeping with our current economic and national security needs. It is also arguably closer to the center-left agenda he presented in his 2020 campaign victory.
The budget is centrist and even old-school conservative in some respects. Unlike his prior budget and his predecessor’s budgets, the $5.8 trillion plan reduces the deficit with tax hikes. The Post reports the request "reflects a major administration pivot to rein in future borrowing, introducing a proposal that would reduce the national deficit by roughly $1 trillion over 10 years.” If Biden hopes to gain credibility in tackling inflation and to gain support from Sen. Joe Manchin III (D-W.Va.) for even a few parts of his spending plan, this is a start.
Other parts of the agenda are downright conservative, such as items that respond to complaints that Biden’s administration has not taken on crime. The budget includes more than $32 billion for crime fighting, including a $2 billion increase for the Justice Department. If Republicans vote down this funding, expect Democrats to explain that it is Republicans who don’t want to “fund" the police.
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Shalanda Young, director of the Office of Management and Budget, argued in a phone call with reporters that “the budget invests in security both at home and abroad.” She touted “critical investments to keep our communities safe, fund crime prevention and community violence intervention, put more cops on the beat for community policing, fight gun violence and advance criminal justice reform.”
Also in the centrist category, Young explained, is “one of the largest investments in national security in U.S. history, strengthening our military and leveraging our renewed strength at home to meet pressing global challenges.” That amounts to $30 billion in additional defense spending, for a total of $813 billion. And instead of funding a useless wall to address illegal immigration, Biden has proposed increasing spending on Customs and Border Protection and Immigration and Customs Enforcement, with $309 million for border technology and $19 million for border fencing.
Rounding out the items intended to appeal to independents and even some Republicans, Biden focuses his “unity agenda” on investments in mental health, cancer cures, care for veterans affected by burn pits, and opioid abuse prevention and addiction treatment.
On the more progressive side of the ledger, Biden has requested ample funding for items such as pandemic readiness, climate change, rural development and education. But the most dramatic proposals are on the revenue side, where he puts forth a raft of tax increases for the super-rich and corporations. That includes some some familiar ideas (e.g., raising the corporate tax rate from 21 to 28 percent, increasing the top individual rate to 39.6 percent, closing the carried interest loophole) but also a new tax that targets the billionaire class whose wealth rests primarily in stock by requiring a minimum tax on 20 percent of earnings, including unrealized stock gains. Such hikes have been popular with voters — even more so than some spending items in the Build Back Better plan.
Republicans in Congress will holler that Biden is raising taxes (though plenty of their voters do support raising taxes on the wealthy). Still, unlike the ill-conceived proposal from Sen. Rick Scott (Fla.), the head of the National Republican Senatorial Committee, to raise taxes on as many as 100 million people at the lower end of the income scale, Biden is going after juicy targets who pay little to nothing in federal taxes.
What is striking about the budget is how closely it tracks with Biden’s center-left message, both in demanding the rich pay their fair share and in responding to conservative issues such as border control, crime and national security. In a sense, it is a lifeline to moderate Democrats who will have an especially hard time hanging on to seats in swing districts. Biden, it seems, has gotten the message from these desperate members of his party.