Biden sends his $7.3 trillion budget to Congress
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President Joe Biden during the National League of Cities conference in Washington, DC, on Mar. 11, 2024. Photo: Leigh Vogel/Abaca/Bloomberg via Getty Images
President Biden is proposing a $7.3 trillion FY 2025 budget that would offset spending on his key domestic priorities — including tax credits for families and new money for housing — by increasing taxes on corporations and the rich.
Why it matters: Biden is using his budget to fill out the fine print of the campaign promises he has been making for months, and to press Congress to provide funding for Ukraine, Israel and border security.
- "My Budget also makes key investments in childcare and education, so every child in America can have the strong start they need to thrive," Biden said in a statement.
- "For too many hardworking families, it costs too much to find a good home, so we are working to lower costs and boost supply of housing nationwide," he said.
Reality check: Like all budgets, this one has little chance of becoming law.
- But it allows the Biden administration to clearly articulate its plans and priorities for a second term.
Between the lines: The budget is also another attempt by Biden to convince the country that he is serious about reducing the deficit.
- He claims that his taxing and spending agenda would lower the deficit by $3 trillion over ten years, compared to current policy.
By the numbers: Biden's budget, which assumes capturing trillions of dollars from corporations and wealthy Americans, still envisions trillion-dollar budget deficits for the next ten years, for a total of $16.3 trillion.
- For 2025, he plans to spend $1.8 trillion more than the government will collect in taxes. That translates to 6.1% of GDP.
- He wants to increase taxes on corporations by $2.1 trillion over ten years, in part by increasing the rate companies pay from 21% to 28%, while also capturing more of their foreign earnings.
- Officials estimate that Biden's "billionaires tax," which would impose a 25% minimum on all earnings, including capital gains, would bring in another $500 billion.
Zoom out: Monday's budget includes many of Biden's core legislative priorities, including those that ended up getting cut in the Senate during the negotiations that ultimately led to the Inflation Reduction Act.
- Biden is also setting the stage for a massive negotiation with Congress in 2025 over many provisions that former President Trump signed into law.
- That means that Biden is only extending some of his key priorities, such as the enhanced child tax credit, only through 2025.
Zoom in: Under Biden's plan, parents would get an increased child tax credit, cutting taxes by an average of $2,600 for 39 million low- and middle-income families, per a White House fact sheet.
- In an acknowledgment that housing costs are painful, he also wants to spend $258 billion to build or preserve over 2 million units, just one of several billion-dollar programs to expand housing inventory.
- And to increase home ownership, he wants to incentivize both sellers and buyers, providing a $10,000 tax credit to sellers for 2025 and then up to $400 dollars a month to first-time buyers to help with their mortgage payments.
