This content was published on May 28, 2021-17: 53
President Joe Biden on Friday proposed a $ 6 trillion budget to “reinvent” the US economy and compete with China, which, if approved by Congress, would lead the country into record debt.
“We must seize the opportunity to reinvent and build a new American economy that invests in the promises and potentials of every American,” the president said in a message to Congress.
The Covid-19 pandemic has plunged the United States into the worst economic crisis since the 1930s, and as the world’s largest economy has begun to recover, it is still far from pre-pandemic levels.
The president warned that “the United States simply cannot return to what it was before the epidemic and economic recession, as structural weaknesses and disparities in the old economy still exist.”
In America, the president’s annual budget is more of a wish-list or a message about his priorities than anything else. Legislators ultimately decide the amount and destination of the money, and the current Congress has a very narrow Democratic majority.
The opposition Republicans fear giving the central government a prominent place. Even some Biden supporters warn that the US economy, now ready to recover from the effects of the epidemic, is in danger of slipping into inflation.
Nonetheless, the mega-plan signals the White House’s determination to put concrete numbers on Biden’s campaign to rethink the relationship between government and the private sector, in what is defined as an existential competition with China.
Under the Biden plan, the federal faucet will release about $ 6 trillion in 2022, with the increases gradually increasing to $ 8.2 trillion in 2031.
All of that spending could add to the debt, which now accounts for more than 100% of GDP. It is expected to reach 111.8% of GDP in 2022 and 117% in 2031.
The Democrat clarified the fate of the $ 6 trillion: much of it will go to the originally proposed $ 2.3 trillion infrastructure bill, but which has been reduced to $ 1.7 trillion in negotiations with Congress.
Another $ 1.8 trillion will be allocated to increasing state funding for education and social services as part of building a better workforce in the 21st century.
Biden argued that the overarching goal is to develop America’s middle class, as well as to put the United States “in competition” with its rivals.
– Can it be approved? –
The proposed budget will be released just before the Memorial Day long weekend and with Congress in a week-long hiatus.
His introduction may now limit his momentum on Capitol Hill, as many Democrats want Biden to use his control of Congress to pass transformative legislation, but Republicans are doing their best to try to block most of what the president proposes.
Spending priorities are just one area of the split between the two.
For example, Republicans are nearly unanimous in opposing Biden’s broad definition of infrastructure, which includes green energy and social programs.
There is less agreement on how to pay for these plans.
Biden wants to raise the money by ending the corporate tax cut that Republicans passed under his predecessor Donald Trump.
The president also wants to aggressively go after the $ 1 million tax loopholes used by large corporations.
Republicans refuse to accept this mechanism, saying that more modest spending plans on their own infrastructure can be paid for by reallocating unspent money already budgeted.
Despite the standoff, and the sheer size of Biden’s huge budget, the White House still has potential power up its sleeve.
Usually, Biden needs at least 10 Republicans to achieve the required majority in the Senate, today divided equally between the two parties, a difficult task at best.
However, if the Democrats remain unanimous, which is also not guaranteed, they may be able to pass the budget through a swift procedure known as reconciliation, which requires fewer votes.