President Joe Biden’s proposed federal budget for fiscal year 2025, which starts October 1, raises taxes on corporations and the rich while—among other priorities--expands federal power to cut prescription drug prices. It also would add tax credits for the poor and middle class.
In short, like all other presidential budgets, it’s a political document. And congressional gridlock, especially in the Republican-run U.S. House in an election year, means that its overall bottom lines are unlikely to survive the legislative sausage factory.
Despite hurdles and roadblocks, Biden’s budget is valuable for one reason. Even more than his State of the Union address, it sets out his priorities. As the old saying goes, “follow the money.” Such as Taxing millionaires and billionaires. This illustrates of the politics of budgeting.
Biden “has already secured historic legislation to make our tax code fairer, from enacting a corporate minimum tax so that billion-dollar companies can’t get away with paying $0 in federal income taxes to giving the Internal Revenue Service the tools it needs to make wealthy tax cheats pay the taxes they owe,” an administration fact sheet says.
President Biden will fight to stop Republican plans to add trillions to the deficit with tax cuts skewed to the wealthy and largest corporations. Republicans would rather add trillions to the national debt than take back even one dollar of the $150 billion annual rate cut corporations received under President Trump. Now, President Biden’s budget will cut taxes for working families and lower deficits by trillions of dollars over a decade by making the wealthy and big corporations pay their fair share—and no one earning less than $400,000 per year will pay a penny in new taxes.
His proposals in this budget blueprint include raising the corporate tax rate from 21% under the Trump-GOP 2017 tax cut to 28%, doubling the U.S. tax rate on multi-national firms’ foreign earnings—think the “Fiat” share of Stellantis, formerly FiatChrysler--to 21%, enacting legislation to prevent firms from escaping U.S. taxes by technically moving their “headquarters” to foreign tax havens, and denying corporate tax deductions for salaries above $1 million.
“My goal,” Biden told the National League of Cities on budget day, is to cut the federal deficit “by $3 trillion” over the next decade “by making the wealthy and big corporations finally begin to pay their fair share,” he said to applause. “Folks, look, I’m a capitalist. If you can earn a billion bucks, wonderful. Just pay your fair share, man, not 8.2%.” The applause repeated. “If you paid 25%, we’d have $500 billion more over the next 10 years to cut the deficit, to provide child care, to do all the things we need to do.”
Tax cuts for the middle class and working class.
Biden wants to restore the full child care tax credit, and make it permanent. It was instituted to help cash-strapped families during the pandemic-caused depression, but Congress let it lapse. He’d bring it back, at an average of $2600 for 39 million families with 66 million children. That includes “two million children living with a caregiver who is at least 60 years old. It would also provide breathing room for day-to-day expenses by allowing families to receive their tax credit through monthly payments,” a budget fact sheet says.
“And by strengthening the Earned Income Tax Credit for low-paid workers who aren’t raising a child in their home, the president’s budget would cut taxes by an average of $800 for 19 million working individuals or couples. That includes two million older workers age 65 and older and five million young adults age 18 to 24 who would be newly eligible for the credit.”
Child care aid.
That was another pandemic-prompted payment which later lapsed. The difference is those payments went to providers and child care centers, while this one would be structured so that most working families—those with incomes up to $200,000 yearly—would pay between zero and $10 a day for child care. It would aid parents of 16 million kids, and harks back to a World War II system.
More money for OSHA, and the National Labor Relations Board.
Biden would allot $655 million to the Occupational Safety and Health Administration, slightly more than in the year that began on October 1. Of that, 40% ($262 million, up $19 million from this year) would go for federal job safety enforcement, with another $120 million in federal aid to states—such as New York and Illinois—certified to run their own OSHAs, with the same standards and procedures as the feds.
OSHA could hire 18 more workers, Biden says, raising its workforce to 1,980—100 fewer than in 2023. The number of inspections, combined state and federal, would decline from 68,536 to 68,400, Biden’s budget predicts. Overall, Biden proposes spending $2 billion on labor enforcement, including catching wage thieves.
The NLRB’s workforce will handle a lot more cases, thanks to increased worker activism and organizing since the coronavirus pandemic hit. Biden wants NLRB to get $320 million in the year starting October 1, up from $299 million this fiscal year. It’ll need it: The administration predicts the NLRB workers will handle 30,629 cases in the next fiscal year, 17% more than the 26,264 this year.
The added money would “strengthen the National Labor Relations Board’s capacity to enforce workers’ rights to organize and collectively bargain for better wages and working conditions,” an administration fact sheet says.
No cuts to Social Security and Medicare.
Biden’s 2024 election foe, former Republican Oval Office occupant Donald Trump, handed Biden that issue on a silver platter the day the budget came out, by saying he would cut the two big programs and that “there’s a lot of waste and fraud” in both.
“As the president has made clear, he will reject any efforts to cut or undermine the Medicare or Social Security benefits seniors and people with disabilities earned and paid into their entire working lives,” another administration summary says. “The budget honors that ironclad commitment by firmly opposing benefit cuts to either program and by embracing reforms that would protect and strengthen” them. He “strongly rejects congressional Republicans’ attempts to cut benefits for hardworking Americans.” However, Biden opposes Medicare for All. The budget is silent on GOP efforts to privatize Medicare.
To improve Medicare’s finances, Biden would save Medicare--and seniors--$200 billion over a decade by giving it the power to bargain with Big Pharma over lowering drug prices for a wide range of prescription drugs, not just insulin. The $35 monthly price for insulin would be extended to all diabetes sufferers, not just those Medicare and Medicaid cover. And he’d limit generic drug prices to $2 per monthly prescription for common drugs, such as those used to battle high blood pressure.
Biden wants $955 billion, a $75 billion increase in the basic military budget, for the year starting October 1. Basic military spending this fiscal year includes $880 billion in the regular military budget, but Biden still wants $95 billion more in war aid to Israel and the Ukraine. And there’s another $20 billion, in the package of spending bills Biden signed the week before, on modernizing U.S. nuclear weapons via the Energy Department.
