Budget plan from White House draws criticism

WASHINGTON - US President Joe Biden announced a budget blueprint on Monday that includes higher taxes on the wealthy and record military spending, which drew immediate criticism from Republican lawmakers.

Biden's document essentially tries to tell voters what a diverse, and at times fractured, Democratic Party stands for ahead of midterm elections that could decide whether Congress remains under the party's control.

The bottom line: Biden is proposing a total of $5.8 trillion in federal spending in fiscal 2023, which begins in October, slightly less than what was projected to be spent this year before the supplemental spending bill was signed into law this month. The deficit would be $1.15 trillion.

There would be $795 billion for defense, $915 billion for domestic programs, and the remaining balance would go to mandatory spending such as Social Security, Medicare, Medicaid and net interest on the national debt.

Biden said he was calling for higher defense spending to strengthen the United States military.

The higher taxes outlined on Monday would raise $361 billion in revenue over 10 years and apply to the top 0.01 percent of households. The proposal lists another $1.4 trillion in revenue raised over the next decade through other tax increases that are meant to preserve Biden's pledge to not hike taxes on people earning less than $400,000.

It is a midterm elections pitch to a nation still off balance from a chaotic few years caused by the pandemic, an economic recession, a recovery, challenges to US democracy, and the conflict in Ukraine.

Immediate backlash

The proposal faced immediate criticism from Republican lawmakers. They said higher taxes could hurt growth and objected to additional government spending that would feed into inflation.

"What this budget shows is that President Biden values more spending, more debt, more taxes and more pain for the American people," said Jason Smith of Missouri, the top Republican on the House Budget Committee.

On the tax front, it is unclear how Biden would get his policies through Congress. He had previously negotiated down the proposed 28 percent corporate tax rate, and his new minimum tax on the ultra-wealthy would include "unrealized gains", which are potential profits that exist on paper because the underlying asset has yet to be sold.

The result is that the special tax on people worth more than $100 million is unlikely to become law any time soon, said John Gimigliano, head of federal legislative and regulatory services at KPMG.

"That is kind of like a slow burn proposal, like let's continue to have this conversation over months or maybe years."

Lindsey Graham, the top Republican on the Senate Budget Committee, said Biden's tax hikes would harm US workers and the overall economy, while increasing deficits.

Agencies - Xinhua