And his claim of deficit reduction is missing key context.
President Biden on Thursday unveiled a budget that has a staggering $5.5 trillion in tax hikes to help finance an expansion of Obamacare, Medicaid, and housing subsidies, as well as a slew of other federal programs.
Though the budget claims $3 trillion of deficit savings, that is only when measured against the budget that was already inflated by his first two years in office.
While the budget is not going anywhere, given Republican control of the House of Representatives, it does represent Biden’s opening salvo in upcoming negotiations over the budget and raising the debt ceiling.
The budget repeals the Trump tax cuts on individuals making over $400,000 and households earning over $450,000. Given that those households would include individuals earning less than $400,000, the latter would be a direct violation of his pledge that, “if you make less than $400,000, you won’t see one single penny in additional federal tax.”
The budget would also quadruple a tax on stock buybacks, increase taxes on corporations already under pressure from higher costs driven by inflation, and add an additional 25 percent tax on high-net-worth individuals. He also increases an Obamacare surtax on investment income in a way that would hit small businesses, and then diverts the revenue from Obamacare to claim it will now shore up Medicare.
Relative to the most recent baseline from the Congressional Budget Office, Biden would raise taxes by $5.5 trillion and spending by $2.2 trillion over the next decade.
But the claim of deficit reduction is missing context, because the current CBO baseline has been inflated by Biden’s actions up to this point in office. In February 2021, when Biden was sworn in, CBO projected deficits of $14.5 trillion from 2021 to 2031. As I noted last month, CBO now projects deficits of $20.5 trillion over that same time period. If adopted, the Biden budget would bring that number down to $18.9 trillion, according to White House estimates. In other words, deficits would still be $4.4 trillion higher than what was anticipated when he took office.