President Biden on Monday unveiled a $ 5.8 trillion budget that envisions a significant increase in U.S. defense spending, indicating the government’s willingness to devote additional resources to military programs, including Ukraine’s aid to Russia.
The Biden government is seeking $ 813 billion in military spending in fiscal year 2023, beginning October 1, an increase of about 4% from the $ 782 billion raised for that fiscal year.
The requested increase is more than double the 1.6% aid the government sought for military spending in last year’s budget. The proposal calls for $ 682 million in funding for Ukraine to address Russia and support its security and financial interests.
Mr Biden’s budget also highlights efforts to reduce the deficit and increase law enforcement spending at the Department of Justice. The overall budget is a departure from last year’s request, which outlines a huge boost in spending on domestic programs and a detailed financial plan for Biden’s sweeping education, social and climate change agenda. In Monday’s proposal, the White House largely silences this agenda, which has stalled in Congress.
SHARE YOUR THOUGHTS
What items would you like to have included or removed from the budget request? Take part in the discussion below.
The change comes after Russia’s invasion of Ukraine, Biden’s place in the polls has waned and Democrats’ hopes of approving a sweeping economic package have waned.
“I call for one of the largest investments in our national security in history, with the funds needed to ensure that our military remains the best-trained, best-trained, best-equipped army in the world,” Biden said. in a statement. “In addition, I urge continued investment to respond vigorously to Putin’s aggression against Ukraine with US support for Ukraine’s economic, humanitarian and security needs.”
The budget also includes $ 17.4 billion for law enforcement in the Department of Justice, including $ 1.7 billion for arms smuggling efforts, and provides funding to U.S. Marshals and the U.S. Federal Bureau of Investigation.
The budget outlines administration policy priorities, but Congress will have final approval for many of its funding requests, and much of federal spending on rights programs such as Social Security is done automatically each year.
The request will address the same political adversities in the Capitol that helped define Biden’s first year in office. Democrats have very close control of the House and Senate 50-50, and Republicans have sided against many of the Biden administration’s proposals. Democrats are preparing to lose control of one or both houses of Congress in the midterm elections.
The proposed level of military spending would be the highest ever, if enacted, but it would not be the largest increase in a year compared to some previous years during the wars in Iraq and Afghanistan. The biggest budget comes after the US ended the 20-year war in Afghanistan in August, but is now trying to tackle the crisis in Europe.
U.S. military spending will also require additional long-term investment, particularly in the Navy, to stay focused on China as the biggest, most strategic threat U.S. officials say. Military capabilities to deal with China will require billions of dollars in new investment over time.
Biden government officials said the 2023 budget focuses on reducing the deficit, in line with the recent boost.
The government forecasts an annual decline of about 50% of the US deficit during fiscal 2022, to $ 1.4 trillion. Under this scenario, the deficit as a percentage of US gross domestic product will be reduced to 5.8% in 2022 from 12.4% in 2021, according to budget estimates.
The government has a deficit of $ 476 billion so far in fiscal 2022, down 55% from the same period last year, as spending on Covid-19 relief programs falls and a stronger economy generates more tax revenue.
Government debt will fall to 101.8% of US GDP in fiscal 2023, compared to the White House forecast of 102.4% this year. Debt is expected to increase in the coming years to 106.7% of GDP by 2032. In general, the 2023 budget sees debt increase more gradually over time than last year’s proposal.
The budget includes a proposal for a minimum tax rate of 20% on income, including unrealized gains on assets, for US households worth more than $ 100 million. This will apply to the top 0.01% of households, the White House said. This is probably under 20,000 households.
Under the proposal, households worth more than $ 100 million who do not pay at least 20% tax combined with their standard declared income and their gains on unsold assets, such as shares, will be subject to additional tax until they pay the new minimum of 20%. , according to the White House.
Under current law, capital gains are taxed only when they are realized — when assets are sold — and long-term profits are taxed at lower rates than normal income. The White House said the new tax would cut the US deficit by about $ 360 billion over the next decade and that the overall draft budget would cut it by more than $ 1 trillion.
The tax, which is unlikely to go to Congress, could have the biggest impact on billionaires like Jeff Bezos and Mark Zuckerberg, whose fortunes are largely made up of unrealized capital gains in the companies they founded. Using the broader definition of income proposed by management, they are likely to pay less than 20% and owe the new tax.
Other people may have enough wealth to possibly be subject to the tax but not pay it. This could be the case for athletes, entertainers and executives who pay high income tax rates for their annual earnings. This may also apply to wealthy people who have recently inherited money and do not have significant unrealized capital gains.
The government’s budget proposal bypasses questions about Mr. Biden’s efforts on a broad package of climate, education and health care that Democrats have tried – and so far failed to pass – through Congress. Democrats are still in the early stages of renewing the package so that it can win the support of centrists such as Sen. Joe Manchin (D., W.Va.), who dissolved legislation in Parliament. the Senate 50-50.
Instead of proposing possible ways to review the bill, the White House budget generally echoes the Biden administration’s goals for the bill, citing a number of political ideas – including the free Community College – that died during the Democratic debate.
Government officials said they had fragmented ideas related to the economic bill away from the wider budget to allow Democrats in the Capitol to continue talking. While the White House has tried to create the financial account in order to reduce the deficit, the budget assumes that it will have no effect on the deficit.
“We were clear that the president wants to sign legislation that cuts costs for families and reduces the deficit, but to keep the budget conservative,” she said, adding that it would not affect the deficit, said Shalanda Young, director of the White House Office. Management and Budget.
The White House said Monday it expects inflation, which has been at a four-decade high, to begin to decline.
The budget predicts a sharp drop in the consumer price index both this year and next year. The index, which measures what Americans pay for everyday items, rose at an annual rate of 7.9% in February. The budget predicts that the index will increase by 4.7% in the calendar year 2022 and 2.3% in 2023. Cecilia Rouse, chairwoman of the White House Financial Advisory Board, noted that forecasts were completed in November, before the start of the year. Russia’s war in Ukraine.
“The situation in Ukraine” will have implications that are not reflected in our forecasts, “Rouse said. “The invasion is likely to put upward pressure on energy and food prices. “This in turn could boost inflation, which was already an issue before the invasion.”
The budget forecasts annual US GDP growth of 3.8% in 2022 and 2.5% in 2023, measured on a quarterly basis and adjusted for inflation. This is a more favorable outlook than that of the Federal Reserve, which more recently forecast annual GDP growth of 2.8% and 2.2% in 2022 and 2023, respectively.
—Rich Rubin, Gordon Lubold, and Nancy A. Youssef contributed to this article.
I write to you Amara Omeokwe at firstname.lastname@example.org and Andrew Duehren at email@example.com
Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
Biden’s budget calls for increase in defense spending, including funds for Ukraine
Source link Biden’s budget calls for increase in defense spending, including funds for Ukraine