Every budget proposal is a roadmap , a political document that reads like an exercise in aspirations. The one presented this Friday by the president of the United States, Joe Biden, marks as a destination a socially and economically fairer and less unequal country, updated in infrastructures , committed to the fight against climate change and willing to maintain its strength and competitiveness against other nations
The accounts for fiscal year 2022 that starts on October 1 and that the Democrat has sent to Congress contemplate a spending of six billion dollars , a sustained federal investment unparalleled in the United States since World War II and that would rise to 8, 2 trillion dollars in 2031.
They are now launching a complex and long process of negotiations in the Chambers, where it can be taken for granted that the proposed items will be transformed, reduced or even disappear .
They will do so especially in the face of the challenges and resistance of Republicans , now worried about inflation and opposed to the large expansion of spending due to the increase in the deficit (up to 1.3 trillion per year the next decade) and the debt (which would reach 117 % of the value of the economy by 2031). But the Democrat will also have to fine tune to negotiate and convince moderates from his own party .
For now, in any case, the budget proposal serves to underline Biden’s ambitious agenda and priorities , which proposes to take advantage of the moment when the United States emerges from the crisis caused by the pandemic to expand the size and scope of the federal government.
And it is built on two foundations: the proposal of its infrastructure plan and the one for families and workers with which it proposes to expand the welfare state with social, educational, health and economic programs, including investments for maternity or paternity leave or for preschool care.
“It is a statement of values that defines the best of our nation, ” Biden wrote in the document sent to Congress. “It reflects the fact that the idea of trickle-down economics has never worked and that the best way to grow our economy is not from top to bottom but from bottom to top and from the center out .”
Social programs and taxes
More than half of the mammoth budget proposal goes to cover mandatory expenses that the Government, whoever is in the White House, must face, including those of Social Security and Medicare and Medicaid, the two assistance programs public health.
Of the rest, the majority, 1.52 trillion exactly, are allocated to defense (whose budget would rise by 1.7% but would also represent a smaller percentage in the economy) and national programs of, for example, education, health, research and renewable energy.
To finance the proposed spending, Biden relies on a project to raise taxes on corporations, capital goods and the highest incomes , one of the areas where, in addition to the Republican opposition, he will have to face reluctance from moderate Democrats.
And the first criticisms began to arrive on Thursday, when ‘The New York Times’ advanced the content of the budget proposal and it was learned that it assumes that the tax cuts that Donald Trump approved for middle and low incomes will expire, as is expected, in 2026. Republicans immediately accused the president of breaking his promise that he would not raise taxes on the most discreet incomes.
Biden’s accounts also include an analysis of the economic situation and perspectives on inflation, employment and growth, and in the numbers beats the conviction of his Administration that the fiscal situation is manageable.
Faced with voices warning of rising prices (which grew 3.6% in April, the fastest pace in 13 years), the Biden Administration believes that inflation pressure is a temporary problem and estimates that it will not rise. faster than 2.3%. It also estimates that unemployment will fall to 4.1% in 2022 and will remain below 4% during the next decade. It also includes a growth estimate of 5.2% this year, 4.3% in 2022 and between 1.8 and 2% for the rest of the decade.