- President Joe Biden’s new budget proposal contains three major red flags, according to experts who spoke with the DCNF.
- The raising of taxes, particularly as China lowers its own, will make the U.S. less competitive on the world stage, Stephen Moore, former economic adviser to President Donald Trump and current senior economist for FreedomWorks, told the DCNF.
- “We’re literally paying people not to work now,” Richard Stern, a senior policy analyst in the Grover M. Hermann Center for the Federal Budget at The Heritage Foundation, told the DCNF in regards to the amount of spending in the proposal.
- As Biden fails to get his agenda through Congress, much of the “leftist transformational” priorities have been worked into the budget, Stern explained.
President Joe Biden’s recently unveiled budget includes massive tax hikes, untrammeled government spending and “leftist” agendas, raising serious red flags, experts told the Daily Caller News Foundation.
The budget would raise the corporate tax rate to 28%, while the top income tax rate would rise to 39.6%. It includes 36 new tax hikes on American individuals and businesses, totaling roughly $2.5 trillion over the next decade, according to a review by the conservative Americans for Tax Reform (ATR).
“Workers bear about 70% of the cost of the corporate income tax, in the form of lower wages and fewer jobs,” Isabelle Morales, a policy communications specialist at ATR, told the Daily Caller News Foundation. “That’s not exactly what workers need right now.”
Morales noted the budget includes 11 new taxes on the American energy sector. “And that’s while Americans struggle to fill their gas tanks and the administration is begging foreign countries to sell us more oil,” she said.
A new 20% minimum tax would also be levied on households worth more than $100 million to address the “special treatment for the types of income that wealthy people enjoy” in the tax code.
Stephen Moore, former economic adviser to President Donald Trump and current senior economist for FreedomWorks, told the DCNF that the proposed budget would make the U.S. less competitive on the world stage as China takes steps to increase its power.
The Chinese Communist Party announced 2.5 trillion yuan ($393.3 billion) in tax cuts, making 2022 the fifth year the country has decreased taxes, Bloomberg reported. Cumulatively, the cuts add up to 9.7 trillion yuan, which is more than the 2017 Trump tax cuts, at the current exchange rate.
“China’s cutting their taxes and we’re raising them. How’s that going to make America more competitive against our chief adversary?” Moore said.
Out of the $2.5 trillion in new tax revenue projected, about $1.5 trillion will go towards new spending, Marc Goldwein, senior vice president of the Committee for a Responsible Federal Budget, a group that advocates lower deficits, told The Washington Post.
The budget includes roughly $1.6 trillion in domestic spending, distributed towards initiatives like anti-gun violence, affordable housing and climate change. It also includes a 10% increase in military spending amid Russia’s invasion of Ukraine.
“We’ve so vastly expanded …. Medicaid, unemployment benefits, food stamps … we’re literally paying people not to work now,” Moore told the DCNF. “And we’ve got to get back to work requirements. There’s no work requirements in any of these programs.”
“Irresponsible, pure disaster,” Richard Stern, a senior policy analyst in the Grover M. Hermann Center for the Federal Budget at The Heritage Foundation, a conservative think tank, said of the budget to the DCNF. “Inflation is too many dollars chasing too few goods and services. The enormous regulations and the enormous taxes of this budget would just constrain what we can produce.”
The budget does, however, include a proposal that would reduce the national deficit by roughly $1 trillion over the next decade through changes in the tax code.
“It was the previous administration whose reckless policies and mismanagement led to the record deficits,” Biden said at a news conference on Friday.
Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, told the DCNF she appreciated the attention towards deficit reduction, but questioned its feasibility.
“Even if it were realistic, we’d still be borrowing another 14 plus trillion dollars over the next decade under their budget and that’s just too much by any accounts,” she said. “And so, I know it’s not a problem by their making, but they need to do something to fix it.”
The budget includes a “reserve for legislation that reduces costs, expands productive capacity, and reforms the tax system,” which Morales said can only be assumed to be a “placeholder for Build Back Better.”
With many of Biden’s legislative priorities stalled in Congress, much of the budget is allocated to following through on liberal priorities, particularly climate change. About $45 billion is being allotted across the federal government to address the issue, an increase of $16.7 billion over 2021.
The budget would boost international climate spending by more than $11 billion, which would quadruple previous U.S. global green commitments. It also sets up a Low-Income Home Energy Assistance Program, setting aside $100 million to “electrify and decarbonize low-income homes,” with the goal of lowering energy costs and saving taxpayer dollars.
Morales accused the Biden administration of using climate spending as a “crutch for all that they’ve done to destroy oil and gas and other forms of energy here at home.”
The Department of Health and Human Services would receive $470 million towards advancing maternal health and health equity, in part by implementing “implicit bias training for healthcare providers.” The Department of Education allocates $100 million for a grant program that aims to “promote racial and socioeconomic diversity” in schools.
Funding for the Title X Family Planning program would increase by 40% from 2021, for a total of $400 million, in order to “improve overall access to vital reproductive and preventive health services and advance gender and health equity.”
“That’s money that goes, vast majority, to entities that perform abortions and help abortion providers,” Stern said. He criticized the budget proposal for the number of times it included words like “equity” and “gender,” used 75 and 43 times, respectively.
“It’s not a fiscal framework, it’s one of their leftist transformational … documents,” he said.
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