The president of the United States, Joe Biden, has devised budgets for 2024 with a marked electoral imprint aimed at a very specific audience, the working class. Biden, who has not yet officially announced his candidacy for re-election, plans to present his public accounts proposal for the next fiscal year in Philadelphia (Pennsylvania) this Thursday, a strategic state at the polls. The roadmap for this project, full of social promises, plans to reduce the deficit by three trillion dollars (2.8 trillion euros) over the next decade, one trillion more than what was indicated by the president in his speech on the state of the Union, a month ago. The Democrat wants to tax big corporations and the highest incomes to save Medicare, the federal health insurance program, through a minimum tax of 25% for billionaires and almost double in the rate of capital gains. The corporate tax would go from 21% to 28%, to finance programs that have “wide support and are in the target of Republicans, such as Social Security and the aforementioned Medicare,” the White House detailed in a statement.
The ambitious proposal, with an amount of 6.8 trillion dollars and which also contemplates a notable increase in the Defense budget, is a draft, but also an electoral program, because its main measures have no chance of advancing in Congress by the announced opposition of the Republicans, who have controlled the House of Representatives since the mid-term elections; for them, raising taxes on the rich is anathema. The minority leader in the Senate, the Republican Mitch McConnell – hospitalized this Thursday after a fall in a Washington hotel – has already predicted that the plan “will not see the light of day”. With the Government at risk of default, the Conservatives are demanding severe cuts in federal spending to agree to raise the Government’s legal debt limit, known as the debt ceiling, and thus avoid the recurring threat of closure of the Administration. The Republicans have not presented any counterproposals so far and refer to the spring to make their plans known.
Given the short cycles of the US system, Biden has been in pre-election mode for months, throughout which he has been reeling off some of the main lines of these budgets for 2024 (the new fiscal year begins on October 1). According to the president, the rich must pay “the fair share” that corresponds to them in a theoretically distributive system. “No millionaire should pay less taxes than a firefighter,” he recalled this Monday. It is not the first time that the Democratic White House has announced an increase in the tax burden on corporations and the highest incomes, but what has changed has been the balance of power in Congress.
Biden’s proposal is “like a declaration of intent,” White House press secretary Karine Jean-Pierre said Wednesday. “It’s something that shows the American people that we take it very seriously when we think about fiscal responsibility, when we think about how we move forward.” The guidelines represent a continuation of the Democratic Administration’s policy during the first two years of its mandate: a commitment to local industry (the program Made in America) to revitalize broad sections of the population depressed by the 2008 crisis and, later, by the pandemic. “Invest in America, reduce costs and taxes for working families, and protect and strengthen Medicare and Social Security,” the White House announcement reiterates. The plan also proposes to cut subsidies and fiscal benefits to the oil companies and to convince the Big Pharmathe big pharmaceutical companies, that they lower the price of their medicines, “the highest in any developed country”, as Biden denounced again on Sunday in Selma.
More money for defense and 6 billion for Ukraine
Pennsylvania, the scenario chosen by the president for the official announcement, is a highly disputed territory, especially since in 2016 the old industrial belt of the State, with a majority of the white and working-class population, victim of the general closure of factories due to relocation, voted Donald Trump massively. With his new nod to the working and middle class, the leitmotiv of his term, Biden intends to reverse the 2017 tax cuts of then-President Trump, which benefited incomes above $400,000 a year, something that according to the White House increased the deficit by two trillion dollars. No increase will be applied to rents “below $400,000,” underlines the official announcement. With the surcharge on higher incomes, the White House aims to guarantee the solvency of Medicare beyond 2050.
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The ambitious objective of reducing the deficit and his commitment to the health program for people over 65 will clash with the claims of the Republicans, who demand a balanced budget, that is, without additional tax pressure on high incomes. Of the few known lines of his program so far, a cut in foreign aid stands out – with Ukraine theoretically in the spotlight – as well as shredding health care programs, subsidized food vouchers and spending on social housing.
With regard to Ukraine, the Democratic president has doubled his bet by asking Congress to approve a $6 billion game for Ukraine and to strengthen Washington’s alliance with NATO and its allies in Europe. The US has so far allocated a total of $80 billion in aid to Ukraine. Another 6,000 million would go to infrastructure in several Asian countries, to counteract the regional influence of China. As for the Defense Department, the White House aspires to a 3.2% increase in funding, with a total budget of $842 billion. For the State Department, on which numerous cooperation programs depend, Biden requests an 11% increase, up to 70.5 billion dollars.
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