Published in:
Social promises and taxes for the rich: the American president, Joe Biden, presented this Thursday (9) a budget project with the air of a campaign program for 2024, in which the strongest measures, however, have little or no chance to get past the congressional hurdle.
The 2024 budget plans to reduce the deficit by nearly $3 trillion over 10 years, the White House announced. For this, Biden wants to introduce a minimum tax of 25% for billionaires, that is, for the richest 0.01% of Americans.
The Democrat also wants to increase the corporate tax rate from the current 21% to 28%, but still below the 35% that prevailed before the reform of former President Donald Trump, in 2017.
At the same time, Biden intends to reduce some expenses considered “unnecessary”, targeting in particular “Big Pharma”, that is, the pharmaceutical sector, and “Big Oil”, the oil industry.
“My budget will ask the rich to pay their fair share so that the millions of workers who helped build that wealth can retire with the health insurance they paid for,” he tweeted on Wednesday night.
When Medicare was passed, the wealthiest 1% didn’t have more than 5x the wealth of the bottom 50% combined. Let’s ask the wealthiest to pay their fair share so the millions of workers who helped them build that wealth can retire with dignity and the Medicare they paid into.
— Joe Biden (@JoeBiden) March 8, 2023
political impulse
In this exercise as austere as possible in the presentation of the budget, the American president hopes to find an additional political impetus. The 80-year-old Democrat – who officially only “intends” to run again in 2024, but already appears to be campaigning – will outline his plan in the early afternoon in Philadelphia, Pennsylvania, a strategic state from an electoral point of view.
However, he has no illusions about the ability to carry out his proposals: since the beginning of the year, Biden has only controlled the Senate. The other chamber of Congress (the House of Representatives) is now dominated by Republicans, who are determined not to pass up any tax increases.
With this additional income, Joe Biden estimates that he will be able, as he promised on Wednesday, to ensure for another 25 years the financing of a health plan that benefits Americans over 65, “Medicare”, and this without affecting benefits. .
But he also intends to increase the salaries of federal civil servants by more than 5%, says the Washington Post.
“Almost $3 trillion in 10 years”
All this, as the White House assured this Thursday, by reducing the federal deficit by “nearly $ 3 trillion over the next ten years”, while Republicans regularly accuse the president of letting spending slip.
“A budget is a reflection of our values,” tweeted Joe Biden on Wednesday.
It is also, in this case, a political weapon. The Democrat is trying, with his proposals, to embarrass the Republican Party, which calls for more budget rigor, but so far he has not explained exactly which expenses he intended to cut.
Biden is therefore happy to constantly accuse the right of wanting to undermine social systems like Medicare – which conservatives defend against.
This budget presentation comes in the context of a stalemate between Democrats and Republicans over another financial issue, closer to the 2024 election: the so-called “debt ceiling increase”.
$31.4 trillion debt
The United States, the only industrialized power to follow this model, must regularly increase, via Congressional vote, the government’s debt capacity. This vote, however, which has long been a formality, is increasingly politicized.
The head of the House of Representatives, Republican Kevin McCarthy, guarantees that his troops will not vote to raise the debt ceiling while Joe Biden does not curb public spending.
The Democratic president, for his part, has refused to negotiate so far, arguing that the debt accumulated over the years by the country is a shared responsibility.
The stakes are not small: if the stalemate continues too long, the United States would be under threat of an unprecedented default on payments starting in July. The debt of the world’s largest economy reached US$31.4 trillion on January 19, the ceiling above which the country can no longer issue new loans to finance itself and, therefore, can no longer honor its payments.
Temporary emergency measures were taken to continue honoring payments.
(With information from AFP)