President Joe Biden released his 2024 budget on Thursday, which proposes a range of tax hikes and sparked pushback from critics. The White House stated that the budget would cut deficits by nearly $3 trillion over the next decade. However, critics argue that despite the cuts, the national debt is still soaring and projected to surpass $50 trillion in the next decade.
The Committee for a Responsible Federal Budget stated that despite Biden’s claims, U.S. Gross Domestic Product (GDP) would increase from 98% at the end of this year to a record 110% by 2033. “The President’s budget would borrow $19 trillion through 2033 and increase the debt-to-GDP ratio from 98 percent at the end of 2023 to 110 percent by 2033, past the record set in this nation just after WWII,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
Biden’s budget includes several proposed tax increases, including a minimum 25% tax on anyone with more than $100 million, an increase in the top marginal income tax rate to 39.6%, a hike in the corporate tax rate from 21% to 28%, a billionaire’s tax, and more. Small businesses raised alarm about the higher tax rates, with Karen Kerrigan, SBE Council president and CEO, stating that “President Biden’s tax increases will hit small to mid-size businesses.”
Republicans also leveled criticism at Biden’s budget, with House Speaker Kevin McCarthy calling it “completely unserious” and proposing trillions in new taxes that American families would pay directly or through higher costs. Democrats, on the other hand, defended the budget, pointing to the reduced deficits and spending proposals to help Americans.
The proposed budget comes as Congress faces a looming debt ceiling deadline. Lawmakers must raise the debt ceiling or default on U.S. debt obligations, an unprecedented occurrence that would send shockwaves through the global economy. Republicans want to use the coming cliff to negotiate, but Biden has said he will not negotiate.
Overall, Biden’s budget proposal is seen as a guidepost to set priorities for his agenda, as there is little hope the budget will be accepted wholesale.