Biden’s budget will reportedly cost $6 trillion while running a $1.3 trillion deficit over a decade

Joe Biden
President Joe Biden.

  • Biden’s budget will propose $6 trillion for fiscal year 2022, according to a New York Times report.
  • It will also run a $1.3 trillion deficit over a decade, which will be offset by corporate tax hikes.
  • This will mainly fund Biden’s infrastructure plan while leaving out campaign promises, like canceling student debt.
  • See more stories on Insider’s business page.

President Joe Biden’s first budget request will officially be unveiled on Friday, and the New York Times found that it will propose $6 trillion to help fund his major infrastructure spending plans.

On Thursday, the Times reported that the $6 trillion budget proposal for fiscal year 2022 will be accompanied by deficits of $1.3 trillion over the next decade, and it will also call for total spending to increase to $8.2 billion by 2031, according to obtained documents.

This would take the US to its highest federal spending levels since World War II, and it comes as Biden is lobbying for his $4 trillion infrastructure plan, which not only includes rebuilding physical infrastructure, but climate change initiatives and efforts to boost the middle class, as well. This budget proposal will help him do that.

The Times added that under Biden’s budget proposal, the federal deficit would hit $1.8 trillion in 2022, and it would recede slightly after that before growing to nearly $1.6 trillion by 2031. But his plans to fund infrastructure by corporate tax hikes and wealthy people would help shrink those deficits, despite Republicans firmly opposing those hikes.

Last week, Insider reported that issues that Biden campaigned on – like student debt forgiveness – will not be included in Friday’s budget proposal, based on information sources told The Washington Post, and health care promises, like lowering prescription drug costs, won’t be making the cut, either.

“The President’s budget will focus on advancing the historic legislative agenda he’s already put forward for this year,” Rob Friedlander, spokesman for the White House budget office, told the Post. “The budget won’t propose other new initiatives but will put together the full picture of how these proposals would advance economic growth and shared prosperity while also putting our country on a sound fiscal course.”

Biden also pledged to reform the unemployment insurance system when unveiling his American Families Plan, but that will reportedly not be in the budget, either. It will mainly focus on already proposed infrastructure investments, like education and climate change, and will likely not go too far beyond that for the time being.

However, this budget proposal requires congressional approval, so its fate rests at the hands of lawmakers. But given the course the infrastructure bill has taken so far, there will likely be disagreements on what will end up in the budget. For example, Democrats have been urging Biden to ditch negotiations with the GOP on infrastructure and pass a big spending bill while Republicans continue to counter Biden’s plan with a lower scope and size.

But Biden is still committed to bipartisanship, and whether his budget proposal gets bipartisan support remains to be seen.

White House Press Secretary Jen Psaki said last week that the negotiations were an art of a “different kind of a deal – a deal for the working people.”

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The US ran a record $1.9 trillion budget deficit from October to April, Treasury Department says

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Hackers appear to have stolen encryption keys used by the US government, compromising the email accounts of top offiicals at the Treasury Department.

  • The Treasury Department announced a record $1.9 trillion budget deficit in the first seven months of the fiscal year.
  • This was accompanied by a 22% increase in outlays, or personal spending, to a record $4.1 trillion.
  • Federal tax receipts of $2.1 trillion also hit a record for the seven-month period ending in April.
  • See more stories on Insider’s business page.

The US Department of Treasury announced on Wednesday that the US ran a $1.9 trillion budget deficit in the first seven months of the fiscal year – a record for that time frame.

As the country continued to recover from the pandemic, federal spending contributed to the budget deficit which marked a 30% increase from a year earlier. The department also found that outlays, or personal spending, rose 22%, to a record $4.1 trillion, which can be attributed to the government’s stimulus checks and extended unemployment benefits to aid Americans during the pandemic.

In addition, federal tax receipts also hit a record for the seven-month period ending in April, rising 16% to $2.1 trillion.

As the country continues to reopen, the US economy is likely to see a boost as more jobs are added to the labor market and spending increases. However, last week’s jobs report fell significantly short of expectations, adding just 266,000 despite economists’ prediction of at least 1 million, causing some businesses and lawmakers to cast the blame on government aid, like extended $300 weekly unemployment benefits, which they say disincentivizes people from returning to work.

But President Joe Biden, and his administration, are confident in the economy’s recovery.

“I think as we continue to move forward here, hopefully in the coming months we are going to see lots of those Americans who are looking for jobs, finding jobs, and I’ll be able to stand in front of this camera and talk about the great gains we’ve had,” Labor Secretary Marty Walsh said last week. “But I still think 266,000 jobs this month is a good number.”

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