Apple, Google, Amazon and Meta don't pay taxes in US. Why wouldn't IRS forst tax those mega corporations instead of citizens?
I can think of a few dozen reasons.Apple, Google, Amazon and Meta don't pay taxes in US. Why wouldn't IRS forst tax those mega corporations instead of citizens?
At his State of the Union address this year, President Biden celebrated the fact that his new climate and tax law would no longer allow some of America’s largest corporations to pay zero in federal taxes.
“Because of the law I signed, billion-dollar companies have to pay a minimum of 15 percent,” Mr. Biden said, referring to the Inflation Reduction Act of 2022. “God love them.”
The new corporate minimum tax was one of the most significant changes to the U.S. tax code in decades. Its logic rested on the idea that rich companies should not be able to find loopholes and other accounting maneuvers in order to pay lower tax rates than their workers.
But making the tax operational has become a mammoth challenge for the Biden administration, which has faced intense lobbying from industries that could be on the hook for billions of dollars in new taxes. Those groups have been flooding the Treasury Department with letters asking for lenient interpretations of the law and trying to create new loopholes before their tax bills come due next year. Republican lawmakers have been trying to repeal the law while Democrats such as Senator Elizabeth Warren of Massachusetts have been urging Treasury Secretary Janet L. Yellen to enforce it strictly.
The legislation, which passed with no Republican support, called for the corporate minimum tax to take effect in the 2023 tax year, meaning it will apply to corporate profits earned this year. But the tax was only loosely defined, and Treasury is still writing the rules that will determine how it is carried out.
The corporate minimum tax is entirely separate from the 15 percent “global minimum tax” that the Biden administration brokered with more than 140 nations in 2021. That agreement was aimed at stopping large multinational companies from seeking out tax havens and forcing them to pay more of their income to governments. While the deal is moving ahead in other nations, it continues to face obstacles in the United States, where Congress has been unable to ratify the agreement and allow the United States to comply with the global rules.
But Democrats were able last year to pass a domestic corporate minimum tax, which is a revival of a policy that was last employed in the 1980s. It captures tax revenue from companies that report a profit to shareholders on their financial statements, known as book income, while bulking up on deductions to whittle down their tax bills.
While the corporate tax rate stands at 21 percent, many large companies pay far less than that to the federal government. For years, big companies such as FedEx, Duke Energy and Nike have been able to take advantage of various deductions and tax strategies so that they effectively owe nothing in federal taxes. A 2021 report from the Institute on Taxation and Economic Policy found that 55 of the nation’s largest companies had paid no federal income tax the previous year.
An analysis by the Joint Committee on Taxation last year found that about 150 companies with tax rates below 15 percent would be subject to the new tax. Companies like Amazon and Berkshire Hathaway, which have had effective tax rates in the single digits in recent years, could face the biggest increases in their tax liabilities, according to a summary of research about the impact of the tax published by the Congressional Research Service.
At the Berkshire Hathaway annual meeting in May, Warren E. Buffett, the company’s chief executive, acknowledged that there was uncertainty over the new tax but said he did not oppose it.
“We can figure out ways, once we know the rules, where we will pay the 15 percent tax,” Mr. Buffett said.
While the tax is aimed at some of the largest companies, smaller businesses have also expressed concern that they could be swept into the new tax regime if the regulations are not sufficiently clarified.
In a comment letter to the Treasury Department and the Internal Revenue Service this year, CenterPoint Energy, a public utility company based in Texas, said it could be unfairly targeted because it had sold part of its gas pipeline and storage operation. Even though CenterPoint paid taxes on the sale, the gains could raise the company’s revenue enough to require it to pay additional money under the corporate alternative minimum tax.
“CenterPoint is neither a large corporation nor a corporation that did not pay its fair share but is being subjected to the C.A.M.T. as a result of transactions that reduced its business operations,” the company wrote. “The incongruity of the result is striking.”
The Treasury Department is expected to release the final rules for the tax before the end of the year. It already made concessions to the insurance industry, which raised concerns that the tax could upend its business model, and told companies that they would not be responsible for making quarterly tax payments related to the new minimum until all the regulations were clarified.
“Treasury is working to ensure that the biggest and most profitable corporations pay their fair share and that the corporate alternative minimum tax is workable and administrable,” said Ashley Schapitl, a Treasury spokeswoman.
The 15 percent minimum tax applies to corporations that report annual income of more than $1 billion to shareholders but reduced their effective tax rate well below the statutory 21 percent. It was projected to raise over $200 billion over a decade.
Businesses that might face the new tax have been spending heavily to shape its scope and minimize their exposure.
According to Accountable.US, a nonpartisan watchdog group, large financial firms and industry groups representing international conglomerates spent more than $1 million during the first half of this year lobbying Congress over the corporate minimum tax and a 1 percent stock buyback excise tax that was also included in the Inflation Reduction Act. Accountable.US described that as a “significant” amount since Republicans already oppose the provision.
Many sectors are bracing for the tax’s potential impact, but energy companies, the film industry, financial firms and foreign companies that operate in the United States are particularly concerned, according to a review of comment letters submitted to the federal government and corporate filings.
“We’re trying to figure out how to add up apples and oranges, if you will, to make sense of it,” said Nancy McLernon, president and chief executive of the Global Business Alliance, which represents international companies that have U.S. subsidiaries.
Ms. McLernon, whose organization has a working group trying to ensure that the new tax rules can work alongside international accounting standards, lamented that the measure had only made things more complicated for businesses that invested in the United States.
I.R.S. tax forms, which allow for an array of deductions, and financial statements shown to shareholders present different pictures of a company’s performance. Investors use a firm’s book income to get a clearer view of the health of a business; however, some analysts have suggested that companies may soon start to take steps to obscure that measure.
Big businesses that will be hit by the tax are now trying to figure out what kind of income will put them over the $1 billion threshold and what deductions they may be able to keep.
Socialist!Apple, Google, Amazon and Meta don't pay taxes in US. Why wouldn't IRS forst tax those mega corporations instead of citizens?
I would take guidance from theApple, Google, Amazon and Meta don't pay taxes in US. Why wouldn't IRS forst tax those mega corporations instead of citizens?
You can't reduce something below zero.Trump wants to reduce it further to 15% if re-elected.
There is, actually, one reason. Those companies are registered in offshore countries and operate in US. Until someone brings them back, they will pay no tax.I can think of a few dozen reasons.
I was obviously referring to the corporate tax rate. Let me spell it out for you: no, there’s not only one reason. Lowering the corporate tax rate further means even more corporations end up effectively paying zero in tax, too, because of tax deductions, credits, and exclusions and incentives. Offshoring profits is just one tool.You can't reduce something below zero.
There is, actually, one reason. Those companies are registered in offshore countries and operate in US. Until someone brings them back, they will pay no tax.
Have you noticed gas prices are rising? Get ready: you ain’t seen nothing yet.
The bloodthirsty leader of the Kingdom of Saudi Arabia loves his dictatorial soul-mate Donald Trump and is today setting the stage to intervene in November’s election in a big way, much like he did with a smaller test run during the fall of 2022 when he drove US gas prices up above $5, forcing President Biden to release oil from the US strategic petroleum reserve.
As Stanley Reed reported for the Business pages of The New York Times three days ago:
That “other state” would be their OPEC+ partner Russia, which also announced last weekend a simultaneous production cut of 471,000 barrels a day. Putin wants Trump back in the White House, too.“Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, said Sunday that it would extend [their one-million-barrels-a-day] cuts in oil production through June, noting that it was acting ‘in coordination with some’ other states.”
This time, though, because Trump refused to block the sale of America’s largest gasoline refinery to Saudi Arabia in 2017 (completed in 2019 with Trump’s blessing), no matter how much oil Biden releases from the reserves will be irrelevant: if the Saudis shut down their Port Arthur, Texas refinery this October “for maintenance,” US gasoline prices will explode.
It’s the largest refinery in America, as Foreign Policy magazine noted in May 2017:
That alone is enough to radically swing gasoline prices in the US.“Port Arthur, referred to as the ‘crown jewel’ of U.S. refinery infrastructure, can process 600,000 barrels of oil a day.”
So, get ready: it’s coming this fall. And unless the administration acts quickly, there will be nothing they can do about it. Gas at $6 a gallon could easily throw the election to Trump, as Biden will take the blame (just like in November 2022) and Fox “News” and rightwing hate media will hang gas prices around his neck like a flaming tire.
MBS and his sovereign wealth fund have funneled literally billions of dollars into the Trump family, between Jared’s investment company and Trump’s golf courses and the LIV Tour, in addition to giving Trump himself additional hundreds of millions over the years renting and purchasing Trump properties.
During Trump’s presidency, MBS funneled additional millions directly into the Trump family’s pockets via Trump’s DC hotel and NYC properties in clear violation of the Emoluments Clause of the US Constitution.
In exchange, Trump broke with the US tradition of new presidents visiting democratic allies and made Saudi Arabia his first overseas destination, blowing away congressional concern about MBS having ordered the brutal murder and dismemberment of Washington Post journalist Jamal Khashoggi and elevating the international status of that country beyond anything ever done by any US president.
Trump followed that up by organizing a 2019 sale of $8.1 billion in US weaponry in clear violation of US law (such sales require congressional approval). When the Senate voted to block the sale, Trump killed their effort. As Frontline noted in a July 2019 report:
When Saudi Arabia and Russia tried to screw Biden and the Democrats by cutting oil production — in October leading up to the midterm 2022 elections — President Biden was furious. Russell Baker wrote about it for The New York Times on October 11, 2022:“Both chambers have registered their disapproval of the emergency declaration — the Senate voted to block the sale in June. President Trump, however, has pledged to shoot down the measure when it arrives at his desk.”
“President Biden vowed on Tuesday to impose ‘consequences’ on Saudi Arabia for teaming up with Russia to cut oil production, signaling a rupture in the relationship between two longtime allies and a reversal of his own effort to cultivate the energy-rich kingdom.“Amid deep anger over last week’s decision by the Saudi-led OPEC Plus, Mr. Biden’s staff announced that he would re-evaluate the entire relationship with Saudi Arabia and expressed openness to retaliatory measures offered by congressional Democrats such as curbing arms sales or permitting legal action against the cartel.Weighing in for Democratic Senate leadership, Illinois Senator Dick Durban added on an October, 2022 CNN appearance:“‘There’s going to be some consequences for what they’ve done with Russia,’ Mr. Biden told CNN’s Jake Tapper in an interview broadcast on Tuesday night.”
The Saudis are well aware of the power of gas prices over US politics. Retired Saudi Oil Ministry Adviser Ibrahim Al-Muhanna wrote in his book Oil Leaders: An Insider’s Account of Four Decades of Saudi Arabia and OPEC's Global Energy Policy:“Let’s be very candid about this. It’s Putin and Saudi Arabia against the United States.”
“During the midterm election in 2018, President Trump pushed for lower oil prices—meaning gasoline—and he succeeded, but he used completely different methods. In the middle of June 2018, the oil price was about $75 and the gasoline price in the United States was more than $3.50 in some states. Trump was worried that the Republican Party might lose the majority in both houses of Congress. …For reference, Saudi oil production right now is standing at around 9 million barrels a day, and they just announced a million-barrel-a-day production cut to kick in this summer/fall just in time for the presidential election.“The OPEC+ group, led by Saudi Arabia and Russia, decided in June 2018 to increase their production by 1.2 MBD. Saudi Arabian production in November rose to more than 11.3 MBD, its highest ever.”
So, what can President Biden do?
One step would be to nationalize the Port Arthur refinery, the “crown jewel” essential to US energy security that never should have been sold to a foreign nation. I’ve written extensively about the process of nationalization here and here, but it would require congressional approval and would probably take more time than Biden has before the November election.
Nonetheless, it would be a shot across the bow of Saudi Arabia and may get their attention sufficiently to stop their intended manipulation of US gas prices this fall. And it’s the right thing to do, even if it takes a year or more.
Another would be to take America back to the oil export policy that was put into place during the Nixon administration, prohibiting the export of any US crude petroleum products. US oil production is higher today than it’s ever been in history, and in 2019 America achieved technical energy independence, as noted by the US Energy Information Administration:
In 1973, at the height of the Arab Oil Embargo, President Nixon and Congress put into law legislation that banned the export of US crude. It stood until December, 2015, when Congress and President Obama, under pressure (bribes legalized by 5 Republicans on the Supreme Court) from the fossil fuel industry, repealed the ban.
American oil companies are currently exporting a bit over 4 million barrels a day, while we’re only importing around 900,000 barrels a day from Saudi Arabia and 290,000 barrels a day from Russia (yes, it sounds wacky). Ending exports would cut the tie between US oil prices and Saudi and Russian production. (Which only leaves that Port Arthur, Texas refinery owned by the Saudis as the weak link MBS could use to manipulate US elections via gas prices.)
While it would be challenged in court, there are emergency powers the president has that may allow him to reinstate that ban, at least temporarily, by executive order. Both The Wall Street Journal and the Financial Timeshave argued in editorials that banning exports and lifting such a ban are both within the president’s powers.
Finally, President Biden could get ahead of the Saudis and Putin by exposing what they’re up to. They increased production (lowering US gas prices) in 2018 to help Trump and the Republicans in that year’s midterm elections, and cut production (raising US gas prices) in 2022 to hurt Biden and the Democrats in those midterms. Arguably, they got a Republican-controlled House of Representatives out of that effort.
Most Americans are probably unaware of this, and letting them know how our system is being manipulated by these two malevolent foreign powers would take some of the political sting out of the high gas prices that we can expect to see this fall.
And even if Biden chooses not to engage in this kind of public and high-stakes brinkmanship with MBS and Putin, you and I can. Tell everybody you know what’s happening and how we can expect it to play out: it may well begin to bleed through to the mainstream media if enough of us raise hell.
WASHINGTON (AP) — America’s employers delivered another healthy month of hiring in February, adding a surprising 275,000 jobs and again showcasing the U.S. economy’s resilience in the face of high interest rates.
Last month’s job growth marked an increase from a revised gain of 229,000 jobs in January. At the same time, the unemployment rate ticked up two-tenths of a point in February to a still-low 3.9%. Though that marks the highest rate in two years, it was the 25th straight month in which joblessness has remained below 4%.
Friday’s report also drastically revised down the government’s estimate of hiring in December and January from what had been blockbuster increases to still-solid gains.
The jobs report also gave the inflation fighters at the Federal Reserve what could be a dose of encouraging news: Average hourly wages rose just 0.1% from January and 4.3% from a year earlier, less than economists had expected. Average pay growth has been exceeding inflation for more than year, but when it rises too fast it can feed inflation.
Friday’s figures reflected the job market’s sustained ability to withstand the 11 rate hikes the Fed imposed in its drive against inflation, which made borrowing much costlier for households and businesses. Employers have continued to hire briskly to meet steady demand from consumers across the economy.
Yet despite sharply lower inflation, a healthy job market and a record-high stock market, many Americans say they are unhappy with the state of the economy — a sentiment that is sure to weigh on President Joe Biden’s bid for re-election. Many voters blame Biden for the surge in consumer prices that began in 2021. Though inflationary pressures have significantly eased, average prices remain about 17% above where they stood three years ago.
When the Fed began aggressively raising rates in March 2022 to fight the worst bout of inflation in four decades, a painful recession was widely predicted, with waves of layoffs and high unemployment. The Fed boosted its benchmark rate to the highest level in more than two decades.
Inflation has eased, more or less steadily, in response: Consumer prices in January were up just 3.1% from a year earlier — way down from a year-over-year peak of 9.1% in 2022 and edging closer to the Fed’s 2% target.
Many Americans are exhibiting confidence in the economy through their actions: Consumers, whose average wages have outpaced inflation over the past year and who socked away money during the pandemic, have continued to spend and drive economic growth. The economy’s gross domestic product — the total output of goods and services — grew by a solid 2.5% last year, up from 1.9% in 2022. And employers keep hiring.
Immigration has helped invigorate the job market since the end of pandemic-related travel bans. Last year, foreign-born individuals accounted for 62%, or 1.5 million, of the 2.4 million people who either obtained a job or began looking for one. The economy’s growth depends on a steady influx of job seekers.
In the meantime, the job market’s modest slowdown is happening so far in perhaps the most painless way possible: Companies are posting slightly fewer job openings rather than laying people off. The number of Americans filing for weekly unemployment benefits — a rough proxy for the number of layoffs — has remained low, suggesting that most workers enjoy solid job security.
Wage growth still remains slightly high from the Fed’s perspective because it can contribute to inflation pressures. Some economists argue, though, that pay increases don’t need to drop so much: A surge in productivity that started last year — as companies invested in machines and used their workers more efficiently — means that employers can pay more and still reap profits without raising prices.
from Wiki on the Glass-Steagall Act.
Really a good discussion but at around 24 minutes, I would love to have nitpicked about their use of 'banks'. The 2008 financial crash was not by banks that were under the Federal Reserve system, it was in the non-bank financial institutions that were flooding the market with cash through their NINJA loans and other bullshit that ended up with anyone getting huge lines credit for nothing. The banks actually were the ones that bailed them out and we got paid for it.
That bit took decades for them to pick at like vultures playing Jenga with our economic safeguards. They have been picking at the ones put in place after the 2008 meltdown too. Got to give it to those bastards, they are persistent, but I guess when you have enough money to consider how to spend it over entire lifetimes it's easier to have long game gambles pay off when they can capitalize on others suffering.from Wiki on the Glass-Steagall Act.
Some commentators have stated that the GLBA's repeal of the affiliation restrictions of the Glass–Steagall Act was an important cause of the financial crisis of 2007–2008. Nobel Memorial Prize in Economics laureate Joseph Stiglitz argued that the effect of the repeal was "indirect": "[w]hen repeal of Glass-Steagall brought investment and commercial banks together, the investment-bank culture came out on top".[10][11]
WASHINGTON (AP) — Consumer prices in the United States picked up last month, a sign that inflation remains a persistent challenge for the Federal Reserve and for President Joe Biden’s re-election campaign, both of which are counting on a steady easing of price pressures this year.
Prices rose 0.4% from January to February, higher than the previous month’s figure of 0.3%, the Labor Department said Tuesday. Compared with a year earlier, consumer prices rose 3.2% last month, above January’s 3.1% annual pace.
Excluding volatile food and energy prices, so-called “core” prices also climbed 0.4% from January to February, matching the previous month’s rise and a faster pace than is consistent with the Fed’s 2% target. Core inflation is watched especially closely because it typically provides a better read of where inflation is likely headed.
“It’s a disappointment, but not a disaster,” said Eric Winograd, U.S. economist at asset manager AB. “The underlying details are more encouraging than the top-line number, which was boosted by a few volatile categories — the type of prices that tend not to repeat month-to-month.”
Those volatile items include gas prices, which jumped 3.8% just from January to February but are still below their level of a year ago. Air fares surged 3.6% after two months of much smaller increases. Clothing prices rose 0.6% after three months of declines but are unchanged compared with a year earlier.
Housing and rental costs, though, which tend to change more slowly, cooled in February: They rose 0.4% from January, slower than the 0.6% increase the previous month. Measures of new apartment leases, which have cooled, will likely feed into the government’s inflation data in the coming months.
New car prices ticked down 0.1% in February. Though these prices remain much higher than they were before the pandemic, they’re expected to decline further as more vehicles show up on dealer lots.
Grocery prices were unchanged last month and are up just 1% from a year earlier.
Despite February’s elevated figures, most economists expect inflation to continue slowly declining this year. At the same time, the uptick last month may underscore the Fed’s cautious approach toward interest rate cuts.
Overall inflation has plummeted from a peak of 9.1% in June 2022, though it’s now easing more slowly than it did last spring and summer. The prices of some goods, from appliances to furniture to used cars, are actually falling after clogged supply chains during the pandemic had sent prices soaring higher. There are more new cars on dealer lots and electronics on store shelves.
By contrast, prices for dental care, car repairs, and other services are still rising faster than they did before the pandemic. Car insurance has shot higher, reflecting rising costs for repairs and replacement. And after having sharply raised pay for nurses and other in-demand staff, hospitals are passing their higher wage costs on to patients in the form of higher prices.
Voter perceptions of inflation are sure to occupy a central place in this year’s presidential election. Despite a healthy job market and a record-high stock market, polls show that many Americans blame Biden for the surge in consumer prices that began in 2021. Though inflationary pressures have significantly eased, average prices remain about far above where they stood three years ago.
In his State of the Union speech last week, Biden highlighted steps he has taken to reduce costs, like capping the price of insulin for Medicare patients. The president also criticized many large companies for engaging in “price gouging” and so-called “shrinkflation,” in which a company shrinks the amount of product inside a package rather than raising the price.
“Too many corporations raise prices to pad their profits, charging more and more for less and less,” Biden said.
Fed Chair Jerome Powell signaled in congressional testimony last week that the central bank is getting closer to cutting rates. After meeting in January, Fed officials said in a statement that they needed “greater confidence” that inflation was steadily falling to their 2% target level. Since then, several of the Fed’s policymakers have said they believe prices will keep declining. One reason, they suggested, is that consumers are increasingly pushing back against higher prices by seeking out cheaper alternatives.
Most economists expect the Fed’s first rate cut to occur in June, though May is also possible. When the Fed cuts its benchmark rate, over time it reduces borrowing costs for mortgages, car loans, credit cards and business loans.
One factor that could keep inflation elevated is the still-healthy economy. Though most economists had expected a recession to occur last year, hiring and growth were strong and remain healthy. The economy expanded 2.5% last year and could grow at about the same pace in the first three months of this year, according to the Federal Reserve’s Atlanta branch.
Last week, the Labor Department said employers added a robust 275,000 jobs in February, the latest in a streak of solid hiring gains, and the unemployment rate stayed below 4% for the 25th straight month. That is the longest such streak since the 1960s.
Still, the unemployment rate rose from 3.7% to 3.9%, and wage growth slowed. Both trends could make the Fed feel more confident that the economy is cooling, which could help keep inflation falling and lead the central bank to begin cutting rates.
MANCHESTER, N.H. (AP) — President Joe Biden on Monday released a budget proposal aimed at getting voters’ attention: It would offer tax breaks for families, lower health care costs, smaller deficits and higher taxes on the wealthy and corporations.
Unlikely to pass the House and Senate to become law, the proposal for fiscal 2025 is an election year blueprint about what the future could hold if Biden and enough of his fellow Democrats win in November. The president and his aides previewed parts of his budget going into last week’s State of the Union address, and they provided the fine print on Monday.
If the Biden budget became law, deficits could be pruned $3 trillion over a decade. It would raise tax revenues by a total of $4.9 trillion over that period and use roughly $1.9 trillion to fund various programs, with the rest going to deficit reduction.
The president traveled Monday to Manchester, New Hampshire, where he called on Congress to apply his $2,000 cap on drug costs and $35 insulin to everyone, not just people who have Medicare. He also advocated for making permanent some protections in the Affordable Care Act that are set to expire next year.
“I’m here in New Hampshire to talk about the budget I released today that would, I think, help in a big way,” Biden said.
Biden aides said their budget was realistic and detailed while rival measures from Republicans were not financially viable.
“Congressional Republicans don’t tell you what they cut, who they harm,” White House budget director Shalanda Young said. “The president is transparent.”
House Speaker Mike Johnson, R-La., issued a joint statement with other GOP leaders calling the Biden proposal a “glaring reminder of this Administration’s insatiable appetite for reckless spending.”
“Biden’s budget doesn’t just miss the mark — it is a roadmap to accelerate America’s decline,” the House Republican leaders said.
Under the proposal, the government would spend $7.3 trillion next fiscal year and borrow $1.8 trillion to cover the shortfall from tax receipts. Biden’s 188-page plan covers a decade’s worth of spending, taxes and debt.
Parents could get an increased child tax credit in 2025, as payments would return briefly to the 2021 level funded by Biden’s coronavirus pandemic relief package. Homebuyers could get a tax credit worth up to $10,000 and the plan includes $10 billion in down payment aid for first-generation buyers. Corporate taxes would jump upward, while billionaires would be charged a minimum tax of 25%.
Biden said in his State of the Union that Medicare should have the ability to negotiate prices on 500 prescription drugs, which could save $200 billion over 10 years. Aides said his budget does not specify how many drug prices would be subject to negotiations.
Biden’s plan would permanently keep Medicare solvent, according to aides, but as noted by Maya MacGuineas, president of the fiscal group Committee for a Responsible Federal Budget, it does not appear to fix Social Security, which projections say will be unable to pay full benefits starting in 2033.
The proposal would provide about $900 billion for defense in fiscal 2025, about $16 billion more than the baseline.
The Biden administration is still seeking money to help Ukraine defend itself against Russia and aid for Israel. His budget plan reiterates the supplemental funding request made last October for Ukraine, Israel and humanitarian relief for Palestinians.
It’s also requesting funding to expand personnel and resources at the U.S. southern border. Still, military spending over 10 years would decline $146 billion to $9.57 trillion.
One key theme in the budget plan is an effort to help families afford their basic needs, as the impact of inflation hitting a four-decade high in 2022 continues to leave many voters feeling as though they’re worse off under Biden.
The budget proposal includes $258 billion to help build or preserve 2 million homes, helping to address a national shortage that has kept housing prices high. Parents making under $200,000 annually would have access to child care, with most eligible families paying no more than $10 a day.
It would eliminate origination fees on government student loans, possibly saving borrowers $1,000 over the life of the debt. It also includes $12 billion to help universities develop strategies for reducing their costs.
All of this is a chance for Biden to try to define the race on his preferred terms, just as the all-but-certain Republican nominee, Donald Trump, wants to rally voters around his agenda.
Trump, for his part, would like to increase tariffs and pump out gushers of oil. He called for a “second phase” of tax cuts as parts of his 2017 overhaul of the income tax code would expire after 2025. The Republican has also said he would slash government regulations. He has also pledged to pay down the national debt, though it’s unclear how without him detailing severe spending cuts.
In a Monday interview with CNBC, Trump indicated that he would be willing to reduce spending for Social Security, Medicare and Medicaid, though he did not offer a full policy.
“There is a lot you can do in terms of entitlements, in terms of cutting,” Trump said.
The interview drew Biden’s attention, prompting him to tell the audience in New Hampshire that cuts were off the table: “The bottom line is he’s still at it. I’m never going to allow that to happen.”
House Republicans on Thursday voted their own budget resolution for the next fiscal year out of committee, saying it would trim deficits by $14 trillion over 10 years. But their measure would depend on rosy economic forecasts and sharp spending cuts, reducing $8.7 trillion in Medicare and Medicaid expenditures. Biden has pledged to stop any cuts to Medicare.
Meanwhile, Congress is still working on a budget for the current fiscal year. On Saturday, Biden signed into law a $460 billion package to avoid a shutdown of several federal agencies, but lawmakers are only about halfway through addressing spending for this fiscal year.