Five major takeaways from the Biden budget request

Jacob Fischler — Mon, 11 Mar 2024 20:07:30 +0000

President Joe Biden in his fiscal 2025 budget request unveiled on Monday, March 11, 2024, outlined plans for an expanded child tax credit, a faster pace of implementation to allow Medicare to negotiate drug prices, strategies to lower college costs and more. In this photo, Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library on Feb. 21, 2024, in Culver City, California. (Photo by Mario Tama/Getty Images)

President Joe Biden’s budget request for fiscal 2025 would continue several administration goals to lower costs for most families while raising taxes on the wealthy and corporations, spend on climate initiatives and provide aid to U.S. partners abroad.

The $7.266 trillion budget request that calls for expanding the child tax credit, funding overseas partners and increasing taxes on the wealthy proposes several new or revamped programs. It will be up to Congress in the coming months to act on or reject Biden’s initiatives.

Here are five main takeaways from a fact sheet accompanying the budget:

Household costs

The budget calls for several policy changes and increases to social programs meant to bring down costs for most households.

Some of those provisions include:

Low-cost child care: The budget request proposes a new program to allow families that earn less than $200,000 guaranteed access to low-cost child care from birth to kindergarten. Consumer costs for the program would be on a sliding scale, with the families with the lowest incomes paying close to nothing.

The program would be available to more than 16 million children, with another 2 million served by increased funding for Child Care and Development Block Grants.

Expanded child tax credit: The request calls for restoring the child tax credit to the temporary level Congress set during the pandemic. The change would make 18 million low-income families eligible for a full tax credit, according to a White House fact sheet.

Housing: The budget would provide $258 billion to build or preserve more than 2 million housing units.

The plan allocates $1.3 billion for the Home Investment Partnerships Program, a state and local block grant program to construct and rehabilitate affordable housing.

The budget also calls for creating a new tax credit for first-time homebuyers and sellers. The $10,000 credit could be used by “middle-class families” buying their first home or selling their starter home.

College costs: The budget includes $12 billion “that will fund strategies to lower college costs for students,” according to the fact sheet.

Health care: The budget calls for increasing the pace of implementation for an Inflation Reduction Act provision to allow Medicare to negotiate drug prices. Democrats’ 2022 taxes, climate and policy law set a timeline for the federal government to negotiate prices of certain drugs. The budget proposal would speed up that timeline.

The same law capped the price of insulin at $35 per month for people on Medicare. During consideration of that law in August 2022, Republicans stripped a provision that would require the commercial market to use the same cap. Monday’s budget request calls for placing a cap on insulin obtained in the private sector.

The budget would also provide “Medicaid-like coverage” to people in states that have not adopted Medicaid expansion. It would also provide states that did expand Medicaid financial incentives to maintain those expansions.

Taxes

The budget seeks to lower the federal deficit, primarily by increasing taxes on the wealthy and some corporations. The proposed changes would make “the wealthy and large corporations pay their fair share,” the fact sheet said.

Reduce 2017 corporate tax cut: The budget calls for raising the corporate tax rate to 28%, splitting the difference between the 21% rate set in the 2017 tax law a Republican Congress passed during President Donald Trump’s term and the 35% rate that existed before that law.

Raise the corporate minimum tax: The budget would also increase the corporate minimum tax included in the Inflation Reduction Act from 15% to 21%.

“Billionaire” tax: The budget would seek to override loopholes and other tax provisions that allow the extremely wealthy to pay a lower effective tax rate than many working-class taxpayers by establishing a 25% minimum tax rate on people with wealth of more than $100 million.

Safety net

The budget includes a few provisions meant to strengthen the social safety net and provide protections for families.

Expanded family and medical leave: The budget would establish a 12-week minimum for eligible workers to take paid time off after the birth of a child, to care for a family member, recover from their own medical issue, adapt to a family member’s military deployment or “find safety from domestic violence, sexual assault or stalking.”

Sick leave: The budget also proposes requiring seven days of paid sick leave for all employees.

WIC: The proposal would “fully fund” the U.S. Agriculture Department’s Special Supplemental Nutrition Program for Women, Infants and Children, with $7.7 billion going toward the program. Secretary Tom Vilsack and others have warned for months that eligible families are at risk of losing access to WIC if funding is not increased. The proposed funding level would allow the program to grow from 6.2 million individuals in 2021 to 7 million.

Homelessness: The budget includes $4.1 billion for Homeless Assistance Grants to support about 1.2 million people experiencing homelessness.

Climate

Monday’s budget request includes new and continued funding to maintain a focus on climate initiatives.

Expand climate corps: The budget calls for expanding the American Climate Corps program that launched last year with 20,000 workers. Under the proposal, funding for the program would be made mandatory and the corps would expand to 50,000 workers by 2031.

Clean energy: The proposal calls for $1.6 billion for Department of Energy programs supporting renewable energy projects across the country. The funding would go toward retrofitting homes, manufacturing renewable energy components and supporting a more secure and reliable electric grid.

Climate resilience: The budget includes $23 billion for climate adaptation and resilience meant to address the increasingly severe droughts, floods, wildfires and other disasters associated with climate change.

Repeat supplemental request

After Republicans in the U.S. House rebuffed the administration’s October request for supplemental funding for Ukraine, Israel, Indo-Pacific regional partners and the U.S.-Mexico border, Biden included items from that request in Monday’s full-year budget request.

“The Budget includes, and therefore reiterates the need for, the unmet needs from the October supplemental request,” the fact sheet reads.

The renewed request includes:

$92 billion in foreign aid for Ukraine, Israel and Indo-Pacific partners such as Taiwan.

The funding for Israel, which is at war with Hamas in the Gaza Strip after a terrorist attack in October, also includes humanitarian aid for Palestinian civilians. The administration has come under increasing pressure from progressive Democrats to withhold military funding for Israel as civilian casualties mount in Gaza and basic supplies continue to be scarce.