Biden releases budget plan with new taxes, more deficit spending

As an awkward reminder that Congress still has not agreed on this year’s government spending, President Joe Biden released his 2025 federal budget proposal on Monday and was promptly slammed by Republicans.

The budget calls for an 18 percent increase over last year’s spending levels while also proposing a Medicare tax hike of 3.8 percent on earned and unearned income for taxpayers making more than $400,000 annually. The tax would grow the government’s annual revenue to just over $7.2 trillion but leave an estimated $1.7 trillion deficit.

In its budget announcement, the White House highlighted the changes to how the government funds Social Security.

“The president’s budget extends the life of the Medicare Hospital Insurance Trust Fund permanently and reinforces the president’s commitment to protect Social Security and work with Congress to strengthen the program for the long haul, including by asking the highest-income Americans to pay their fair share—while rejecting all proposals to cut benefits,” the announcement read.

Biden’s plan would increase spending in virtually every area of government. It calls for a $17.5 billion funding hike for the Federal Aviation Administration, an additional $1.2 billion for microchip development, and $10.7 billion in renewable energy research and development allotted to NASA, the Department of Defense, and other agencies, alongside a slew of other spending proposals.

U.S. House Speaker Mike Johnson, R-La., didn’t waste time in slamming the proposal.

“The price tag of President Biden’s proposed budget is yet another glaring reminder of this administration’s insatiable appetite for reckless spending and the Democrats’ disregard for fiscal responsibility,” Johnson wrote. “Biden’s budget doesn’t just miss the mark—it’s a roadmap to accelerate America’s decline.”

The budget proposal comes as Congress—and especially the House of Representatives—is laboring to agree on spending for 2024. For months, Johnson and Democratic leaders have gone back and forth over the 12 appropriations bills needed to fund the government.

Last week, the House passed six of those bills, leaving another six to approve to avoid a partial government shutdown that would start on March 22.

On its own, the president’s budget has no binding power. Instead, it provides a starting point for negotiations with Congress. Republicans also unveiled their own version of a spending plan last week. In a 19-15 vote, Republicans in the Budget Committee voted to advance a 10-year plan to fund the government and balance the budget. According to a summary, the plan would slash deficits by $14 trillion, lower interest payments on debt by $2.7 trillion, and create a $44 billion budget surplus by the fiscal year 2034.

“What I’m very excited about and anxious to do is turn the page on FY24 and get immediately into FY2025 to do everything we can to get that job done by the end of summer,” Johnson said in a press conference at the end of February.

The Republican plan takes a nearly opposite approach to Biden’s budget. It would cap increases to the country’s “mandatory” spending on entitlement programs such as Social Security benefits at $15 billion in any given year. Mandatory spending currently accounts for two-thirds of overall government spending.

Former President Donald Trump has avoided directly stating he would make changes to Social Security benefits if reelected in 2024, but he has hinted that he might support a spending plan that trims waste hidden in the sums of the country’s entitlement programs.

“There is a lot you can do in terms of entitlements, in terms of cutting and in terms of also the theft and bad management of entitlements,” Trump told CNBC. “There’s tremendous amounts of things and numbers of things you can do.”