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Biden's $6.8 tn Budget faces hurdles in Congress as it proposes higher taxes on big biz
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IANS | 18 Mar, 2023
US President Joe Biden's $6.8 trillion budget is unlikely to pass muster
in the Republican-dominated House of Representatives as it proposes
higher taxes on big businesses and the rich and elite, even as the
Republicans are gridlocked with Democrats on the debt ceiling issue and
are demanding spending cuts.
Biden has asked the
Congress for funds worth trillions in new spending that's unlikely to go
through the Republican house even as he seeks to reduce deficits by
raising taxes on business houses and the rich and the elite, media
reports say.
Having lost the majority in the house in the 2022
midterm elections, his persistent arguments and even the White House
statement that monies would be spent on social welfare programmes and
deficit would be cut by $3 trillion over the next decade has not cut
much ice with the representative across the aisle.
A White House
statement said President Biden has long believed that we need to grow
the economy from the bottom up and middle out, not the top down. Biden's
economic strategy has produced historic progress for the American
people despite several odds and hurdles facing the economy, it said.
More
than 12 million jobs - more than what any President has created in a
four-year term - including 800,000 manufacturing jobs, have been added.
The unemployment rate has fallen to 3.4 per cent, the lowest in 54
years. The Black and Hispanic unemployment rates are near record lows.
The
President has given families more breathing room, cutting prescription
drug costs, health insurance premiums, and energy bills, while driving
the uninsured rate to historic lows. His plan is rebuilding America's
infrastructure, making the economy more competitive, investing in
American innovation and industries that will define the future, and
fuelling a manufacturing boom that is strengthening parts of the country
that have long been left behind while creating good jobs for workers,
including those without college degrees, the White House statement said.
President
Biden has cut the deficit by more than $1.7 trillion against his
predecessor who had raised it during his first two years in office.
Reforms he signed into law to take on Big Pharma, lower prescription
drug costs, and make the wealthy and large corporations pay their fair
share will reduce the deficit by hundreds of billions of dollars more
over the coming decade, it added.
The President's Budget details a
blueprint to build on this progress, deliver on the agenda he laid out
in his State of the Union, and finish the job: No one earning less than
$400,000 per year will pay a penny in new taxes. Meanwhile, the
New York Times outlined the reasons for why Biden's budget was unlikely
to come through the house as it contained some $5 trillion in proposed
tax increases on high earners and corporations over a decade, much of
which would offset new spending programmes aimed at the middle class and
the poor
Biden had laid out a $6.8 trillion budget that seeks to
enhance military spending and introduce a range of new social welfare
programmes while at the same, attempt to reduce future budget deficits.
This defied the Republicans' calls to scale back government spending
reasserting his economic vision before an expected re-election campaign
for a 2nd presidential run in 2024.
He firmly believes he can
stem the recurring debt burden from weighing on the economy while
expanding spending and protecting popular safety-net programmes - almost
entirely by asking companies and the wealthy to pay more in taxes.
Republicans think it's a specious argument and it won't work.
The
President had indeed succeeded in bringing down the deficit by $1.7
trillion over the past year, but is now alarmed that it has shown signs
of growing again in the 2024 fiscal year, to $1.8 trillion. The spurt
seems higher than even the Congressional Budget Office projections.
Servicing of the national debt is the main driver because as the Federal
Reserve raises interest rates to curb inflation and government launches
new programs, they will not be offset by tax increases in their first
year, economists say.
The Republicans and the Democrats are
already in a gridlock debate over the government breaching the threshold
limit for borrowing at $31.4 trillion and asking for the ceiling to be
raised. The house conservatives are in no mood to raise the limit unless
government vows sharp spending cuts. Given this scenario, the budget is
unlikely to go through past the Republicans, unless some cross the
floor.
Senator Charles E. Grassley of Iowa, the top Republican on
the Budget Committee, said Biden's spending blueprint was "an unserious
proposal" and will be treated as such by both parties in Congress. "The
budget plan is a road map for fiscal ruin," he said.
Biden's
budget proposals stand little chance of being legislated as Republicans
now control the House since November 2022. Media experts however
perceive Biden's budget as a political statement of values aimed at
winning public opinion amid the debt-limit fight and a nascent 2024
campaign.
Key takeaways from his Biden's budget, according to the Times are:
Recapturing
a Centrist Identity: The aim is to curb the budget gap and make it one
of the Democrats' centerpiece promises. The move's seen as part of a
wider shift that projects the President as one showing more concerns of
the political middle.
Reducing Deficit: Rather than talk about
hard choices and freezing spending, the President has pledged to defend
popular federal programmes and rely on taxing corporations and high
earners. This represents a significant break from the past budgets.
A
Missing Plan for Social Security: Biden's previous budgets did not
specify or name the beneficiary programmes and this one too does not.
The latest budget makes no mention of any programme which he had
promised to shore up to during the 2020 campaign, The Times said in a
report. NY Transit Projects: President Biden's budget has
planned new transit routes in New York city valued over $1.2 billion
.The Second Avenue Subway extension and new train tunnels under the
Hudson River. "My budget is about investing in America and all of
America," he said during a speech to scores of union workers in the
swing state of Philadelphia.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
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64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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