The Committee for a Responsible Federal Budget (CRFB) has warned that President Joe Biden’s proposed budget for the 2024 fiscal year would send the national debt to a record high within four years.
“Debt under the President’s budget would grow to a new record as a share of the economy over the next decade,” the CRFB wrote in the March 9 analysis, which estimates that by 2027, America’s public debt will climb to reach its highest level ever.
The Washington-based non-profit public policy organization projects that, under Biden’s draft budget, the national debt will rise from 98 percent GDP at the end of this year to 106 percent by 2027.
In dollar terms, that means the debt will grow from $24.6 trillion today to $32.9 trillion by 2027.
‘Disappointing’
The national debt would continue to rise to 110 percent of GDP by 2033, the terminal date of Biden’s 10-year budget plan.
In nominal terms, that would put the national debt at $43.6 trillion in 10 years, nearly double what it is today.
“Debt would continue to rise unsustainably under the President’s budget, reaching a new record of 110 percent of GDP by 2033,” CRFB said in its analysis.
“This debt level is likely to be even higher under CBO’s [Congressional Budget Office’s] forthcoming re-estimate of the budget and would rise even further if various expiring tax cuts are continued without additional offsets.”
“It is disappointing that the President continues to propose trillions of dollars in new spending and tax breaks without a plan to put our debt on a sustainable path,” the organization added.
The CRFB offered guarded praise for Biden for putting forward a proposal that offsets new spending tax breaks and reduces budget deficits by $3 trillion through 2033.
“These savings are only a third of what is needed to put the debt on a downward path as share of the economy, and it is disappointing the President did not go much further. But it is an achievable target that could be built upon with further deficit reduction in the near future,” CRFB said.
Biden on Thursday laid out his opening bid with a budget plan geared “for the middle class” that proposes $2.6 trillion in new spending while reducing the federal deficit by nearly $3 trillion.
The plan revolves around the idea of taxing wealthy Americans to fund programs like expanding Child Tax Credit and providing national paid medical leave.
Over the next 10 years, the $6.8 trillion budget (pdf) proposes approximately $5 trillion in tax increases on high-income earners and corporations.
“When the middle class does well, the poor have a way up and the wealthy still do very well,” Biden said at an event Thursday in Philadelphia, Pennsylvania. “I want to build the economy from the bottom up and the middle out, not from the top down.”
According to a fact sheet released by the White House ahead of the event, the president’s budget will focus on a number of key areas.
Budget Details
Biden’s plan proposes restoring the full Child Tax Credit and expanding it to $3,000 per child for children 6 years old and above and $3,600 per child for children under 6. Also, the Earned Income Tax Credit expansion for childless workers would be made permanent.
The budget would make the average $800 per year premium cuts permanent and provide Medicaid-like coverage to people in states that have not adopted Medicaid expansion. It also proposes limiting Medicare Part D cost-sharing and capping the price of insulin products at $35.
Biden’s proposed budget also provides funding for Medicaid home and community-based services, while expanding access to child care options, and provides free preschool to support child development.
The proposed budget includes measures to reduce housing costs and increase affordable housing, with $59 billion in mandatory funding and tax incentives geared at increasing the supply of affordable housing for low-income households.
It also provides $10 billion in funding to incentivize local and state jurisdictions to remove barriers to affordable housing, such as restrictive zoning.
The draft budget includes over $15 billion to allow more states and schools to provide free school meals to an additional 9 million children, as well as $6.3 billion to support the Special Supplemental Nutrition Program for Women, Infants, and Children.
Biden’s proposed budget seeks to invest in American manufacturing and innovation, including providing $375 million for NIST’s Industrial Technology Services and $21 billion in discretionary spending for CHIPS and Science Act-authorized activities.
The proposal also includes comprehensive paid family and medical leave and calls for paid sick leave for all workers.
It allocates $4.5 billion for clean energy infrastructure, including $1.8 billion to retrofit low-income homes.
The budget also invests $16.5 billion in climate science and clean energy innovation, including $3.5 billion for the Department of Energy’s Office of Science and $1.6 billion for the National Science Foundation.
There’s also $1 billion to support the Violence Against Women Act and $519 million for the Family Violence Prevention and Services program.
It also proposes nearly $25 billion for U.S. Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE). This includes $535 million for border technology, $40 million to fight fentanyl trafficking and to disrupt criminal activities.
The plan seeks to provide funds to hire an additional 350 Border Patrol Agents and an additional 460 processing assistants at CBP and ICE.
‘Recipe for Economic and Fiscal Disaster’
The proposal drew criticism, including from GOP leaders, who have said they will not consider a tax increase and instead want to focus on cutting federal spending.
House Speaker Kevin McCarthy (R-Calif.), House Majority Leader Steve Scalise (R-La.), House Majority Whip Tom Emmer (R-Minn.), and Republican Conference Chair Elise Stefanik (R-N.Y.) released a joint statement in response to the budget plan.
“President Joe Biden’s budget is a reckless proposal doubling down on the same far-left spending policies that have led to record inflation and our current debt crisis,” the Republican leadership team said.
“We must cut wasteful government spending. Our debt is one of the greatest threats to America and the time to address this crisis is now. Yet, President Biden is proposing out-of-control spending and delaying debt negotiations, following his pattern of shrugging and ignoring when faced with a crisis,” they added.
Further, McCarthy took to Twitter to chide the president, saying that the budget proposal is “completely unserious.”
“He proposes trillions in new taxes that you and your family will pay directly or through higher costs,” McCarthy said, repeating what has become a Republican mantra, “Washington has a spending problem, NOT a revenue problem.”
U.S. Chamber of Commerce Executive Vice President Neil Bradley called the proposal a “recipe for economic and fiscal disaster.”
“Nearly $2 trillion in spending increases would result in an economy where one out of every four dollars is government spending,” Bradley said in a statement. “An unprecedented $5 trillion in tax increases would hit businesses of all sizes and lead to lower wages for working Americans.”
