Biden to propose federal budget cutting deficit by $3tn over a decade | Joe Biden

With the US government at risk of defaulting, Joe Biden will on Thursday propose a federal budget that would cut deficits by nearly $3tn over the next decade.

The president is attempting to call out House Republicans who are demanding severe cuts to federal spending in return for lifting the government borrowing limit. The GOP has no counter offer so far, other than a flat “no” to a Biden budget plan that could form the policy spine of the president’s campaign for re-election in 2024.

“We see this as a value statement,” the White House press secretary, Karine Jean-Pierre, told reporters on Wednesday. “This is something that shows the American people that we take this very seriously when we think about the fiscal responsibility, when we think about how do we move forward.”

Biden will unveil his plan in a battleground state, Pennsylvania. The president wants to impose tax hikes on the wealthy to limit federal borrowing, including a reversal of 2017 tax cuts made by Donald Trump on people earning above $400,000. Added revenues would help improve Medicare, the government health insurance program for adults over 65, the White House says.

Biden has also floated a new tax on incomes above $100m that would target billionaires and called for lower prescription drug prices. Tax companies pay on stock buybacks would be quadrupled, and those earning above $400,000 would pay an additional Medicare tax to help to keep the program solvent beyond 2050.

Biden would also seek to close the “carried interest” loophole that allows hedge fund managers and others to pay taxes at a lower rate, and prevent billionaires from being able to set aside large amounts in tax-favored retirement accounts, according to an administration official. The plan also projects saving $24bn over 10 years by removing a tax subsidy for cryptocurrency transactions.

The official who provided the budget details spoke on condition of anonymity to preview the plan before its official release.

The Republican House speaker, Kevin McCarthy, has called for putting the government on a path to a balanced budget. But by refusing to raise taxes or cut social security and Medicare spending, GOP lawmakers face some harsh math.

McCarthy told the Associated Press release of his plan had been pushed back.

Rohit Kumar, a former aide to the Republican Senate minority leader, Mitch McConnell, now an executive with the tax consultancy PwC, said Biden’s plan did matter “in terms of putting ideas out there”. He said that if Biden won a second term, elements of his spending blueprint could be part of negotiations in 2025 over expiring provisions in the 2017 tax cuts.

In February, the Congressional Budget Office estimated that the national debt will grow by more than $20tn over the next decade. Biden’s budget would reduce the debt, though it would still be high relative to historical levels.

In a speech on Monday, the president contended that there were about 680 billionaires in the US, many paying taxes at a lower rate than a typical family.

“No billionaire should be paying a lower tax rate than a firefighter – nobody,” Biden told a gathering of the International Association of Fire Fighters.

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