US President Joe Biden’s 2023 budget proposal includes increased funding for security – both domestically and internationally – and reduces the deficit, the White House said Monday morning, but officials admit inflation could continue to cause problems for the overall economy.
As Russia’s invasion of Ukraine continues, the proposed budget includes $6.9 billion for the European Deterrence Initiative and the North Atlantic Treaty Organization (NATO) and “countering Russian aggression to support Ukraine.”
Biden is set to speak about his budget proposal later on Monday.
Shalanda Young, director of the Office of Management and Budget, said during what “will be a decisive decade for the world,” the proposal makes “one of the largest investments in national security in US history, strengthening our military and leveraging our renewed strength at home to meet pressing global challenges.”
In order to make investments and reduce the deficit, the budget calls for a new “minimum tax on billionaires” – which includes more than just billionaires, and applies to anyone worth more than $100 million – that would ensure the wealthiest 0.01% of households pay at least “20 percent of their total income in federal income taxes.” It also increases the rate corporations pay on profits and contains “contains additional measures to ensure that multinationals operating in the United States cannot use tax havens to undercut the global minimum tax,” the White House said.
Cecilia Rouse, chair of the Council of Economic Advisers, told reporters that Biden policies would decrease the expected deficit in the current fiscal year of 2022 to “$1.3 trillion smaller than it was in fiscal year ’21, and we believe the policies in this budget will further reduce the deficit by another trillion over the next decade.” But much of that deficit reduction comes from temporary programs in the American Rescue Plan expiring.
“Stepping back, what this budget shows is that we can grow the economy from the bottom up and middle out and invest in the American people, and that we can do it in a smart fiscally responsible way,” Young, the OMB director, told reporters in a call on Monday morning.
Officials say the estimates on inflation reflected in the budget were set in November – before Russian President Vladimir Putin’s invasion of Ukraine, which has strained the economy and increased prices across the board.
“The invasion will likely put upward pressure on energy and food prices that in turn could reinforce inflation that was already an issue prior to the invasion due to the pandemic supply chain constraints and as far demand for goods,” said Rouse, Biden’s top economist. “The economics forecast … if we were updating today, we would look at it somewhat differently.”
In a statement, Biden said the budget “includes historic deficit reduction, historic investments in our security at home and abroad, and an unprecedented commitment to building an economy where everyone has a chance to succeed.” He also touted the deficit reduction as a “the direct result of my Administration’s strategy to get the pandemic under control and grow the economy from the bottom up and the middle out.”
Read more about the budget here.