Biden rolls out 2024 budget amid debt ceiling showdown

Biden said the budget would reduct the deficit by nearly $3 trillion.

President Joe Biden on Thursday rolled out his proposed budget for fiscal year 2024, casting it as a reflection of his values ahead of an anticipated reelection run and aiming to put Republicans on the defensive.

The White House said the budget would reduce the deficit in the long-term by $3 trillion, largely due to tax increases on wealthy Americans and corporations. It would also provide a record amount for defense spending, and include funds for Biden's pledges on paid family leave, universal preschool and more.

"I value everyone having an even shot, not just labor but small business owners, farmers and so many other people who hold the country together who've been basically invisible for a long time," Biden said in a speech before a union audience at the Finishing Trades Institute in Pennsylvania.

Biden's trip to Philadelphia, the site of his 2020 campaign headquarters and his prime-time speech ahead of the 2022 midterms about threats to democracy, signals a once arbitrary budget process is part of a wider push to connect with voters.

He emphasized giving families "breathing room" as he told personal anecdotes about Americans worrying about medical bills, child care and educational opportunities.

"My budget reflects what we can do to lift the burden and hardworking Americans," he said.

President Joe Biden talks about his proposed FY2023 federal budget during an event at the Finishing Trades Institute on March 09, 2023 in Philadelphia.
Chip Somodevilla/Getty Images

Biden's budget release comes as a larger spending fight looms on Capitol Hill with lawmakers facing a summer deadline to lift the debt ceiling or risk an unprecedented default. His proposal is all but dead-on-arrival, as congressional Republicans are generally opposed to any tax increases.

House Republicans have insisted on significant spending cuts in exchange for raising the debt ceiling to avoid an economically disastrous default, though they've yet to reveal they want in and out of the budget. Democrats have called for a "clean" increase to the debt ceiling not tied to federal spending.

House Speaker Kevin McCarthy on Wednesday accused Biden of delaying debt ceiling talks, and said Republicans will need to examine his budget proposal before releasing one of their own.

Biden shot back in his speech Thursday that he's ready for a sit down again with McCarthy "at any time."

"Tomorrow, if he has his budget," Biden said. "Lay it down, tell me what you want to do. I'll show you what I want to do. See what we can agree on."

Biden's proposed budget includes $842 billion in defense spending, as well as $6 billion in support for Ukraine amid Russia's ongoing invasion.

Among the major domestic spending proposals included in the budget are a national paid family and medical leave program providing up to 12 weeks of leave; universal preschool; and funding to expand free community college. It would also provide $25 billion for immigration enforcement and $5 billion in new election assistance funding. The budget also proposes expanding the Child Tax Credit from $2,000 per child to $3,600 for children under age 6 and $3,000 for older children.

To pay for the proposals, Biden is proposing a 25% minimum tax on billionaires and reversing two Trump-era tax cuts: raising the corporate tax from 21% to 28% restoring a 39.6% rate for single filers making over $400,000 and couples earning more than $450,000 annually.Biden's budget as proposed is all but dead-on-arrival, as congressional Republicans are generally opposed to any tax increases.

House Republican leaders called Biden's proposal "unserious" in a statement Thursday.

"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," House GOP leadership stated.

President Joe Biden speaks about his 2024 budget proposal at the Finishing Trades Institute, March 9, 2023, in Philadelphia.
Evan Vucci/AP

McCarthy said Wednesday Democrats were "wrong" to advocate for a clean raise to the debt ceiling after members received a briefing by the Congressional Budget Office, which recently projected the U.S. will add $19 trillion to the federal debt over the next decade.

"We can no longer ignore the major problem that we have: the size of our debt," McCarthy told reporters. "One thing we have learned through all history: every great society has collapsed after they overextended themselves."

Amid the budget battle, Biden's sought to draw a red line on Medicare and Social Security, which together take up a large part of the budget, going after some in the GOP he says want to gut the programs. McCarthy said Medicare and Social Security are off the table in upcoming negotiations.

Ahead of the broader rollout, Biden on Tuesday released his plan to shore up Medicare's finances through 2050 as the program faces a funding shortfall that could result in benefit reductions by the end of the decade. The plan includes a tax increase on high-earners and expanding drug pricing controls.

For Social Security, the budget would allocate a $1.4 billion increase to the agency to improve customer service. However, it didn't include a similar plan to shore up the Social Security's finances amid a shortfall that could result in a reduction in scheduled benefits starting in 2034.

"The Administration looks forward to working with the Congress to strengthen Social Security by ensuring high-income individuals pay their fair share," the administration said in the budget.