(Washington) Joe Biden aims to “reinvent” the US economy, with a proposed budget for 2022 of $ 6 trillion whose priorities are the opposite of those of Donald Trump, and spending that would inflate the country’s debt, a level never seen before.
Education, health, infrastructure, and climate change: The priorities revealed in this first draft of the US president’s budget are in line with his campaign promises and outlines presented in early April.
A treatment for COVID-19
In a message to Congress, the US President said, “We must seize the opportunity to reinvent and rebuild a new American economy that invests in the promises and potentials of every American.”
COVID-19 has plunged the United States into the worst economic crisis since the 1930s, and while the first economy has begun to recover, it is still far from pre-pandemic levels.
“Despite all the hard-won progress our country has made in recent months, America simply cannot return to what it was before the pandemic and economic downturn, with its structural weaknesses and inequality in the world. The old economy still exists, the president warned.
To do so, it relies on two investment plans included in this project that are supposed to make it possible to create millions of jobs: one for “American families” worth $ 1,800 billion over 10 years, and the other on infrastructure. The subject of bitter negotiations between the administration and the opposition.
Republican senators proposed 928 billion dollars over eight years, compared to 1,700 billion Democrats who agreed to plan their 600 billion project.
The White House is trying to spare the elected representatives in Congress, who will vote or not on the budget bill.
Joe Biden can certainly count on the Democratic majorities in the House and Senate. But it is so narrow, especially in the loft, that it cannot stand a split.
These plans, aimed at building a “new American economy,” should also allow “the United States to outpace its competitors”, starting with China.
Because if there is ever an area where the president is following in the footsteps of Donald Trump, it is the area of commercial competition with the Middle Empire.
Planned spending for fiscal year 2022 is $ 6 trillion, down from 2020 and 2021, when the federal government was forced to spend large sums to deal with the COVID-19 pandemic.
By comparison, Donald Trump’s 2020 budget in 2019 was $ 4.7 trillion in spending.
Joe Biden intends to substantially increase the sums earmarked for investments in education, health and infrastructure. The defense budget increased slightly to $ 756 billion.
Inflated debt and higher taxes
But all that spending threatens to increase debt, which now accounts for more than 100% of GDP. It is expected to reach 111.8% of GDP in 2022 and 117% in 2031.
As promised, Joe Biden wants to raise taxes on the richest Americans and big corporations, which will more than double in the next 10 years.
“Over time, savings from these reforms will exceed the cost of investments,” the president added, promising “large and growing” gains and a reduction in the annual deficit “by the end of the ten-budget period and every year. Thereafter.”
But he will have to spread the treasures of persuasion to persuade Republicans to vote in favor of this reform, which would wipe out the tax cuts implemented by Donald Trump.
The administration also intends to take advantage of historically low interest rates to finance its budget without increasing the country’s debt at a high rate of repayment.
The White House budget usually marks the beginning of the never-ending process that leads to government funding.
If the two parties disagree over the bill, the danger is that the federal administration, unfunded, is forced to close: it is “shutdown”.