Biden's budget vs. House debt limit bill on spending, deficits, taxes
Send a link to a friend
[May 15, 2023]
By David Lawder
WASHINGTON (Reuters) - President Joe Biden's administration and
Republicans in the U.S. Congress are in talks to end their standoff over
raising the $31.4 trillion debt ceiling, haggling over vastly different
proposals that both claim to cut deficits by trillions of dollars.
Democrat Biden's full $6.8 trillion fiscal 2024 budget request doubles
down on his economic agenda to shrink inequality, with pre-K, childcare
and more healthcare. It is paid for by with tax increases on wealthy
Americans and corporations.
U.S. House of Representatives Speaker Kevin McCarthy and his fellow
Republicans' "Limit Save and Grow Act" is a spending reduction bill that
would cut 2024 federal discretionary spending to fiscal 2022 levels and
rescind signature Biden programs already approved by Congress.
Apples-to-apples comparisons are difficult, but here's where they can be
lined up:
TOP-LINE DISCRETIONARY SPENDING
Discretionary spending in the federal budget refers to funds for
everything except mandatory programs such as Social Security and
Medicare. It is at the heart of the partisan dispute.
![](http://archives.lincolndailynews.com/2023/May/15/images/ads/current/hartsburggrain_sda_PROMGRAD_2023.png)
Republicans: The House bill would cut 2024 U.S. discretionary spending
back to the 2022 level of $1.664 trillion and limit subsequent annual
increases to 1% for a decade. The cumulative 10-year savings would be
$3.2 trillion, according to the Congressional Budget Office (CBO).
But the bill does not specify how this 4.1% cut from the 2023 level of
$1.736 trillion would be allocated among programs. Republicans have
objected to the Biden administration's accusations that across-the-board
cuts would reduce veterans' benefits, saying they never intended that.
Biden: The White House's 2024 budget request proposes $1.9 trillion in
discretionary spending - a 9.4% increase followed by annual increases
averaging 1% over a decade. The discretionary spending proposals would
add $2.23 trillion to deficits over 10 years, offset by tax increases.
DEFICIT REDUCTION
Republicans: Full enactment of the Limit, Save and Grow Act would result
in total 10-year deficit reduction of $4.804 trillion from the CBO's
February baseline.
Biden: Full enactment of the fiscal 2024 budget request would reduce
deficits by $2.857 trillion, according to the White House.
![](http://archives.lincolndailynews.com/2023/May/15/images/ads/current/goodman_sda_SHG_2023.png)
TAXES
Republicans: Repeal clean energy tax credits and spending passed in the
Inflation Reduction Act, for a 10-year savings of $540 billion,
according to CBO. The plan contains no changes to current tax rates.
Biden: Eliminate various fossil fuel, digital currency and other tax
breaks to save $325 billion.
Expand Child Tax Credit through 2025 and convert it to monthly payments,
expand the Earned Income Tax Credit for low-wage earners and expand
other tax cuts and credits, for an estimated cost of $615 billion.
Raise the corporate income tax rate to 28% from 21%, reform
international tax rules, increase taxes on corporate stock buybacks and
enact other business tax increases to raise $3.0 trillion over 10 years.
[to top of second column]
|
![](../images/051523PIX/news_v97.jpg)
U.S. President Joe Biden is flanked by
Vice President Kamala Harris as he speaks with members of his
"Investing in America Cabinet" in the Roosevelt Room at the White
House in Washington, U.S., May 5, 2023. REUTERS/Leah Millis
![](http://archives.lincolndailynews.com/2023/May/15/images/ads/current/peasleymemorials_lda_2022.png)
Enact a "billionaires tax" of 25% on unrealized asset gains for the
wealthiest 0.01% of Americans, increase the top individual tax rate
to 39.6% from 37% and increase capital gains and estate taxes, to
raise $985 billion.
Apply net investment income tax to "pass-through" business income
for individuals and increase Medicare tax rates for taxpayers making
over $400,000, to raise $680 billion.
EDUCATION AND SOCIAL PROGRAMS
Republicans: Repeal Biden's student debt cancellation and expansion
of income-driven student loan repayment plans, reversing $460
billion in costs recognized in fiscal 2022. The Supreme Court is
expected to rule in June on a legal challenge to Biden's debt
cancellation, which may make this a moot point.
Expand work requirements for Medicaid, food stamps and other welfare
programs, for 10-year savings of $120 billion, according to CBO.
Biden: Free pre-K education, child care, community college, national
paid family and medical leave and other higher education spending,
for increased spending of $1.1 trillion over a decade.
Expand Affordable Care Act health care subsidies and coverage,
Indian Health Service funding and other long-term care spending, for
increased spending of $880 billion.
INTERNAL REVENUE SERVICE
How the IRS, the U.S.'s tax collection agency, is treated is a major
divide.
Republicans: Repeal $80 billion in IRS funding passed by Democrats
in Biden's signature climate bill to boosting enforcement,
operations and customer service. This adds $120 billion over 10
years to the deficit because of lower tax collections, according to
CBO.
Biden: Extend the $80 billion in 10-year IRS investments for two
more years, investing about $29 billion, and increase the IRS's
annual operations budget by $1.8 billion. The increase raises an
additional $134.1 billion over a decade, the White House estimates.
OTHER PROVISIONS:
Republicans: Rescind unused COVID-19 relief funds for a savings of
$30 billion, with nearly half of that realized next year. Modify
regulations, permitting and leases for energy projects, for a $3
billion in deficit reduction. Requires congressional approval of
rules with an annual economic effect of at least $100 million, for
an unknown budget impact.
Biden: Reduce future growth of defense discretionary spending,
expand user fees and spectrum auctions, extend budget sequestration
for Medicare and reduce fraud and abuse, for savings of $350
billion.
Note: Estimates for the Republican plan are from the Congressional
Budget Office, based on February baseline deficits that were revised
upwards on Friday. Estimates for Biden's budget request are from the
White House, as CBO has not yet issued a score.
(Reporting by David Lawder; Editing by Heather Timmons and Grant
McCool)
[© 2023 Thomson Reuters. All rights
reserved.]This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
![](http://archives.lincolndailynews.com/2023/May/15/images/ads/current/bauer_sda_PROMGRAD_2023.png) |