Biden’s Budget: An Economy That’s Weak
President Biden’s budget doubles down on Democrats’ reckless spending and failed economic policies that continue to:
Weaken the economy
- Projects anemic economic growth of 0.4 percent this year and an average of 2.1 percent over the next decade.
- This is well below both the 50-year average of 2.7 percent and the averages of all but one decade since the 1950’s.
- Proposes adding fuel to the inflationary fire with $17 trillion in deficits over the decade, driven by $82 trillion in spending.
- Optimistically assumes inflation of just 4.3 percent in 2023 and that inflation will decline to 2.4 percent in 2024, despite wildly underestimating inflation in [every] budget submission of his Presidency.
- Last year, Biden’s FY 2023 budget predicted inflation of 4.6 percent in 2021 and 4.7 percent in 2022. Actual inflation for those years were 7.2 percent and 6.4 percent, respectively.
Burden Families and Businesses with High Taxes
- Calls for the highest level of taxation in U.S. history, including $4.7 trillion in new taxes.
- Repeals the Tax Cuts and Jobs Act, which lowered taxes by an average of $2,000 per family of four. This will increase taxes on middle-income families, not just those making over $400,000 a year, as the president has claimed.
- Slaps up to $930 billion in new taxes on workers by increasing the corporate income tax rate to 28 percent—the highest level in the developed world. Non-partisan research found has that 70% of the decrease take home pay on top of real wage loss from inflation.
- Creates a new $437 billion socialist wealth tax, taking productive resources away from job-creating investments and giving them to central planners.
- Hits seniors and savers with $261 billion in new taxes on retirement plans and stock buybacks—which return value to retirement savings.
- Proposes $37 billion in tax hikes on American energy producers, which will further drive-up gas and energy prices.
Discourage Work and Create a Culture of Dependency
- Reestablishes the Democrats’ Child Tax Credit-turned-welfare scheme that pays able-bodied workers to stay at home and receive monthly payments rather than work.
- Expands unemployment insurance, which researchers have shown keeps people from seeking work.
- In 2021, when Democrats had each of these policies in place, just 1.7 million workers returned to the labor force. In just the first three months of 2022 alone, after the expiration of these policies, 1.9 million workers returned to the labor force—more than in President Biden’s entire first year in office.
- Creates a new federal paid family leave entitlement, which has been shown to worsen gender wage gaps and reduce women’s employment.
- Rescinds President Trump’s SNAP and Medicaid work requirements.
Drive Soaring Interest Payments
- Projects $10.2 trillion in net interest payments—resources that could otherwise be used productively by taxpayers.
- When Biden took office two years ago, CBO projected 10-year net interest payments of just $4.6 trillion.
- Even this amount assumes optimistically low short-term interest rates, projecting just 4.9 percent in 2023.
- This is lower than the current rate of 5 percent, which is likely to increase further as the Fed continues interest rate hikes as expected.