When he took office, his first order of business was to get the coronavirus under control, demonstrating that the federal government could, indeed, do good for the people. That has been a roaring success, with about 62% of American adults currently having received at least one vaccine. Biden is now aiming to have 70% of American adults vaccinated by July 4. New cases are plunging as the vaccines take effect, and the country is reopening rapidly.
Biden also turned quickly to repairing the economy, with the $1.9 trillion American Rescue Plan, which expanded unemployment benefits and the child tax credit. That credit will start to show up in people’s bank accounts in mid-July and is expected to cut child poverty in half.
So far, Biden’s approach to turning the mood of the country seems to be working: while his predecessor is polling at 39% approval and 57% disapproval, Biden is currently enjoying a 63% job approval rating.
We’ll see how these two themes play out. Today, Biden released a proposed $6.01 trillion budget, tying together three plans he’s already proposed—the $2.3 trillion American Jobs Plan, the $1.8 trillion American Families Plan, and $1.5 trillion in discretionary spending—and adding more to invest in education, health, science, and infrastructure. The proposal increases defense spending by 1.7% and nondefense spending by 16%. Overall, it increases federal spending to levels like those of WWII. By 2031, it would peg spending at $8.2 trillion. Deficits would run higher than $1.3 trillion for the next ten years but then would begin to decrease.
The president proposes to pay for the additional spending by increasing revenue by $4.17 trillion through taxes on individuals who have an annual income of more than $1 million and by revising the top capital gains rate to 39.6%, plus a 3.8% Medicare surtax, bringing the rate to 43.4%. (The current rate is 20% plus the Medicare surtax, making it 23.8%). The White House figures the capital gains tax reform should raise about $322 billion over the next decade.
The budget shows Biden aiming to rebuild the middle class and make America globally competitive again. Acting director of Office of Management and Budget Shalanda Young said that the administration had earlier called for such investment because, “The country had been weakened by decades of underinvestment in these areas.” The 2022 budget would, she said, “grow the economy, create jobs, and do so responsibly by requiring the wealthiest Americans and big corporations to pay their fair share.”
Doubling down on the 2017 Trump tax cuts, which funneled money upward even as corporate tax revenues fell 31%, Republicans have vowed to oppose all tax increases and want no part of Biden’s proposed spending.