Biden Seeks Relief from the Ultra-Rich to Resolve the Federal Debt Problem

by Wall Street Rebel - Michael London | 03/08/2023 8:45 AM
Biden Seeks Relief from the Ultra-Rich to Resolve the Federal Debt Problem

It is expected that Mr. Biden would introduce a new tax on the income and unrealized profits of American households with a net worth of more than $100 million.


As the administration embraces the politics of debt reduction in the midst of a dispute with Republicans over extending the nation's borrowing limit, President Biden has said that he would propose measures targeted at reducing federal budget deficits by at least $2 trillion over the next ten years.

Mr. Biden's objectives will be addressed in Mr. Biden's budget blueprint. It is anticipated that the majority of Mr. Biden's projects, which will be outlined as part of his budget proposal, would depend mainly on a tried-and-true assortment of tax hikes on companies and high incomes, in addition to savings from certain expenditure cutbacks. These savings will include attempts to save money on government healthcare programs by extending legislation that he enacted last year that enables Medicare to negotiate the price of some prescription pharmaceuticals.

The measures come as Mr. Biden is under pressure from Republicans, who took control of the House last year, to change the nation's budgetary direction. If President Biden does not agree to significant reductions in overall government spending, Republicans in the House of Representatives have stated that they will not raise the nation's debt limit, which limits the federal government's total amount of money it is allowed to borrow.

It is anticipated that  President Joe Biden will make an announcement regarding a new tax that will be imposed on households in the United States with a net worth of more than $100 million. This tax will apply not only to the earned income of these households, but also to the unrealized gains in the value of their liquid assets, such as stocks. This tax was created with the intention of assisting in increasing government income and decreasing the nation's dependency on borrowed money. Mr. Biden will also advocate for the quadrupling of a tax passed as part of a comprehensive tax, health care, and climate plan he signed last year. This tax applies to stock buybacks.

This agenda includes measures to improve access to child care and minimize the cost of providing it, give a federally mandated paid leave for employees, create universal prekindergarten, and allow kids to attend community college for free. Those are just some of the items on this agenda. It is also anticipated that the president would continue to propose certain tax hikes to compensate for the costs of aspects of his agenda that Congress has not yet approved.

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It is not expected that Republicans will be appeased by Mr. Biden's proposals to reduce the deficit. Mr. Biden has said that he would not reduce benefits for Social Security or Medicare, both of which are popular social safety net programs. Still, he has refused to bargain with regard to the debt ceiling. But, he has made it clear on several occasions that he is not opposed to cutting deficits by increasing taxes on companies and the wealthy.

In his address at the state of the union, Mr. Biden gave a sneak peek of his proposal to reduce the fiscal deficit by declaring that "the plan I'm about to present you is going to decrease the deficit by another $2 trillion" without touching "a single piece of Medicare or Social Security."

Since 2000, the United States federal government has consistently spent more money than it has brought in via taxes, resulting in an annual deficit. At the start of the global recession, which prompted Congress to authorize billions of dollars in relief for people, companies, and state and local governments, the deficit skyrocketed under the presidency of the former candidate and President Donald J. Trump. It remained high in 2021 under Mr. Biden due to an economic assistance package that he signed shortly after assuming office that was worth $1.9 trillion. However, it decreased in the previous year.

The deficit is expected to increase to $1.41 trillion this fiscal year from $1.375 trillion last year and to continue rising throughout the decade to exceed $2 trillion in 2032, according to the nonpartisan Congressional Budget Office. Rising healthcare expenses and retirement benefits for the baby boomer generation are a major factor, as is the cost of repaying the nation's $31.4 trillion debt in the wake of the Federal Reserve's aggressive interest rate hikes to rein in excessive inflation.

The budget office predicts that between 2024 and 2033, the United States will incur deficits of more than $20 trillion, increasing the country's overall debt to about $52 trillion.

If all of Mr. Biden's plans were implemented, that increase would slow the deficit growth by approximately a tenth. There's little chance of it happening. Mr. Biden's tax measures have been met with strong opposition from Republicans, who have also sought to roll back the savings on Medicare prescription drugs he signed into law last year.

Through the signing of new legislation and the taking of administrative actions, Mr. Biden has authorized initiatives that, according to estimates provided by the Committee for a Responsible Federal Budget in Washington, would add approximately $5 trillion to the national debt over the course of ten years. These estimates are based on projections made by the Committee for a Responsible Federal Budget. Supreme Court challenges have been filed against his economic assistance bill from 2021 and his plan to reduce debt for those students who took out loans.

Mr. Biden's budget proposes cutting the deficit by $2 trillion. Still, it's not clear how he arrived at that number or if he agrees with Republican claims that the debt and deficits of the United States constitute a threat to the economy.

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                       Biden: Taxes on rich can help save Medicare

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