Five takeaways from Biden’s first budget proposal

President Biden’s budget proposal on Friday kicked off what’s likely to be a long, drawn-out fight in Congress over how to fund the federal government starting Oct. 1.

Biden’s first budget request as president calls for raising annual discretionary spending to $1.52 trillion. That amount includes a 15.7 percent increase in domestic spending and a 1.7 percent boost in defense.

Although the spending plan omitted details on taxes and mandatory spending programs, as well as the usual 10-year projection for spending and revenues, it nonetheless offers valuable insights into Biden’s priorities.

Here are five key takeaways from the Biden budget proposal.

Austerity is out, big government is in

Biden’s budget affirmed his embrace of government spending and comes on the heels of a $1.9 trillion COVID-19 relief bill, a proposed $2.3 trillion infrastructure package and subsequent $2 trillion measure focused on issues like child care and college tuition.

The $1.52 trillion budget request, up $118 billion from current levels, is 25 percent higher than discretionary spending was at the end of the Obama administration.

The Biden administration is making the argument that the pendulum has swung too far toward austerity over the years, resulting in a lack of resources that exacerbated inequality, left the country’s infrastructure in an unenviable state of disrepair, created educational stagnation and allowed social ills to fester.

White House press secretary Jen Psaki said Friday that the administration’s push comes amid a major economic and health crisis, while arguing that the difficulties the nation faces go beyond the current emergencies.

“We’re also inheriting a legacy of chronic underinvestment, in our view, in priorities that are vital to our long-term success and our ability to confront the challenges before us, so the president is focused on reversing this trend and reinvesting in the foundations of our strength,” she said.

Rather than keep government spending on its current trajectory, leaving the major increases to his “Build Back Better” agenda, Biden’s proposal supersized the things the federal government does every day, from investing in health research to funding Pell grants.

His proposal also coincides with the expiration of a decade’s worth of budget caps from the 2011 Budget Control Act.

The defense budget is still a sacred cow

Budget watchers had expected Biden to keep defense spending flat, and progressives sought a 10 percent cut, but Biden surprised both by increasing the Pentagon’s budget.

His proposal would add $12.3 billion to the defense budget, a 1.7 percent increase, which in a typical year would just keep pace with inflation. At a total of $753 billion, it leaves in place significant increases to defense spending that former President Trump set in motion.

As a point of comparison, the defense budget was $590 billion when Biden left office as vice president in 2017.

But even the unexpected increase in Friday’s budget proposal highlighted the political sensitivities around defense spending.

A joint statement by top Republicans, including those on defense and budget committees in the Senate, characterized the 1.7 increase as a virtual cut and accused Biden of ceding ground to China and Russia.

“President Biden’s budget proposal cuts defense spending, sending a terrible signal not only to our adversaries in Beijing and Moscow, but also to our allies and partners,” they said.

“Cutting America’s defense budget completely undermines Washington Democrats’ tough talk on China and calls into question the administration’s willingness to confront the Chinese Communist Party,” they added.

The split reactions between progressives and conservatives underscore the delicate balancing act Biden will have to pull off to reach a spending deal, but his proposal serves as a reminder that defense spending remains a sacred cow in Washington.

Pay-fors are an afterthought

In one important way, Biden’s budget proposal matched the one Trump put out during his first months in office: The proposal was more emaciated than skinny due to its limited details.

Like Trump, Biden only released a very limited set of specifics and sidestepped questions about the long-term budget effects. The White House said a full proposal is due later this spring.

Only then will it become clear how Biden intends to pay for the new spending in his budget, whether he has a plan to lower the deficit, whether he expects spending to keep rising, stabilize or eventually drop down, and how he intends to deal with mandatory programs.

The mandatory spending, which includes programs like Social Security, Medicare, Medicaid and a slew of anti-poverty programs such as nutritional assistance, account for about two-thirds of annual government spending, making them a far more significant driver of spending and deficits than the discretionary side of the ledger covered in Biden’s $1.52 trillion proposal.

“We can’t truly evaluate the president’s agenda until we know how he’ll address the other two-thirds of the budget and what he will do on the other side of the ledger with taxes,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

“We hope the full budget plan will include policies to not only offset new spending, but secure the trust funds and improve the country’s long-term fiscal path,” MacGuineas said. 

But the focus on spending without discussion of taxes, deficits or the country’s fiscal outlook is a reminder that the issue of debt has lost some of its political sway over both politicians and voters.

Sen. Chris Coons (D-Del.), a close friend and confidant of Biden, admitted as much when discussing where Democrats and Republicans might find common ground on potential infrastructure pay-fors.

“In the choice between raising taxes significantly and simply looking at each other and saying ‘we need a robust recovery,’ I think it’s more likely we’ll have a package that is not paid for, and that is less robust but still putting hundreds of billions of dollars into infrastructure,” he said earlier this week.

Biden wants to reclaim America’s role on the global stage

Whereas Trump famously promised to put “America First” in his policy agenda, antagonizing allies and retreating from global institutions in the process, Biden’s budget shows the president aims to put America back on the world stage in a much different way.

Biden’s request of $63.5 billion for the State Department and international programs, a 12 percent increase over current levels, stems from his view that some of the biggest problems the country faces require global cooperation.

He seeks to quadruple the funding for international climate programs and is requesting a four-year commitment of $4 billion to stabilize Central America, home to many of the migrants arriving at the southern border.

He also would boost the Centers for Disease Control and Prevention budget to $8.7 billion, from $7.9 billion, with a focus on international preparedness to help tackle future pandemics. The budget would fully fund U.S. commitments to United Nations peacekeeping, including payments missed under the Trump administration.

International programs at the Treasury Department would get a 73 percent boost, just as Secretary Janet Yellen is calling for a summer agreement on a global minimum tax to clamp down on tax avoidance by multinational corporations.

The filibuster still reigns supreme

While presidential budget requests shape the debate around annual spending, Congress usually has its own ideas, and those views matter most since lawmakers have the power of the purse.

In the 50-50 Senate, the filibuster means the minority party still has significant say over annual spending. Without 10 GOP senators joining Democrats, Biden will not be able to pass a single spending bill to fund the government when fiscal 2022 starts in October.

That could add more pressure on Biden and Senate Majority Leader Charles Schumer (D-N.Y.) to push for weakening or nixing the legislative filibuster altogether, a move to which centrist Sen. Joe Manchin (D-W.Va.) reiterated his opposition in a Washington Post op-ed this week.

So long as the filibuster remains in place, stern statements from Sen. Richard Shelby (R-Ala.), the vice chair of the Senate Appropriations Committee, will carry significant weight.

“We’ve just spent several trillion dollars domestically, and the administration is determined to spend several trillion more,” Shelby said in response to Biden’s proposal, focusing on the disparity between defense and non-defense spending. “Shortchanging America’s defense in the process is unacceptable and dangerous.”

Psaki all but admitted that the proposal was an opening bid in what promises to be an arduous year of negotiations, mostly with Senate Republicans.

“I will say we’re at the beginning of our process,” she said Friday.

“This is the beginning of what we know is a long journey.”

Tags budget proposal budget request Charles Schumer Chris Coons Defense spending Donald Trump fiscal year 2022 Janet Yellen Jen Psaki Joe Biden Joe Manchin non-defense spending Richard Shelby

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