[Economics] Joe Biden presents budget with more defense spending that he wants to finance with higher taxes on the rich

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For the war in Ukraine and to reinforce NATO's eastern flank, the Biden administration seeks to allocate $6.9 billion.

 

File photo of dollar bills, in a file photograph.

 

The Government of the President of the United States, Joe Biden, presented this Monday a budget project of 5.79 billion dollars, with greater spending on defense that coincides with the war in Ukraine, which he wants to finance by raising taxes on corporations and More rich.

In its 277-page proposal, the White House requests that Congress approve a budget of 5.79 billion dollars for fiscal year 2023, which begins next October, compared to 5.85 billion in 2022.

In total, the US government wants to allocate 813,000 million dollars to defense, which represents an increase of 4% compared to fiscal year 2022, of which 31,000 million dollars would be in new spending.

For the war in Ukraine and to reinforce the eastern flank of NATO, the Biden Administration seeks to allocate 6.9 billion dollars in order to “counteract” the Russian invasion of Ukrainian territory.

In a statement, Biden requested that spending continue to respond "to aggression" by Russian President Vladimir Putin on Ukraine, "with US support for the economic, humanitarian and security needs" of kyiv.

In a subsequent press conference, the president stressed that the increase in defense spending is due to the fact that "the world has changed" due to the competition posed by countries such as China and Russia, which will require against cyberattacks and in new capabilities in space, including hypersonic missiles.

 

"This will be one of our biggest investments in national security," Biden said.

On the domestic front, the budgeted initiative includes 17.4 billion dollars for the security forces to fight crime in the US, of which 1.7 billion will be used to combat firearms trafficking.

Basically, as Biden himself explained in his press conference, the Government wants more police officers on the streets and for this it is going to dedicate more funds to the security forces to reduce crime.

The Government wants to finance this budget while reducing the federal deficit by 1.3 trillion dollars this year, in "the largest annual reduction in US history", raising taxes on the wealthiest and large companies .

Taxes for the rich and corporations

 

This will be possible, in part, by raising the corporate tax from 21% to 28%, something that is opposed by the moderate wing of the Democrats in Congress.

The Executive also wants to impose a new minimum tax of 20% for the richest in the country, that is, fortunes greater than 100 million dollars.

On taxes, the director of the White House Office of Management and Budget, Shalala Young, assured in a call with journalists that this project "guarantees that no one who earned less than $400,000 a year will pay a penny more in new taxes. ”.

Young stressed that they have prepared this proposal based on economic data that indicates that the US has created more than 6.5 million jobs in a year, with growth of 5.7% and a decrease in unemployment of 3 .8%.

However, this project is separated from the certainties established by Biden in the budgets for fiscal year 2022, the first of his term, where social policies and the climate fight were marked as priorities, some of which have not gone ahead in the Congress.

 

Still on track to recover from the pandemic, the US government is asking Congress in its current bill for $9.9 billion to bolster the capacity of health systems against covid-19 and $81.7 billion over of the next five years in health security against future pandemics.

For a better USA
Biden recorded at the press conference that his father used to say "don't tell me your value, show me your budget", and pointed out that his initiative sends a clear message that the Government "values fiscal responsibility first; security second; and third, investments in human capital to rebuild a better America."

The White House projects that in 2023 the GDP will grow 5% compared to its forecast of 7.3% in 2022, in addition to predicting inflation of 4.7% next year, one percentage point more than in the current one.

It also predicts that unemployment will fall to 3.9% in 2023, compared to its projection of 5.4% for 2022.

 

Earlier this month, the Federal Reserve (Fed) carried out the first interest rate hike since 2018 in a shift towards a contractionary monetary policy to combat high inflation, aggravated by the Russian invasion of Ukraine.

The US central bank raised the official interest rate by 0.25 percentage points, which places it in a range of between 0.25% and 0.5%, after two years anchored at levels close to 0 to try to mitigate the effects on the economy of the covid-19 pandemic.

 

Link: https://www.eluniverso.com/noticias/economia/joe-biden-presenta-presupuesto-con-mas-gasto-en-defensa-que-quiere-financiar-con-mayores-impuestos-a-los-ricos-nota/