President Biden has submitted his fiscal year 2025 budget proposal to Congress: a massive $7.2 trillion package with more money for green energy and housing development, price caps on prescription drugs, free preschool for all, and a host of other social spending. The president wants to pay for it all by increasing taxes on corporations and high-income individuals and couples. 

“This year’s budget comes at a time when it’s clear that the president’s economic strategy of building the economy from the middle out and bottom up is working,” the director of the Office of Management and Budget, Shalanda Young, told reporters after the release of the budget proposal on Monday. 

Republicans in the House say the deal is already dead on arrival, however. “The price tag of President Biden’s proposed budget is yet another glaring reminder of this Administration’s insatiable appetite for reckless spending and the Democrats’ disregard for fiscal responsibility,” the House Republican leadership team said in a joint statement. “Biden’s budget doesn’t just miss the mark — it is a roadmap to accelerate America’s decline.”

The ambitious proposal would have a severe impact on the nation’s annual deficit and rapidly increasing debt. Mr. Biden’s budget proposal would increase the nation’s already staggering $34 trillion debt, which came it at more than 120 percent of the nation’s GDP in the last quarter of 2023. 

The chief executive of the Peter G. Peterson Foundation, Michael Peterson, lauded the president’s attempt to rein in the budget deficit, but says the $3 trillion reduction envisioned by Mr. Biden does not go far enough given that the country is on pace to borrow $20 trillion over the same period.

“Over the next decade, we are on pace to grow our debt to an all-time high as a share of GDP, fueling record interest costs,” Mr. Peterson said. “Meanwhile, critical programs including Social Security and Medicare are in significant danger of automatic cuts for all beneficiaries, and we can’t let that happen. Without action, all Social Security recipients will face a 23 percent cut in 2033 — that would mean a $17,000 reduction annually for the typical couple. In only 7 years, Medicare faces an 11 percent cut to providers that would affect more than 77 million enrollees.”

The White House says that its spending plan will be offset by increases in tax rates, however. The president wants to institute a 25 percent tax on billionaires’ incomes in order to prevent the ultra-wealthy from paying lower rates than salaried workers. 

“Billionaires make their money in ways that are often taxed at lower rates than ordinary wage income, or sometimes not taxed at all, thanks to giant loopholes and tax preferences that disproportionately benefit the wealthiest taxpayers,” the White House said in a statement. “As a result, many of these wealthy Americans are able to pay an average income tax rate of just 8 percent on their full incomes — a lower rate than many firefighters or teachers.”

Part of that “billionaire tax” would include taxing unrealized gains for households with a net worth of $100 million or more — which he has proposed before and has been rejected by Republicans and Democrats alike. 

The president also wants to raise the corporate tax rate to 28 percent from 21 percent, and double a foreign earnings tax on American companies that make money overseas. The tax increases would raise nearly $5 trillion over the next decade, with nearly $2 trillion going toward additional programs and the other $3 trillion going to deficit reduction. 

As he seeks higher rates for high-income earners and corporations, Mr. Biden wants to expand tax credits and tax breaks for middle-class families, children, and homeowners. An expanded child tax credit would give an average of $2,600 to more than 39 million families.