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White House to propose $6 trillion budget plan as administration seeks to reshape economy, safety net

The White House is set to propose on Friday a $6 trillion budget plan for 2022 as President Biden seeks major changes to the US economy and welfare system.Evan Vucci/Associated Press

WASHINGTON — The White House is set to propose on Friday a $6 trillion budget plan for 2022 as President Biden seeks major changes to the US economy and welfare system, according to two people briefed on the proposal and an internal summary document. The people spoke on the condition of anonymity to discuss a matter not yet made public.

The budget contains no new major policies from the White House and instead reflects the plans the White house has already introduced, including a $2.3 trillion infrastructure proposal, a $1.8 trillion education and families plan, and $1.5 trillion in proposed discretionary spending. It projects budget deficits above $1 trillion for the rest of the decade, which would keep Washington’s spending imbalance at elevated levels. Even without new additional spending proposals, the annual federal budget is projected to include $5.8 trillion in spending in the current fiscal year, which ends Sept. 30, 2021.

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The budget proposal would be the latest spending plan offered to Congress in the early months of Biden’s presidency. He has already signed into law a $1.9 trillion stimulus package, and he has already offered the infrastructure plan and the families and jobs plan. What makes this budget different, however, is that it is devoted to the broad financing of government operations. Without a budget deal by October, there would be a partial government shutdown. So this package is expected to kickoff negotiations with lawmakers about how to proceed on everything from military funding to school programs.

The White House budget projects the US economy will grow by about 5 percent in 2021, a very fast rate as the country rebounds from the coronavirus pandemic.

Then it projects that the economy would grow at a slightly slower but still healthy 4.3 percent clip next year before leveling off at around 2 percent for the rest of the decade.

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The budget deficit, meanwhile, will go from 16.7 percent of gross domestic product in 2021 to 7.8 percent in 2022.

The amount of outstanding federal debt will be larger than the entire US economy throughout the rest of the decade, hitting 116 percent of all gross domestic product in 2027. Taxes are projected to increase by more than $3 trillion over the decade, in line with what the president has proposed as part of his economic programs.

The overall spending and deficit figures were first reported by the New York Times. The Washington Post reported last week that the budget would mirror what has already been proposed, essentially holding back on concrete proposals for a public health care option or sweeping prescription drug reforms.

The budget will include calling on Congress to create a public health care option and give Americans older than 60 the option to enroll in Medicare, according to a document obtained by the Washington Post, but does not advance specific policies for doing so and is not incorporated into the cost of the budget itself.

“The President’s budget will focus on advancing the historic legislative agenda he’s already put forward for this year,” said Rob Friedlander, spokesman for the White House budget office, in a statement last week. “The budget won’t propose other new initiatives but will put together the full picture of how these proposals would advance economic growth and shared prosperity while also putting our country on a sound fiscal course.”

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The White House offers a budget early each year that maps out its request for funding in the fiscal year that begins in October. The government’s budget usually consists of multiple parts. There are parts of the budget, known as discretionary spending, that must be renewed by Congress each year. These include money for the military, education department, and a range of other programs.

Then there is another section of the budget known as "mandatory spending" that includes money that is largely on autopilot and doesn’t need congressional reauthorization. This includes many large government expenditures, such as Social Security, Medicare, Medicaid, and a range of safety net programs.

The proposal comes while the White House is already in contentious talks with congressional Republicans over the infrastructure proposal, with Senate Republicans set to on Thursday morning introduce their latest counter-offer to the administration. The budget underscores the scale of the administration’s spending ambitions relative to congressional Republicans.