It is one of President Biden’s most common refrains on the stump: “Don’t tell me what you value,” Biden says, quoting his father. “Show me your budget - and I’ll tell you what you value.”
With Republicans controlling the House, the 2024 budget released by the White House on Thursday has little chance of being approved by Congress. But the 182-page document still consists of hundreds of policy proposals, numbers, charts and other data points that provide insight into the priorities of the president and his team. The spending blueprint also serves as the initial offer in negotiations between Democrats and Republicans over the federal budget - talks likely to prove a major flash point in Congress throughout the year, which faces a tense standoff over the national debt ceiling and a potentially catastrophic default.
“As one of the people who has spent many a long night writing and editing a budget, I take umbrage at the people who say it’s a meaningless document. It’s not a meaningless document,” said Kenneth Baer, who served at the White House Office of Management and Budget under the Obama administration and is now the founder of Crosscut Strategies, a communications firm. “It sets the terms of the debate. It shows what’s important to you, your commitments and what you really want.”
Here are seven key takeaways from the 2024 White House budget.
1. Washington remains deeply divided on spending
Federal lawmakers have until sometime this summer to raise the nation’s debt ceiling, which limits how much the Treasury Department can borrow to pay for spending Congress has already approved. House Republicans have demanded the limit not be raised without an agreement from the White House to substantially reduce the country’s $31 trillion debt. Some analysts have speculated that the GOP may agree to lift the debt limit if it can first reach an agreement with the administration on cutting government spending.
But the White House budget highlights just how far apart the parties are. The president’s budget calls for significantly increasing spending by about $2 trillion over the next decade - just as Republicans contemplate pushing for trillions in cuts to health care and other domestic programs to reduce deficits.
Similarly, House Republicans have ruled out new taxes as part of the solution to the federal debt - and are even pushing to repeal tax hikes the White House approved last year. By contrast, the White House relies almost entirely on more than $4 trillion in new revenue to cut future deficits in its budget proposal. Rep. Jodey Arrington (R-Tex.), the leader of the House Budget Committee, criticized the White House by saying he has not “seen the president demonstrate real deficit spending reductions.”
These divisions are not new, but the growing gap between the parties - as the debt ceiling threat looms - is striking.
2. The White House wants to demonstrate fiscal prudence
During his State of the Union, Biden announced that his 2024 budget plan would cut the deficit by more than $2 trillion over 10 years - roughly twice as much as the administration’s first two budgets. But on Wednesday, a day before the budget’s introduction, White House press secretary Karine Jean-Pierre said the administration was going even further, announcing the budget would cut the debt by close to $3 trillion. The proposal ultimately called for reducing deficits by $2.9 trillion over 10 years.
The change reflects the White House’s determination not to let congressional Republicans claim the mantle of fiscal responsibility, as the nation’s debt reaches $31 trillion and is set to rise over the next decade. Top GOP lawmakers have clamored for steep reductions in the debt, although they have ruled out new tax hikes to do so, and the administration is eager to soften conservative criticisms over whether new government spending fueled inflation. Republicans approved trillions of new spending under President Donald Trump and voted three times to raise the debt ceiling.
“All our proposals are paid for, and we’re doing this in a fiscally responsible manner,” White House budget director Shalanda Young told reporters on Thursday.
Biden’s budget achieves almost all its deficit reduction through proposed tax hikes on high-earners and corporations. Some Democratic pollsters say talking about the deficit helps voters understand the parties’ diverging solutions, which they believe plays to Democrats’ advantage.
“If you don’t talk about the deficit, you don’t have the same permission structure to talk about the contrast in solutions because otherwise people will say, ‘That sounds great but we don’t have the money,’” said Celinda Lake, who served as Biden’s pollster in 2020. “Talking about the deficit is great at turning down the noise so people can see that difference, which is where we really win.”
3. Biden remains committed to the ideas Manchin blocked
Much of the president’s first two years in office were spent trying to pass his Build Back Better agenda, which called for trillions of dollars in spending proposals on everything from child care to housing to eldercare. While Democrats eventually approved a more limited package focused on climate spending, taxes and prescription drugs, objections from centrist senators - particularly Sen. Joe Manchin III (D-W.Va.) - blocked most of Biden’s initial ambitions.
Still, the 2024 budget shows the White House remains committed to the ideas, at least rhetorically. Republicans’ takeover of the House effectively eliminates hope for passing these into law over the next two years. But their place in the budget reflects the White House’s ongoing commitment to the ideas and their likely place in Biden’s 2024 presidential campaign.
The budget includes more than $2 trillion for programs such as child care, prekindergarten, community college, Medicaid and more.
“There’s lots of social programs to advance further what they did in the Inflation Reduction Act, which is all very positive,” said Larry Mishel, who served as president of the Economic Policy Institute, a left-leaning think tank. “They’re going to stay on the same trajectory.”
Republicans say these programs fuel inflation by increasing government spending.
4. The White House wants trillions from corporations and the rich
Biden paid for new spending in his climate and economic package last year by raising more than $700 billion in revenue from four key sources - large corporations, high-income-earners, investors and pharmaceutical companies.
The White House budget makes clear that the administration wants to go much further to squeeze these groups, aiming for more than $4 trillion in new revenue over the next decade - far more than it achieved last year.
Last year in the Inflation Reduction Act, Democrats devoted billions of dollars to the IRS to improve tax policing, which the administration says will fall exclusively on wealthy tax cheats, not middle-class taxpayers. It established a new minimum tax on big corporations and a new tax on stock buybacks aimed at investors. It also gave Medicare the ability to negotiate lower prices with prescription drug firms.
The 2024 budget shows much greater ambitions, even if they have little chance of passing Congress through a GOP-controlled House. The White House would expand corporate taxation beyond the minimum tax by raising the standard corporate tax rate from 21 percent to 28 percent. It proposes quadrupling the stock buyback tax passed as part of the IRA, and raising the capital gains rate paid by investors to 39.6 percent for those earning more than $1 million, matching a new top marginal rate on income for the highest earners, too. It would also raise more than $200 billion by dramatically expanding the ability of Medicare to demand lower prices of pharmaceutical companies, which companies say would stifle innovation in drug research.
5. Biden has a plan for Medicare
As the baby boom generation ages and health-care costs continue to rise, Medicare - the health-care program relied on by about 60 million seniors - faces a funding crisis. Without changes by federal lawmakers, the program will have to dramatically cut reimbursements to hospitals and other providers as soon as 2028 because not enough money will be coming in to meet its spending obligations.
This looming Medicare shortfall has alarmed experts for years. But the White House had not proposed a solution until now. The plan would give the administration authority to negotiate what price the federal government pays for more drugs than the limited number approved as part of Democrats’ legislative package last year, while also increasing taxes on people earning more than $400,000 per year. The administration says its proposal would extend the solvency of Medicare for at least 25 years.
6. The White House ducks a fight on Social Security
The administration didn’t address how it would resolve the funding crisis facing the other most significant program for U.S. seniors: Social Security.
The retirement program faces automatic benefit cuts starting as soon as 2033 unless Congress and the White House make changes. Failure to act would trigger payment reductions for tens of millions of seniors - a fate lawmakers are eager to avoid, but see little path to resolving.
Asked about the lack of a plan for Social Security, Young, the budget director, blamed Republicans for trying to push cuts. “The number one threat to Social Security and benefits for folks like my 94-year-old grandmother is those on the other side of the aisle who say they want to cut benefits,” Young said.
7. Fight looms over ‘wasteful spending’
Republicans have demanded that the administration agree to reduce the national debt by cutting what they call wasteful government spending. Democrats have largely dismissed these concerns as misguided, arguing that federal programs are essential lifelines for tens of millions of Americans.
Biden’s budget, however, includes more than a dozen proposals intended to demonstrate the White House is also willing to crack down on government waste. But it defines as wasteful spending programs such as tax subsidies for oil and gas firms and tax loopholes that the administration says benefit real estate firms, cryptocurrency transactions and wealthy investment managers - and unused money allocated to federal prisons.
“President Biden will always reject cuts that take away people’s health care; raise costs for seniors, middle-class families, and students; increase poverty; or reverse our economic progress,” the White House said in a separate statement distributed to reporters along with the budget. “But - as his budget shows - he stands ready to work with members of both parties to cut wasteful spending on special interests and crack down on systemic fraud.”
The White House budget also requests more than $1 billion for prosecuting - and preventing - fraud in pandemic aid programs, especially in unemployment insurance.