The White House’s acting budget director defended President Biden’s spending and tax plans Wednesday but suggested at a hearing of the Senate Budget Committee that the spending could plans be curtailed if Congress doesn’t go along with the proposed tax hikes.
“My guess is if the Senate doesn’t pass the offsets that the spending is also in danger,” Shalanda Young, deputy director of the Office of Management and Budget, said in response to a question from Sen. Rick Scott (R-FL) about what the administration would do if Congress doesn’t pass Biden’s tax increases. “So we’d have to see the full package the Senate and House would move on.”
Biden’s budget calls for $6 trillion in spending in fiscal year 2022, and projects a deficit of $1.8 trillion. It envisions $5 trillion in additional spending over a decade, partially offset by $3.6 trillion in higher taxes. The White House says that Biden’s budget would fully offset the costs of his American Jobs Plan and American Families Plan within 15 years and reduce deficits by more than $2 trillion over the 2030s.
Responsible spending? Young told lawmakers that the budget is fiscally and economically responsible, balancing much-needed investments in the near term with longer-term deficit reduction that would start in 2030.
“The decades-long, global trend of declining interest rates gives us the fiscal space to make necessary upfront investments. Under the budget’s policies, the real cost of federal debt payments will remain below the historical average through the coming decade, even as the budget assumes that interest rates will rise from their current lows, consistent with private sector forecasts,” she said. “Over the long run, when we face larger fiscal challenges and more uncertainty about interest rates, the budget will reduce the deficit and improve our nation’s finances. That’s because its front-loaded investments are more than paid for through the permanent tax reforms that will ensure corporations and the wealthiest Americans pay their fair share.”
At the same time, Young said that the administration does not want to cut Social Security and Medicare, mandatory programs for which spending is set to grow rapidly. “We are reducing the deficit, but as you know we have an aging society — which is part of the structural growth in spending we’re not addressing because we don’t think we should be cutting Social Security and Medicare at this time,” she said. “And if the choice is between that and asking the wealthiest to pay more, that’s what we need to do.”
Or too much butter? Sen. Lindsey Graham (R-SC), the top Republican on the Budget Committee, slammed Biden’s budget, saying that there aren’t enough people in the top 1% to bear the load of the proposed spending.
“This tax and spend budget will break the back of our economy and will destroy future generations’ ability to achieve the American dream that most of us have had a shot at because we will sink them with debt. We’ll have an economy with a tax structure that very few businesses will look to America as a place to locate,” he said. “Other than that it’s fine.”
Except that Graham’s criticisms didn’t end there. He also decried the 16% proposed increase in non-defense discretionary spending and the 1.6% increase for defense, saying Biden botched the guns-versus-butter ratio and his proposed budget was blind to global threats. “There’s enough butter in this bill to call a heart attack for everybody in the world,” Graham said. “This is the most cholesterol-laden budget I’ve ever seen.”
Graham also pressed Young on the $300-a-week federal boost to unemployment benefits enacted as part of the American Rescue Plan in March. Some two dozen Republican-led states have canceled the added benefit, arguing that it deters workers from rejoining the labor force. When Young said she had not met Americans who prefer not to work, Graham said he had — in his own family.
“I got a lot of people in my family that ain’t working because they’re getting — I'll show you some of my family,” Graham said. “So bottom line is I think there are people out there, they're not bad people, but they're not going to work for $15 an hour if they can make $23 unemployed. That doesn’t make you a bad person. If you're working for $15 an hour, that makes you almost a chump.”