Biden budget proposal to show nearly $3 trillion in deficit reduction over 10 years
STEVE INSKEEP, HOST:
President Biden unveils his budget proposal today.
A MARTÍNEZ, HOST:
And you can think of this as the start of an argument. The president gives ideas for taxes and spending, but Congress eventually decides. Biden says he wants to protect programs Americans rely on, such as Medicare and Social Security. He wants to do that amid pressure to spend less and borrow less.
INSKEEP: NPR White House correspondent Tamara Keith joins us once again. Tam, good morning.
TAMARA KEITH, BYLINE: Good morning.
INSKEEP: So is the White House saying it's time to borrow and spend less?
KEITH: Let's say caring about the deficit is cool again. Back in 2017, Republicans passed a massive tax cut that has added to the deficit big-league in 2020 and 2021. Both parties - and then just Democrats - threw money at the pandemic. Now, there is a Democratic president, and Republicans are in control of the House. House Republicans are demanding spending cuts. And President Biden has, for more than a year, touted his own administration's deficit reduction.
INSKEEP: True, the deficit was so high that it has been coming down even though it's still high. So what does he want to do now?
KEITH: Well, according to the White House, the president has a plan that would reduce the deficit by nearly $3 trillion over the next 10 years. That comes through a combination of tax increases on the wealthy and big businesses and targeted spending cuts. That sounds like a lot, but I spoke with Bob Bixby of The Concord Coalition - it's a group that advocates for responsible federal spending - and he put it into context.
BOB BIXBY: Three trillion dollars is a lot of deficit reduction, and it sounds good. But the Congressional Budget Office says that we're going to add about 20 trillion over the next 10 years, so you'd really have to do about twice that - I think probably more than twice that - in order to keep the debt from rising as a percentage of the economy.
KEITH: Hold on to your seatbelts, he says. The national debt is going to rise a lot. This budget is an opening volley in a high-stakes political fight between President Biden and Republicans over government funding and the debt ceiling.
INSKEEP: Debt ceiling - OK, we've talked about that. That is basically paying the bills that the U.S. has already incurred. Republicans have yet to sign onto doing that because they're demanding unspecified spending cuts to lower future spending. In that context, what is the president offering?
KEITH: Well, the president's budget leans heavily on cost savings through things like negotiating drug prices and cutting tax breaks on the oil industry. He wants to raise taxes on the wealthy and large corporations. That's something he campaigned on three years ago and will campaign on again. And the White House sees these as popular proposals supported by the majority of Americans. You know, the biggest two sources of government spending are Social Security and Medicare. The president says he doesn't support cutting either of those things in his budget proposal. He has a plan to extend the life of Medicare by another two decades. He, as you say, has talked a lot about the deficit reduction he achieved in his first two years in office - $1.7 trillion - but that came largely because those expensive pandemic-era programs ended, and there was better-than-expected job growth. The rest of the deficit reduction to come is going to be a lot harder.
INSKEEP: What do Republicans say?
KEITH: They are not excited about this. They say the tax hikes and proposed spending cuts aren't serious. Kevin McCarthy said he wants to negotiate with the president, but he isn't saying exactly what he and Republicans want to cut, though they are saying they don't want to cut Medicare and Social Security either.
INSKEEP: NPR White House correspondent Tamara Keith, thanks so much.
KEITH: You're welcome. Transcript provided by NPR, Copyright NPR.