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Jodey Arrington
President Joe Biden released a $7.3 trillion federal budget on Monday for the 2025 fiscal year, showing a 4.7% increase over the current budget.
The budget, while complying with spending caps that House Republicans pushed in last year’s Fiscal Responsibility Act in exchange for raising the debt limit, has little hope of passing, with House Budget Chairman Jodey Arrington delivering a “Fiscal State of the Nation” speech on the floor of the U.S. House of Representatives, issuing a rebuttal to President Biden’s proposed FY25 budget.
“Adding $16 trillion to the debt over 10 years, $5 trillion from hard-working, tax-paying Americans to attempt to pay for it, taxes on energy and ag producers, taxes on working families, taxes on our job creators who are competing not just here at home but in the international marketplace.
Arrington noted that the Biden budget expands mandatory spending, which is 75% of the budget.
“If we don’t rein in mandatory spending and grow this economy, we’ll never get out of this dangerous and unsustainable fiscal path that will end with irreparable harm to this country, that will end with our children being robbed of their freedom and their opportunities and will upend the republic and our leadership in the world.”
The Biden budget lists new social programs for housing, health and childcare and points to reducing the deficit by $3 trillion, not by spending less, but by raising taxes on corporations and the wealthy.
The Biden administration claims the proposed tax hikes on would raise tax receipts by $4.9 trillion over the next 10 years to offset new programs, thereby cutting the deficit by $3 trillion.
Biden has proposed reversing the corporate tax rate cut that Trump and congressional Republicans passed in 2017 by raising the rate to 28% from 21%.
It should be noted that on Dec. 31, 2025, many of Trumpera GOP tax breaks established by the Tax Cuts and Jobs Act (TCJA) of 2017 that lowered individual tax rates, will expireand revert to pre-TCJA levels. At that point, the individual will again be charged with paying higher taxes.
Biden is also pushing to increase a new minimum tax on the largest billion-dollar corporations − which he signed into law in 2022 − from 15% to 21% and plans to deny tax deductions for corporations that pay any employee more than $1 million. Loopholes could also be closed for tax breaks to owners of corporate jets.
House Speaker Mike Johnson immediately opposed the budget, calling it a “roadmap to accelerate America’s decline.”
As to Medicare spending, the budget proposes a plan to extend Medicare solvency indefi nitely by increasing the Medicare tax rate on those who earn more than $400,000 a year, closing various tax loopholes in existing Medicare taxes and directing revenue from the Net Investment Income Tax.
The Biden budget includes $405 million to hire 1,300 additional Border Patrol agents to secure the border and $239 million for 1,000 additional Customs and Border agents, as well as $755 million for hiring 1,600 asylum officers and support staff,plus $849 million for technology to detect illicit drugs and other contraband at ports of entry, and $1.3 billion to hire 375 new immigration judge teams.
The proposed budget would restore the full child tax credit enacted in theAmerican Rescue Plan, a $1.9 trillion economic stimulus package passed into law in 2021. Congress allowed it to expire at the end of 2021.
Biden also proposed a new program where working families withincomesupto$200,000 per year would be guaranteed affordable, high-quality childcare from birth until kindergarten, paying no more than $10 a day, with lower income families paying nothing.
Another inclusion in the budget is a new mortgage relief credit to help increase access to affordable housing. The proposal includes a new tax credit for middle-class, first-time homebuyers of up to $10,000 over two years, and calls for Congress to provide a one-year tax credit of up to $10,000 to middle-class families who sell their starter home.
Addressing lower health care costs, the budget proposes making expanded premium tax credits from the Inflation Reduction Act permanent and providing Medicaid-like coverage to states that have not expanded Medicaid under the Affordable Care Act.
Arrington pointed out the Republicans had put forth a budget blueprint that would put the nation on a path to balance.
“Instead of adding the $16 trillion in debt over 10 years, we take that debt away. We reduce trillions of dollars in debt,” said Arrington. “We reduce our debt to GDP, which, by the way, is the highest indebtedness in the history of our country surpassing World War II when we were fighting Imperial Japan and Nazi Germany.
“We’re in relative peace and prosperity, and we have higher indebtedness than we did in World War II, and it’s going to get exponentially worse. Today, our debt is 25% higher than the total economic output of the greatest and biggest and most robust economy in the world. It’ll be twice that in 30 years $120 trillion on top of the $34 trillion debt that we’re in now.
The budget goes to the U.S. House, which is unlikely to go along with the increased taxes and several other proposals.