4 Lies You’ve Been Told About Biden’s New Budget Proposal
President Joe Biden released an unprecedented $6 trillion budget proposal on the Friday before Memorial Day, leading critics to speculate that — given the timing — he wanted his economic plans to avoid media scrutiny.
If so, mission accomplished.
While the media have noted the historical increases to federal spending and the national debt, media coverage has passed on at least four major lies about the Biden budget.
Biden’s budget won’t raise taxes on anyone making less than $400,000
Joe Biden campaigned for president last year on a pledge not to raise taxes on anyone making less than $400,000 a year. On Friday, CNN repeated the administration’s assurances that this proposed, enormous budget is “more than paid for by the reforms to the tax code that would require the wealthiest of Americans and corporations to pay higher taxes. The [p]resident has repeatedly pledged that Americans making less than $400,000 would not have to pay increased taxes.”
But CNN ignored the facts: Biden’s talking out of both sides of his mouth.
First, his budget figures assume a massive tax increase on working — and middle-class Americans. Credit goes to the New York Times’ Jim Tankersley, who reported:
Mr. Biden and Congress will allow tax cuts for low- and middle-income Americans, signed into law by President Donald J. Trump in 2017, to expire as scheduled in 2025. Mr. Biden has said he will not raise taxes on people earning less than $400,000 a year. It is possible that he could propose to extend the Trump tax cuts for those earners in a future budget, potentially coupled with additional tax increases on high earners or businesses.
President Donald Trump’s Tax Cut and Jobs Act of 2017 reduced taxes for people across the income spectrum, according to an analysis from the nonpartisan Tax Foundation. The greatest percentage cut (2.8%) came to those making between $20,000 and $50,000 a year.
But then, acting budget director Shalanda Young explained away that broken campaign promise by saying the administration would pass legislation before 2025 to keep those tax hikes from happening.
So, out of one side of its mouth, the administration says the budget is “paid for” (see below) through tax increases, based on letting the Trump tax cuts expire completely. Then, out of the other side, the administration promises to make sure those taxes never rise. One of these two statements is untrue.
Biden’s budget will make America more competitive with China
Perhaps the strangest allegation comes from National Public Radio (at your expense). “The proposal is the biggest budget in recent history,” NPR notes rightly, “reflecting the massive government spending plans Biden rolled out this spring in his push to bolster the middle class and make the United States more competitive with China.”
NPR did not explain how racking up trillion-dollar deficits for the next decade improves the U.S. position against China, the largest foreign holder of U.S. debt at $1.3 trillion (and counting).
But certain provisions in the bill would definitely bolster Beijing. Americans for Tax Reform noted that the budget’s proposal would raise corporate taxes to “a combined federal and state rate of 32 percent, higher than Communist China.” The tax provisions would make the United States “uncompetitive with China, encouraging companies to move U.S. jobs and capital overseas.”
Biden’s budget will be ‘paid for in 15 years’
Media coverage of Biden’s budget let the president get away with one of his favorite financial gimmicks. Reuters reported, “White House officials said the Biden’s $4 trillion plans to address historic U.S. inequality, climate chance and provide four more years of free public education would be completely paid for in 15 years, with tax increases starting to chip away at deficits after 2030.”
First of all, budgets have been projected over 5-, 7-, or 10-year periods. Biden expanded the window to 15 years, because his spending spree runs annual deficits of more than $1 trillion after any one of those periods.
The media have largely repeated Biden’s assertion that the budget will balance in 15 years. But the Biden-Harris administration is still underestimating the price tag of its government-expanding agenda. “Penn-Wharton calculates Biden’s two proposals would spend $5.2 trillion and only raise $3.4 trillion in the first 10 years, putting him far short of his 15-year goal,” The Washington Post reported.
Even then, the Biden administration assumes future administrations will keep his pledges to cut popular spending measures, like the expanded child tax credit. But promises to curb the debt down the road “will only be as fiscally responsible as our future fortitude to actually stop the spending,” said Michael Peterson, chief executive of the Peter G. Peterson Foundation.
Will inflation remain low under Biden’s budget proposal?
The New York Times notes that Biden’s “budget projects that consumer prices will never rise faster than 2.3 percent per year and that the Federal Reserve will only gradually raise interest rates from their rock-bottom levels in the coming years.”
But the Times ignores the fact that inflation has already driven the Consumer Price Index up by almost twice that rate, even before the Democrats’ proposed spending orgy. “Over the last 12 months, the all items index increased 4.2 percent,” the Bureau of Labor Statistics reported this month.
Another measure of consumer prices rose at the highest clip since 1992; the core personal consumption expenditures (PCE) index increased by 3.1% this year. That includes a massive 25% increase in the cost of energy, something unlikely to turn around under Biden’s green energy proposals.
US core PCE inflation came in stronger than expected in April, rising to 3.1%Y/Y (vs 2.9% exp) from 1.9%. pic.twitter.com/6VrOw2Bu4I
— James Foster (@JFosterFM) May 28, 2021
One truth:
The media have mostly gotten one fact right: Biden is spending more money, and heaping up more debt, than any president at any time since World War II. “The levels of taxation and spending in Mr. Biden’s plans would expand the federal fiscal footprint to levels rarely seen in the postwar era,” reported Tankersley.
What’s the bottom line?
The Biden administration has mostly succeeded in planting its talking points in the legacy media, with little analysis, perhaps in part because of its release on the Friday before Memorial Day.
“This is the blueprint for your entire plan for the country,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “It deserves transparency and attention, and trying to hide it right before everybody’s making a mad dash for the beach for the first time in over a year isn’t really the way we should govern.”
It also deserves greater scrutiny from the media on behalf of the taxpayers who will see their family’s income taxed in order to pay for the priorities of inside-the-Beltway politicians.
The views expressed in this piece are the author’s own and do not necessarily represent those of The Daily Wire.
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