President Joe Biden released his proposed $5.8 trillion federal budget for 2023, a fiscal endeavor involving a blend of new spending requests and tax hikes without the broader Build Back Better agenda. The key snippets of the latest Democrat deficit-financed blueprint tackle crime, support global health security, raise military and defense spending, and penalize corporations and wealthy Americans. All this while trimming the federal deficit over the next ten years. Very ambitious.
“All told, it is a budget that includes historic deficit reduction, historic investments in our security at home and abroad, and an unprecedented commitment to building an economy where everyone has a chance to succeed,” President Joe Biden said in a statement.
The Nooks and Crannies
The administration is requesting $31 billion in new defense spending, raising the total military budget to $813 billion. This includes $6.9 billion allocated to NATO, European defense, and Ukraine. The White House says spending more on the Pentagon is crucial for deterring Russia and countering China. Despite the overall increase, the budget will actually reduce the number of soldiers. “Amid a major land war in Europe, the Biden administration’s fiscal 2023 budget request would temporarily shrink the active duty Army to 473,000 troops if enacted by Congress,” Army Times reports.
The administration claims approximately $32 billion will be spent on countering crime across the country. This includes $20.6 billion for the Justice Department and an additional $3.2 billion for state and local law enforcement agencies to hire more police officers. Analysts purport that this is a far cry from the Democrats’ calls of defunding the police in recent years. Over the last three years, crime rates have gone up, including homicides in major US cities, swelling 5% year-over-year.
Nearly $11 billion will be allocated to international health security to fight COVID and future pandemics. However, an extra $40 billion will be directed to the Department of Health and Human Services to invest, produce, and deliver countermeasures for top-priority threats; the funds will go toward vaccines, personal protective equipment, and therapeutics. Another $28 billion will be given to the Centers for Disease Control and Prevention (CDC). Also, $12.1 billion will go to the National Institutes of Health (NIH) for the research and development of vaccines, therapeutics, and diagnostics against biological threats.
Biden aims to dedicate $3.3 billion to clean energy projects and $18 billion to climate resilience programs.
Where Will the Money Come From?
For the mainstream press, it is not so much what is being spent but rather how the federal government plans to raise money. The White House fact sheet lists a series of measures to fill Washington’s coffers:
- Increase the corporate tax rate to 28%, up from the current 21%.
- Raise the top individual tax bracket to 39.6%.
- Slap a 20% minimum levy on the top 0.01% of earners and households worth more than $100 million.
- Repeal tax breaks for oil and gas companies.
- End the carried interest loophole for investment funds.
Perhaps the biggest whopper is deficit reduction, with Biden claiming that “the largest ever one-year decline in our country’s history” occurred last year. He also plans to cut the deficit by $1 trillion over the next decade, meaning that Uncle Sam will be a laughable $1.8 trillion in the red by 2032. First, last year’s drop took place because many COVID-related emergency funds expired and the economy reopened, allowing revenues to normalize. Second, shedding $1 trillion in a ten-year span is a drop in the bucket when the government is running trillion-dollar-plus imbalances each year, which has been the case for much of the last 20 years, and adding to the national debt.
Over the next ten years, deficits are predicted to total $14.4 trillion. This will increase the national debt to a record 107% of GDP by 2031, up from 102% today. Only in Washington can the budget imbalance apparently shrink while also accelerating simultaneously.
Plus, how can the White House get its deficit forecasts right when its inflation and economic predictions are outdated or subdued? Biden’s proposed budget anticipates a 4.7% inflation rate this year and 2.3% in 2023. The median forecasts in the private sector are 6.2% and 2.6%. Its gross domestic product (GDP) estimate for 2022 is 3.8%, higher than the Federal Reserve’s expectation of 2.8%.
More of the Same Statism
Punishing the rich and pledging to bribe the voters with their own money is low-hanging fruit, a go-to strategy for leaders in every election cycle. Biden’s 2023 budget maintains this theme. But will it be a successful tactic ahead of the midterms in November? When Biden’s approval rating is the lowest it has been during his time in the Oval Office – 40% – the administration will utilize every tool in its arsenal, including a right-handed, Will Smith-style slap to fiscal responsibility, to hold on to the trifecta of power.
The White House’s latest fiscal campaign ostensibly keeps an eye on pandemics, grapples with fresh problems gripping the homeland and the international community, and spouts misleading or false information and forecasts. As is the norm in the nation’s capital, Democrats will aim high, Republicans will slightly push back, and the two parties will meet somewhere in the middle. The endgame is the same as other budgets of the last 30 years: growing the size and scope of the government.
As the seminal economist Thomas Sowell, perhaps one of the most quotable US economists in history, stated: “Politics is the art of making your selfish desires seem like the national interest.”
~ Read more from Andrew Moran.