President Biden will unveil his budget on Thursday, a proposal that the White House says would reduce the deficit by $3 trillion over 10 years.
Since Congress controls the purse strings — and Republicans control the House of Representatives — the plan is more of a political exercise than a practical roadmap for spending. Rather, it's an opening volley in a high stakes political fight over government funding and the debt ceiling, and is something that Biden can point to during what's expected to be a second run for the White House in 2024.
Biden is set to formally release the plan in a speech in Philadelphia, going to a politically critical state to draw attention to something that is often little more than a document dump.
"We see this as a values statement," said White House press secretary Karine Jean-Pierre on Wednesday. "And so he wanted to make sure that it was fiscally responsible."
No matter the party in power, presidential budget proposals are almost always dead on arrival in Congress. "It's not gonna happen," said Bob Bixby, executive director of the Concord Coalition, a group that advocates for fiscal responsibility. "It's a campaign document."
And even if Biden's budget plan did come to pass, it wouldn't be enough, Bixby said. Bixby noted that the Congressional Budget Office is projecting $20 billion will be added to the national debt over that period, driven by an aging population, rising healthcare costs, higher interest rates on the debt and the compounding of tax cuts passed during the Trump administration.
The government would need a plan that cuts the deficit by more than twice what Biden is proposing to keep the debt from rising as a percentage of the economy, Bixby said.
"Hold on to your seat belts: the debt is going up," he said.
Here's what Biden's plan would involve
The budget will lay out plans to cover the costs for longstanding Biden priorities like child care, universal preschool, and free community college.
Biden proposes to let Medicare negotiate prices for a broader range of prescription drugs. Some of this was allowed under last year's Inflation Reduction Act.
There's a proposal to allow people on Medicaid to get access to certain HIV/AIDs and Hepatitis C treatments that the White House said would ultimately save taxpayer money and provide better care.
There are a range of tax increases on the wealthy in the budget. White House said the plan would cut tax breaks for oil and gas companies and for real estate investors, and end tax breaks used by the wealthy, including the carried interest tax break. There are some other proposals to raise taxes on the wealthy as well.
The plan would also end a tax break used by cryptocurrency transactions.
The budget is grist for the debt ceiling debate
Washington is focused on fiscal issues at the moment because Congress needs to raise the debt ceiling this summer, or the U.S. government will run out of cash to pay its bills.
Republicans have said they will work to extract spending cuts from the White House as a condition for raising the debt limit. They say spending is out of control.
"I do not believe raising taxes is the answer," House Speaker Kevin McCarthy told reporters in a prebuttal press conference on Wednesday. McCarthy complained that Biden has dragged his feet on negotiations over the debt ceiling after an initial meeting in early February.
"That's a month wasted. That's a month that brings more doubt financially. That's a month that hurts Americans," McCarthy said.
But Republicans haven't said what spending cuts they favor. Biden's budget will put the ball in their court.
"We'll analyze his budget, and then we'll get to work on our budget," McCarthy said.
Biden has been spending more time talking about deficit reduction in his speeches, regularly touting a $1.7 trillion drop in deficit spending during his presidency.
What he typically doesn't mention is that the reduction occurred because expensive pandemic-era programs came to an end at the same time the economy performed better than expected. Bixby says that was the easy kind of deficit reduction. Everything that comes next will be hard.
Biden has goaded Republicans about wanting to cut Medicare and Social Security, though McCarthy has said cuts to the big programs are off the table.
NPR's Lexie Schapitl contributed to this report.
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