- President Joe Biden released a proposed budget for fiscal year 2025.
- The budget seeks to restore the expanded child tax credit and keep Social Security benefits intact.
- It also proposes a tax increase on billionaires, companies, and firms giving executives big paydays.
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President Joe Biden is gearing up to propose his next budget — which the White House says includes greater support for families and higher taxes on the wealthy.
It faces a tough road to pass the House.
Biden’s budget for fiscal year 2025 seeks to restore the expanded child tax credit first enacted under the American Rescue Plan; that legislation meant parents received a beefed-up, refundable credit partially through monthly checks — ultimately halving child poverty. The proposal comes as a tax bill that would partially expand the child tax credit lingers untouched in Congress. The budget also seeks to lower childcare costs so that families earning less than $200,000 would pay $10 or less per day of care and to enact a national program for paid family and medical leave.
“Families need more breathing room, and that’s why the budget includes proposals to bring down the costs of everyday healthcare costs, drug prices, and expand access to prescription drugs,” Shalanda Young, the director of the Office of Management and Budget, told reporters during a Monday press call.
“It cuts costs for families with children and American workers and lowers childcare costs for hardworking families,” Young added. “It increases the federal housing supply to reduce housing costs, expands access to homeownership and affordable rent, and reduces down payments for first-time, first-generation homebuyers with a new mortgage-relief credit, and it reduces the cost of college and lifts the burden of student debt.”
Released on Monday, the budget aims to boost funding for federal agencies — but all Biden’s requests require congressional approval. Along with the restored child tax credit, the president is seeking to strengthen Social Security and Medicare by ensuring Americans would not face any cuts to the benefits, with a $1.3 billion increase to the Social Security Administration’s budget to help the agency better facilitate customer service for those relying on the benefits.
“This president will not entertain proposals to cut any benefits from hardworking Americans who have paid into their system their entire working lives,” Young said, adding: “If you make a million dollars in this country, you are done paying your Social Security taxes sometime in February. Is that fair? And we don’t think so.”
The budget also focuses on tax policy for the other side of earners, again proposing a minimum income tax on billionaires and hiking the corporate tax rate to 28%. It also seeks to raise the corporate minimum tax rate established under the Inflation Reduction Act from 15% to 21% and to restore IRS funding dedicated to cracking down on high earners dodging what they owe. Biden also wants to disincentivize firms from giving their top executives big paydays, proposing that any corporation that pays any employee over $1 million would be denied deductions.
Other key elements of Biden’s budget request include boosted funding for the Federal Student Aid office to facilitate the repayment transition for millions of student-loan borrowers, further investments in climate programs, and efforts to support more affordable housing in the country.
With Republican lawmakers controlling the House, however, it’s unlikely Biden’s budget request will be approved in its current form. Over the past few years, Republicans have proposed cuts to various Democratic-led programs — in its plan released in September to avoid a government shutdown, the GOP included cuts to educational programs and nutritional-assistance programs.
And any proposals to raise taxes on the ultrawealthy are most likely dead on arrival, with even Democrats unable to pass legislation on their own that would hike rates for higher earners and companies.
Would a restored child tax credit or maintained Social Security benefits impact your life? Contact these reporters at jkaplan@businessinsider.com and asheffey@businessinsider.com.
