by washington – President Biden plans to go on the offensive against Republicans, saying in effect that his policies would add $3 trillion to the national debt.
Ahead of Biden’s remarks to union workers on Wednesday in Lanham, Maryland, the White House released a white paper that questions the Republican Party’s sincerity in reducing the deficit.
The White House is accusing the Republican Party of hypocrisy for favoring fiscal policies that could increase the accumulated national debt of $31.4 trillion. However, Biden also wants to preserve some of the same tax cuts as Republicans, as long as the approach is “fiscally responsible.”
The speech is the latest evolution of a political and economic debate that will span several months. Biden and House Speaker Kevin McCarthy need to reach a deal by mid-summer in increase the government’s legal borrowing authority or else the government may not have the resources to pay its bills and default.
McCarthy says they must agree on a path to balance the budget, posting on Twitter last Friday: “No more blank checks for runaway government spending.”
The president detailed a recent exchange with the GOP spokesman in a Tuesday speech in Washington to county government officials. He told them that McCarthy “made it pretty clear to me what he wants to do. He says he’s not going to raise anybody’s tax. He just wants to cut programs.”
The president said Republican lawmakers must present their budget plan to the public, just as the White House intends to do on March 9.
“I believe we could be fiscally responsible without risking — threatening to lead our country into chaos,” Biden said Tuesday of debt limit talks.
But the actual path of the national debt may depend on the expiration of the individual tax cuts that President Donald Trump signed into law in 2017. The extent of those tax cuts would, in theory, increase the national debt, as the nonpartisan Congressional Budget Office based its projections on in they will expire after 2025. The CBO will release an updated budget outlook on Wednesday.
The White House briefing said Republicans would increase debt by $2.7 trillion by extending those tax cuts, as well as cutting a minimum corporate tax set by Biden and other policies that would increase debt.
The White House noted that the Trump-era tax reform extension would give a $175,000 tax cut to families with incomes above $4 million. The size of this tax cut is roughly twice the average US household income.
But the same White House briefing adds that Biden would like to preserve some of the same tax cuts as Republicans, but not ones that benefit the rich. Biden pledged during the 2020 campaign not to raise taxes on anyone earning less than $400,000, so letting the tax cuts expire could be seen as a tax hike for the middle class.
The Tax Policy Center, a think tank, estimated when the law was passed that 53% of taxpayers would see their IRS bills increase in 2027 after the cuts end. About 70% of those solidly in the middle class – the middle 40% to 60% of all taxpayers – owe more.
The fact sheet informing the speech said the president is committed to a “fiscally responsible approach to continuing current tax policies” for people earning less than $400,000. Until Biden issues his budget, it’s not entirely clear what that could mean for the national debt, although he promised last week State of the Union address reduce deficits by $2 trillion.
That leaves Republicans and Democrats theoretically in agreement on keeping taxes low for most people, while leaders from both parties have pledged there will be no cuts to Social Security or Medicare.
Maya MacGuineas, chair of the Committee on a Responsible Federal Budget, said lawmakers must consider everything if deficit reduction is the goal.
“If we really want to fix our fiscal situation – as we should – policymakers must put all cards on the table, abandon their demagoguery and unite for the good of the American people,” she said in a statement.
