President Biden on Monday will propose a budget filled with tax increases on corporations and high earners, new spending on social programs and a wide range of efforts to combat high consumer costs, such as housing and tuition.
The new spending and tax increases included in the 2025 budget have little chance of becoming law this year, given that Republicans control the House and strongly oppose Mr. Biden’s fiscal agenda. Last week, House Republicans approved a budget proposal outlining their priorities, which are a far cry from what Democrats have been asking for.
Instead, the document will serve as a blueprint for Mr. Biden’s political platform as he seeks re-election in November, along with a series of contrasts intended to distinguish him from his presumptive Republican rival, former President Donald J. Trump.
Mr. Biden sought to regain power on economic issues with voters who gave him low marks amid soaring inflation. This budget aims to present him as a champion of increased government aid for workers, parents, manufacturers, retirees and students, as well as fighting climate change. Mr. Biden’s budget proposes more than offsetting the costs of those priorities by raising taxes on big corporations and the wealthy. The president has already begun trying to portray Mr. Trump as the opposite: a supporter of further corporate tax cuts.
“A fair tax code is how we invest in the things that make this country great: health care, education, defense and more,” Mr. Biden said Thursday during his State of the Union address .
Later in the speech, in a call-and-response with Democrats in the room, Mr. Biden added: “Guys at home, does anyone really believe that the tax code is fair? Do you really think the rich and big corporations need another $2 trillion tax break? Definitely no. I will continue to fight like hell to make it fair.”
Polls show Americans are unhappy with Mr. Biden’s handling of the economy and favor Mr. Trump’s approach to economic issues. But Mr. Biden has been steadfast in his basic economic policy strategy, and the budget is not expected to deviate from that plan.
White House officials, previewing the budget release, said Mr. Biden would propose about $3 trillion in new measures to reduce the budget deficit over the next decade. This is in line with his budget proposal last year, which reduced deficits by raising taxes on businesses and the wealthy and allowing the government to negotiate more aggressively with drug companies to reduce prescription drug spending.
Mr. Biden is set to once again call for raising the corporate tax rate to 28 percent from 21 percent, the level that Mr. Trump set in the tax bill he signed in late 2017. Mr. Biden will propose also raising a new minimum tax for large corporations and quadrupling the tax on stock buybacks, among other efforts to raise more revenue from companies and individuals making more than $400,000 a year.
Those savings would be based on discretionary spending limits that Mr. Biden and congressional Republicans agreed to last year to resolve a standoff over raising the nation’s borrowing limit. But even if Congress agreed to all $3 trillion of Mr. Biden’s proposals, the deficit would still average about $1.7 trillion a year over the next decade, based on projections by the nonpartisan Congressional Budget Office.
House Republicans released a budget last week that seeks to reduce deficits much faster — balancing the budget by the end of the decade. Their savings were based on forecasts of economic growth that are well above mainstream forecasters’ expectations, along with steep and often unspecified spending cuts.
The nonpartisan Committee for a Responsible Federal Budget called the Republican plan “unrealistic in its assumptions and results.” Last year, the same group said Mr. Biden’s budget fell “well short of the deficit reduction needed to put the nation on a sustainable fiscal path.”
Mr. Biden and his aides have repeatedly said they are comfortable that projected shortfalls in his budgets will not hurt the economy. Instead of turning to more aggressive deficit reduction, as previous Democratic presidents have done after losing control of one chamber of Congress, Mr. Biden has leaned toward the need for new spending programs and targeted tax incentives.
White House officials said the new budget proposal would continue that trend. It will include a national paid leave program for workers. It would restore an expanded child tax credit that Mr. Biden temporarily created in his $1.9 trillion 2021 economic stimulus law, and that helped significantly reduce child poverty in the year before it expired.
It will also include new efforts to help Americans cope with high costs. That issue has dogged Mr. Biden with voters since inflation soared to the highest levels in four decades, even as price increases eased in the past year. Mr. Biden touted many of those efforts in his State of the Union address, including new tax credits for some homebuyers and expanded help for people to buy health insurance through the Affordable Care Act.
Mr. Biden is also set to call for new efforts to improve the solvency of Social Security and Medicare, though not the full overhaul of Social Security that he previewed in the 2020 campaign but has not carried through in office. He will oppose cuts to benefits for the programs, officials said, suggesting he favors a familiar strategy for bolstering them: raising taxes on high earners.
