Billionaires tax, funding the police and defense spending: 5 takeaways from Biden's budget plan

WASHINGTON – President Joe Biden proposed increasing taxes on America's wealthiest households Monday in a budget blueprint that looks to cut the deficit while boosting military spending, funding for cops and a range of domestic priorities, including mental health and housing.

Biden requested a $5.8 trillion budget from Congress for the 2023 fiscal year, which begins in October, that includes $1.6 billion on discretionary programs, a 7% increase over the current year. The linchpin is a "minimum tax on billionaires" that targets roughly the country's highest 700 earners.

Although Congress decides federal government spending, the president's budget reflects his priorities as Democrats face an uphill fight to retain control of the House and Senate during November's midterm elections. Biden's reinvigorated domestic agenda comes as much of his focus has been overseas on the crisis in Ukraine and after his Build Back Better domestic program stalled in Congress over the winter.

"Budgets are statements of values," Biden said in a statement, "and the budget I am releasing today sends a clear message that we value fiscal responsibility, safety and security at home and around the world, and the investments needed to continue our equitable growth and build a better America."

Here are five takeaways from the budget:

New billionaires tax

Biden proposed a 20% minimum income tax on multimillionaires and billionaires that the president billed as a fairer tax code that would prevent the nation's highest earners from paying a smaller share than middle-class Americans. 

The tax would apply to American households with more than $100 million – about .01%, representing the 700 richest Americans. It could create an additional $361 billion in tax revenue over the next decade.

The tax proposal – which delivers on liberals' rallying cry for a wealth tax – comes amid a debate over the uneven distribution of wealth in the USA and whether the super rich pay their fair share. Biden pledged during his campaign to raise taxes on the wealthy but vowed no one who makes less than $400,000 a year would see an increase. He repeated that promise again Monday.

“The wealthy and corporations will finally begin to pay their fair share,” Biden said as he unveiled his budget. While most Americans were “stretched to the breaking point” the past few years, he said, billionaires and large corporations “got richer than ever.”

“Now I’m a capitalist,” the president said. “If you make a billion bucks, great. Just pay your fair share.”

The White House said the tax system's "special treatment" for the wealthiest Americans allows them to pay an average of 8.2% in federal income tax, a lower proportion than teachers, firefighters and other working-class professions. Biden reintroduced proposals to increase the corporate tax rate to 28% and establish a global minimum tax for multinational corporations. 

Biden said his budget seeks to ensure the rich and corporations pay their "fair share," but it could face roadblocks in the evenly divided Senate. 

The White House failed last year to increase the corporate tax rate and capital gains tax as part of the president's Build Back Better social spending plan. Republicans are likely to oppose the tax on the wealthy, so Biden would need to win the support of Sens. Joe Manchin, D-W.Va., and Kyrsten Sinema, D-Ariz. – the two moderate Democrats whose opposition doomed Build Back Better.

Fact check: $1.5 trillion spending bill passed with bipartisan support in Congress

Refunding the police 

Biden's budget includes $30 billion in mandatory funding for law enforcement, including police departments, as well as $3.2 billion for local and state grants to support police.

Republicans have sought aggressively to tie Biden and Democrats to the "defund the police" mantra of the left amid rising crime in some of the nation's largest cities. Biden has repeatedly said he opposes defunding the police, making that point most publicly during this month's State of the Union address.

"I've said it before," Biden said Monday. "The answer is not to defund our police departments. It's to fund our police and give them all the tools they need."

The funding would build on Biden's push last year to encourage cities and states to use portions of their direct funding from the American Rescue Plan on public safety. The move could open the door to criticism from the most liberal members of Congress, who have advocated for smaller police budgets, particularly in the wake of high-profile police shootings and killings of Black Americans.

The president requested an additional $1.7 billion to expand gun-tracking strike forces for the Bureau of Alcohol, Tobacco, Firearms and Explosives; $367 million for the Justice Department to support police reform, the prosecution of hate crimes and voting rights enforcement – an increase of $101 million over the current year; and $106 million for body-worn cameras for federal law enforcement officers.

Future of law enforcement:Fewer than 1 in 5 support 'defund the police' movement, USA TODAY/Ipsos Poll finds

Deficit reduction

The White House projects Biden's budget would decrease the deficit by $1 trillion over the next 10 years; however, that's contingent on passage of the plan to increase taxes on billionaires.

For years, Republicans have tried to paint Democrats as reckless spenders who have driven up the national debt, which surpassed $30 trillion for the first time last year. Economists warned that the spike was fueled in part by the coronavirus pandemic and years of unsustainable government spending that could have long-term consequences for every American.

Mounting debt can impact the health and economic security of Americans in numerous ways – hitting their pocketbooks through higher interest rates, for example, or siphoning off government funding needed for other programs. 

The GOP ramped up its attack on Democratic spending after passage of Biden's $1.7 trillion American Rescue Plan and $1.2 trillion infrastructure law last year.

Biden and Democrats countered by pointing to President Donald Trump's tax cuts on corporations in 2017 as the biggest contributor to rising national debt and the deficit. 

According to the White House, the deficit decreased during Biden's first year in office by about $300 billion.

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More defense spending

In a move likely to upset some liberal Democrats, Biden requested a $773 billion Defense Department budget, an increase of $69 billion, or 9.8%, over 2021. The budget includes $795 billion overall for defense proposes, a 4% bump over the current year.

The White House framed the increased defense spending as necessary to keep pace with China and strengthen deterrence in the Indo-Pacific region. Biden has repeatedly cast China as the chief authoritarian threat on the world stage. Russia's invasion of Ukraine has magnified the question of China's role in the world and has worsened tensions between Washington and Beijing.

The White House pointed to other "persistent threats" from Iran, North Korea and violent extremist organizations.

On top of the Defense Department's spending, the budget includes $6.9 billion to support the European Deterrence Initiative, NATO and other efforts to boost Ukraine's efforts to fight Russia's invasion. The budget includes an additional $1.8 billion for the State Department to support democracies in the Indo-Pacific region and $400 million to support democratic activities in communist China.

Mental health care, affordable housing top domestic priorities

The budget includes $915 billion for domestic programs, and the remaining balance would go to Social Security, Medicare, Medicare and other mandated programs.

Biden proposed additional funding targeting the nation's "mental health crisis" through health reforms and investments in the behavioral health workforce. This includes what the White House said would be "historic" spending levels for youth mental health and suicide prevention programs.

There is growing concern among public health officials and the public over mental health issues.

An overwhelming majority of Americans polled in January said they believe the USA is in the grips of a full-blown mental health crisis, according to a USA TODAY/Suffolk University poll. Public health officials have warned that the COVID-19 pandemic had a devastating effect on the mental health of young people who already had been struggling at an alarming rate with feelings of helplessness, depression and thoughts of suicide.

Biden's budget proposes $81.7 billion for pandemic preparedness over the next five years, as well as $9.9 billion for the Centers for Disease Control and Prevention to support local and state immunization programs and expand public health infrastructure. An additional $470 million would be set aside to reduce maternal mortality and morbidity rates, which are disproportionately high for women of color. 

Biden requested $50 billion for the construction and supply of affordable housing, $372 million for manufacturing innovation and $200 million for solar energy manufacturing. 

Contributing: The Associated Press

Reach Joey Garrison on Twitter @joeygarrison and Michael Collins @mcollinsNEWS.

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