Biden’s $6.8 Trillion Budget Proposes New Social Programs and Higher Taxes
“We must cut wasteful government spending,” Mr. McCarthy and the other members of his leadership team said in a joint statement issued after Mr. Biden’s budget was released. “Our debt is one of the greatest threats to America, and the time to address this crisis is now.”
The budget sees the gross national debt increasing by about $18 trillion through 2033, rising to just above $50 trillion. But the administration suggests that growth will not threaten the economy. “The economic burden of debt would remain low and in line with recent historical experience over the next decade,” administration officials wrote in the proposal.
Last year’s budget painted a rosy and ultimately over-optimistic picture of the U.S. economy. The administration expected gross domestic product to grow 4.2 percent after adjusting for inflation, for instance, but it ultimately climbed by a more modest 2.1 percent.
The new budget’s projections were more muted, with a caveat. The White House sees the economy growing by only 0.6 percent after adjusting for inflation this year, a weak pace that is in line with outside expectations. It also predicted a substantial increase in the unemployment rate — to 4.3 percent, a notable rise from 3.4 percent in January. Alongside that slowdown, inflation is expected to moderate.
But officials noted that the administration completed its projections in November and that economic data had been stronger than expected since. Administration economists said in a blog post that unemployment “would likely be lower” than the official forecast in light of that.
Much of the budget’s contents were holdovers from Mr. Biden’s previous proposals. But there were also a few new plans. One of them was a tax on the energy used in creating new digital currency assets, known as cryptocurrency mining. That practice relies on large amounts of electricity and generates emissions that contribute to climate change.
Administration officials want to discourage the practice, which they say impedes the country’s energy transition. So they proposed a 30 percent tax on the electricity used in it, phased in over three years, whether that comes from an electric utility or a localized source like a home solar panel, on the theory that the energy involved would be put to better purpose in another use.
Reporting was contributed by Jeanna Smialek, Ana Swanson, Carl Hulse, Catie Edmondson, Zolan Kanno-Youngs and Alan Rappeport.