- Advertisement -spot_img
Wednesday, December 8, 2021

Biden’s plans raise questions about what America can or can’t do

WASHINGTON — As lawmakers debate how much to spend on President Biden’s sprawling domestic agenda, they’re actually arguing about a simple issue: affordability.

Can an already huge deficit country afford the spending space that the President envisions? Or, conversely, can it afford to wait for solutions to the larger social, environmental and economic problems that will cost years to come?

It is a secret battle over the fiscal future at a time when few MPs from either party have prioritized addressing debt and deficit. Each side believes that its approach will put the nation’s finances on a more sustainable path by enabling the strongest, most sustainable economic growth possible.

The debate has shaped a discussion among lawmakers as to whether to prioritize Biden’s initial proposal to dedicate $3.5 trillion over 10 years to programs and tax cuts that would curb greenhouse gas emissions, reduce child care Make it more affordable, expand access to college. and reducing the prices of drugs among other priorities. The smaller bill under discussion could increase the total amount of government spending on all current programs by about 1.5 percent to 2.5 percent over the next decade, depending on its size and components.

Mr Biden has proposed paying for it in full with a series of tax hikes on businesses and the wealthy – including raising the corporate tax rate, increasing taxes on multinational corporations and cracking down on the wealthy who evade taxes. As well as reducing government spending on prescriptions. Medicines for Older Americans.

As negotiations continue, Democrats are considering withdrawing or jettisoning the program to reduce the final price by hundreds of billions of dollars so that it can pass the House and Senate along party lines. A key part of Mr Biden’s climate agenda – a program to rapidly replace coal and gas-fired power plants with wind, solar and nuclear power – is likely to be removed from the bill because of coal-state senators’ objections: Joe Manchin III, Democrat of West Virginia.

Discussions have focused on Washington’s practice of using long-running budgetary gimmicks to pay for programs, as well as beginning a new kind of discussion of what affordable really means.

The debate about what the United States could spend was judged for its growing budget deficit and warnings that the government, which spends more than it did, could leave future generations with mountains of debt, sluggish economic growth, runaway inflation, and heavy The burden can bother you. tax hike. But those worries went away after there was no such crisis. for economic stimulus under President Barack Obama and President Donald J. Despite tax cuts under Trump, the country experienced sluggish inflation and low borrowing costs for a decade following the 2008 financial crisis.

In its place is a new debate, which focuses on the long-term costs and benefits of government spending decisions.

Many Democrats fear the United States cannot afford to help curb climate change, get more women into the workforce, and invest in feeding and educating its most vulnerable children. In his view, failing to invest in those issues means that the country risks painful costs that will slow economic growth.

“We can’t make investments like this,” David Kamin, deputy director of the White House National Economic Council, said in an interview.

Take climate change: Democratic think tank Third Way estimates that if Congress passes an aggressive plan to reduce greenhouse gas emissions, U.S. companies will continue to build and deploy low-emission energy such as wind and solar power and energy. Will invest an additional $1.3 trillion. efficient technologies over the next decade, and $10 trillion by 2050. White House officials say the federal government will face rising costs for relief and other aid to victims of climate-related disasters like wildfires and hurricanes if the country fails to reduce emissions.

“They are table stakes for reconciliation and infrastructure debates,” said Josh Freed, senior vice president for climate and energy at Third Way. “That’s why we think the cost of inaction from an economic point of view is so high.”

But for some centrist Democrats, who have expressed deep objections about spending $2 trillion on a bill to advance Biden’s plans, “affordable” still means what it did decades ago: Not included in federal debt. The budget deficit has widened in recent years, reaching $1 trillion in 2019 from additional spending and tax cuts that didn’t pay for itself, up from $3 trillion last year to combat the first coronavirus pandemic. between expenses.

Mr Manchin says he fears that too much additional spending will lead to rising inflation, which could drive up borrowing costs and make it harder for the country to manage its budget deficit. He has made it clear that he wants the final bill to raise more revenue than expenditure to reduce future deficit and risk of debt crisis.

Republicans, who have vowed to fight either version of the spending bill, argue that the national economy cannot afford the high-income and businesses tax burden that Democrats propose to help offset their plans. Have given. He says that while the recovery from the pandemic slowdown remains fragile, growth will slow down.

“The tax hike is going to slow growth, drive down wages and drive American jobs overseas, and impact small businesses,” said Representative Kevin Brady of Texas, the top Republican on the Ways and Means Committee. “There will be a significant economic price for all this spending.”

Fiscal Hawke in Washington says Democrats could opt for making the bill more financially responsible, such as only programs that are offset with permanent tax increases. But they say even making the bill “affordable” may not be enough, as Mr Biden and his party will be dedicating new revenue to new programs at a time when the US population is aging and to Social Security and Medicare. Rising costs are projected to increase losses. They fear there may be a limited number of tax hikes that lawmakers are willing to approve.

Reducing the deficit “isn’t really very low-hanging fruit,” said Maya McGinnis, chair of the Committee for a Responsible Federal Budget, a nonprofit in Washington. “But we are taking the lowest-hanging fruit of paying for a major expansion of government before we even figure out how to pay for the government we have.”

Mr. Biden, whose entire economic agenda is wrapped up in the Social Policy Bill, has tried to complicate the issue. He has insisted that the package be paid in full, but he has also insisted that it be as big as his caucus will allow.

His spending plan, Mr Kamin said, “will expand the economy, leave American workers in a better position and address major costs that are now being passed on to generations to come.”

Mr Kamin dismissed Mr Brady’s argument, saying decades of Republican tax cuts had failed to create the economic boom his supporters had promised and that taxing corporations and the wealthy would not stop growth.

The president is pushing the House to approve a $1 trillion bipartisan infrastructure bill that will pass the Senate this summer, which its sponsors say will boost the economy by improving highways, rail service, the electric grid and more. will promote development.

Some programs with large spending bills may attempt to address the affordability question by using the sleight of hand that both parties have long employed. Democrats may make some programs temporary, such as the expansion of the Expanded Child Tax Credit, so that the bill complies with the rules of a budget process that Democrats are employing to bypass the Senate filibuster.

But budget experts estimate the programs may be difficult to dismantle once they are finished. Other temporary tax deductions and spending increases remain in place long after their expiration dates, such as brakes for wind power and racetrack ownership. Republicans used the tactic to reduce the cost of their 2017 tax cuts by setting all of their tax deductions for individuals expiring in 2025.

To expand their own programs and tax cuts or make them permanent, Democrats will have to either add to the deficit or require additional tax increases or spending cuts they hope to pass this year. Mr Kamin and other White House officials say Mr Biden and congressional leaders have identified trillions of dollars in potential revenue growth to cover the expansion of those programs, although many of those provisions have left the House and Senate Has struggled to attract enough Democratic support to pass. .

Mr. Biden has repeatedly said that Americans earning $400,000 or less per year will pay nothing for that bill, and that all new spending and tax deductions will be reimbursed. But he said the same thing about the bipartisan infrastructure bill, which budget experts call delusional revenue collectors. The nonpartisan Congressional Budget Office said the bill would add more than $250 billion to the deficit.

World Nation News Deskhttps://www.worldnationnews.com
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
Latest news
Related news
- Advertisement -

Leave a Reply