Biden is expected to release his first budget proposal Friday, offering new details on how the administration would be spending $4.5 trillion and increasing taxes over the next ten years.
For the fiscal year 2022, Biden is proposing a $6 trillion budget, beginning October 1. The budget includes $1.52 trillion in discretionary spending for the military and domestic programs, including funding for education, healthcare, research and renewable energy, the Wall Street Journal reports.
Under the proposal, debt as a percentage of annual GDP would climb to 117 percent of the GDP by the end of 2031, which would be up from about 100 percent this year.
It is critical to mention that our GDP in 2020 was $20.93 trillion, while our current national debt is $28.3 trillion
The proposal, known as the American Jobs Plan and the American Families Plan, would add to deficits over the next decade, but hopefully be eventually offset by revenue from tax increases on wealthy Americans and corporations.
The plan would raise discretionary spending in fiscal year 2022 by 8.4 percent, or $118 billion, from the $1.4 trillion authorized last year, according to a preliminary proposal released in April.
Nondefense spending would increase 16 percent next fiscal year to $769.4 billion. Defense spending would increase 1.7 percent to $753 billion, much less than what republicans are likely to support.
Republicans, to no surprise, criticized Biden for his $1.9 trillion COVID-19 relief package, with trillions more proposed for infrastructure, education and child care. They argue that the aid is fueling inflation and giving people an incentive to not return to work.
“This is just a tax-and-spend administration on everything,” Sen. John Barrasso (R-Wyo.) said. “They’re disconnected from reality.”
Indeed, overall debt would skyrocket to the highest level ever.
But, administration officials are convinced that higher deficits in the short term will help increase long-term growth.