President Joe Biden to take on republicans over $3 trillion debt to the national debt over the next decade. In a speech to union workers in Lanham, Maryland, Biden will argue that his budget plans will invest in America, lower costs, and protect and strengthen Social Security and Medicare while cutting the deficit by $2 trillion over 10 years.
The White House has also released a fact sheet that challenges the GOP’s sincerity on deficit reduction. The document accuses the Republicans of hypocrisy for favoring tax policies that could push the $31.4 trillion national debt even higher. Biden, on the other hand, is in favor of preserving some of the same tax cuts as the Republicans, but only if they are “fiscally responsible.”
The debate over the national debt is expected to continue for several months. Biden and House Speaker Kevin McCarthy must reach a deal on raising the government’s legal borrowing authority by mid-summer; otherwise, the government could default.
McCarthy has posted on Twitter that “No more blank checks for runaway government spending,” and Republicans argue that a path towards balancing the budget should be agreed upon.
In a speech to county government officials in Washington, Biden detailed his recent exchange with the GOP Speaker, who made it clear that he wants to cut programs rather than raise taxes on anybody. Biden believes that the government could be fiscally responsible without threatening to send the country into chaos.
However, the actual path of the national debt could depend on the expiration of individual tax cuts that former President Donald Trump signed into law in 2017. The nonpartisan Congressional Budget Office based its projections on the tax cuts lapsing after 2025, and extending them would theoretically increase the national debt.
The White House fact sheet reveals that Republicans would increase the debt by $2.7 trillion by prolonging those tax cuts, in addition to cutting a corporate minimum tax established by Biden and other policies that would add to the debt. The fact sheet notes that the extension of the Trump-era tax overhaul would give a $175,000 tax cut to families with incomes over $4 million, roughly double the median U.S. household income.
Biden has pledged not to raise taxes on anyone making less than $400,000. Still, letting the tax cuts expire could be viewed as a tax hike on the middle class. The Tax Policy Center estimated that 53% of taxpayers would see their IRS bills increase in 2027 after the cuts expire, and about 70% of those solidly in the middle class would owe more.
The fact sheet previewing the speech said the president is committed to a “fiscally responsible approach to continuing current tax policies” for people earning less than $400,000. It’s not entirely clear what that could mean for the national debt, despite Biden’s plans to cut deficits by $2 trillion over the next decade.
The Republicans and Democrats are theoretically in agreement on keeping taxes low for most people, and both parties have pledged not to cut Social Security or Medicare. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said that lawmakers should consider everything if the goal is deficit reduction.
“If we truly want to address our fiscal situation – as we should – policymakers should put all their cards on the table, abandon their demagoguing, and come together for the good of the American people,” she said in a statement.