WASHINGTON – President Joe Biden will propose $ 5 trillion in new federal spending over the next decade on Friday, part of his fiscal 2022 budget proposal, a source familiar with the proposal told CNBC.
The new expenses would be paid in part by additional revenue of $ 3.6 trillion over the same period. The result would be a net deficit of $ 1.4 trillion that would begin to shrink after 2030.
Biden will include $ 300 billion of the total of $ 5 trillion in his budget proposal to Congress for fiscal year 2022. That will bring the president’s total budget proposal for the next year to $ 6 trillion, the source said.
Biden’s budget also assumes inflation will not exceed 2.3% a year for the next 10 years, reflecting the government’s belief that some economists’ concerns about runaway inflation are exaggerated.
As with all of the President’s budgets, the vast majority of the money in Biden’s 2022 budget proposal will be spent on programs that the federal government is required to fund, including Medicare, Medicaid, and Social Security.
In addition, Biden has applied for a $ 1.5 trillion discretionary fund, half of which is for defense purposes.
The President’s new spending, $ 5 trillion over 10 years, is designed to fund the two pillars of his broad national agenda: the American Jobs Plan and the American Families Plan.
The former would make significant investments in both traditional infrastructure and green technologies, which Biden says is critical to America’s competitiveness in the global economy. It would also support the US electricity grid, expand broadband access and improve the supply of elderly and disabled people.
This second track includes additional funding for two years of free universal Pre-K and two years of free community college. It also funds heavily subsidized childcare for middle-class families, federal paid family vacations, and expanded child tax credits.
The total cost of these two programs is $ 4.1 trillion over the next decade and would be paid mostly through higher taxes on businesses and the wealthiest taxpayers.
The White House is currently negotiating a potential bipartisan infrastructure deal with the Senate Republicans. However, these negotiations are separate from the budget request for fiscal year 2022.
The president’s budgets usually consist of a part of the plan and a wish list that are intended to illustrate the president’s political priorities and inform the appropriators of Congress.
Budget proposals from the President also depend on Congress to pass them. With the Democrats in control of both houses this year, Biden stands a far better chance of getting his budget into effect than most of his most recent predecessors.
In 2016, former President Barack Obama’s final year in office, Republicans who controlled both the House and the Senate, overall disregarded his budget.