US President Joe Biden set out a $6tn budget proposal on May 28, the spending plan that includes steep tax increases for wealthier Americans.
The Biden budget includes a $1.5tn request for operating expenditures for the Pentagon and other government departments. It also incorporates two plans he has previously publicised – his $2.3tn jobs plan and a $1.8tn families plan.
The proposal also includes many programs and investments in the fight against climate change.
“Now is the time to build on the foundation that we’ve laid, to make bold investments in our families, in our communities, in our nation,” Biden told a crowd in Cleveland on May 28.“We know from history that these kinds of investments raise both the floor and the ceiling of an economy for everybody”, he added.
The proposal will pass only if gets the approval from Congress, where Republican Senator Lindsey Graham condemned it as “insanely expensive”.
Even Senator Mitch McConnell said it would “drown American families in debt, deficits, and inflation.”
Some economists, including Larry Summers, who advised Presidents Barack Obama and Bill Clinton, have warned such massive government spending could drive up inflation, forcing the Federal Reserve to raise interest rates, which would in turn raise the risk of a recession.
The Biden budget projects an additional $14.5tn would be added to US debt over the next decade.
However, White House estimates the plan would be completely paid for within 15 years as tax increases eat away at the deficit.