Biden budget has priorities for Manchins: Tax rich, deficit cut | Business and finance

WASHINGTON (AP) — President Joe Biden’s $5.8 trillion budget for next year reduce federal deficits and raise taxes on the wealthiest Americans. The two could tap Sen. Joe Manchin in the Democratic hope of reigniting talks with him on the party’s derailed social and environmental plan.

The question is whether this time the pivotal Democrat from West Virginia can be wooed to craft a scaled-down version of his party’s roughly $2 trillion 10-year package. Before Christmas, Manchin sank this plan, which had already passed the Chamber, saying it would fuel inflation and widen deficits.

Biden and his aides touted his budget, unveiled Monday, as focusing on fiscal responsibility, homeland and overseas security and investing in social programs to help families afford housing, childcare , health care and other costs.

“An unprecedented commitment to building an economy where everyone has a chance to succeed. A plan to pay for those investments that we need as a nation,” Biden described as he outlined his budget to reporters.

Republicans rejected Biden’s priorities.

Senate Minority Leader Mitch McConnell, R-Ky., said the president’s defense proposal would “at best leave our armed forces in place” because of inflation. He said bigger budgets for agencies like the IRS and the Environmental Protection Agency were “bloated liberal nonsense.” And he called Biden’s 10-year, $2.5 trillion tax hikes, which the president said would affect only the nation’s top earners, a “tax hike bomb.”

McConnell’s review was no surprise. Presidents’ budgets are usually ignored or reworked by Congress and mocked by the opposition party, a moment that allows both sides to draw useful battle lines in the upcoming election.

But Biden’s budget can also be seen as a step to lure Manchin, arguably the most conservative Democrat in the Senate, to the negotiating table. Manchin on Monday played down reports that he had resumed talks with top Democrats on a new plan.

“No, there’s nothing serious there,” he told reporters on Monday. But he also said any new packages should be completed by early summer because the fall Congressional campaigns could make too much progress later.

While much of Biden’s budget was similar to last year’s, it was also a more centrist repackaging that reshaped some of his focus in Manchin’s leadership.

His $795 billion defense plan includes a raise for the Pentagon and a plan to help law enforcement hire more officers and improve training. “The answer is not to defund our police departments,” Biden told reporters, a sharp rebuke of a rallying cry embraced by some progressives but repudiated by nearly all Democrats.

His new revenue stream helps Biden claim his plan would cut deficits by more than $1 trillion over the next decade — a goal that was not highlighted last year. However, just over two-thirds of deficit reductions would come in the final five years of the plan, postponing the most painful cuts and suggesting they may never happen.

The new revenue would also be used to cut costs for families, Biden said, as Democrats face the country’s fight against inflation that has become a major political handicap.

Reduce budget deficits. Fighting inflation and increasing the incomes of the wealthy are also major requirements for Manchin.

“He remains seriously concerned about the financial situation of our country and believes that fighting inflation by restoring fairness to our tax system and paying down our national debt must be our first priority,” his spokesman said on Monday. , Sam Runyon.

Manchin, chairman of the Senate Energy and Natural Resources Committee, has repeatedly said he wants any new package to focus on national energy independence. He also wants an “all of the above” policy that fights climate change but helps all forms of energy.

Representing a state that relies heavily on coal and energy production, Manchin and his position gained political influence due to Russia’s invasion of Ukraine.

“What Russia has produced needs to be replaced,” he said, referring to the US cutoff of oil imports from that country.

Of the $2 trillion bill approved by the House, $555 billion was earmarked for tax relief and other initiatives to encourage the shift to cleaner energy. At Manchin’s insistence, this bill abandoned the original plan’s biggest effort to achieve this by offering financial rewards or penalties to energy producers.

Manchin also expressed support for including provisions that reduce prescription drug costs. The previous bill would have done this by strengthening the government’s ability to negotiate the prices it pays for certain pharmaceuticals it purchases, which would have saved the government money.

Nonetheless, the White House has kept a few details to itself about what it might offer Manchin in the talks.

The budget documents said it included some revenue proposals like prescription drug pricing in a “deficit-neutral reserve fund.” He did not provide details “because discussions with Congress are ongoing,” the documents say in a footnote.

Biden’s proposed new minimum tax for the wealthiest Americans likely faces an uphill battle. Manchin has backed higher taxes on the wealthy and big business, but he suggested on Monday that Biden’s plan has complications.

“There are other ways for people to pay their fair share,” he said.

A somewhat similar tax on billionaires last year by Senate Finance Committee Chairman Ron Wyden, D-Ore., never made it into the final package. And the bill passed by the House last year had already saved about $2 trillion, suggesting new proposals may not be needed.

Sen. Kyrsten Sinema, D-Arizona, opposed her party’s efforts to raise personal and corporate tax rates last year and apparently did not change her mind. Spokeswoman Hannah Hurley said Monday that Sinema likes proposals that “target tax evasion and ensure businesses pay taxes, without increasing costs for small businesses or ordinary Americans.”

Democrats will need all of their votes in the Senate 50-50, as all Republicans seem certain to oppose anything they produce. Vice President Kamala Harris would vote in the event of a tie.

PA Congressional Correspondent Lisa Mascaro contributed to this report.

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