WASHINGTON – President Joe Biden will propose new federal spending of $ 5 trillion for the next decade on Friday as 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 predicts inflation will not exceed 2.3% a year for the next 10 years, reflecting the government’s belief that some economists’ concerns about inflation sprawling are exaggerated.
As in 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.
Additionally, Biden has requested $ 1.5 trillion in discretionary funds, half of which is for defense.
The President’s new spending, $ 5 trillion over 10 years, is designed to fund the two pillars of his broad domestic agenda: the American Jobs Plan and the American Families Plan.
The former would make huge investments in both traditional infrastructure and green technology, which Biden says is critical to making America competitive in the global economy. It would also prop up the US electrical grid, expand broadband access, and strengthen care for the elderly and the disabled.
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 tax breaks for children.
The combined cost of these two programs is $ 4.1 trillion over the next decade and would be largely paid for in higher taxes for businesses and the wealthiest taxpayers.
The White House is currently negotiating a potential bipartisan infrastructure deal with Senate Republicans, but these negotiations are separate from the budget requirement for FY2022.
Presidential budgets typically consist of a sub-plan and a wish-list that are designed to both illustrate the president’s political priorities and inform the appropriators of Congress.
Budget proposals from the President also depend on Congress passing them. But with the Democrats in control of both houses this year, Biden stands a far better chance of his budget translated into law 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 Senate, completely disregarded his budget.