Manchin priorities in Biden budget: Tax rich, reduce deficit

President Joe Biden's $5.8 Trillion budget for next year would reduce federal deficits and increase taxes on the richest Americans. 

Manchin priorities in Biden budget: Tax rich, reduce deficit

Both could appeal to Senator Joe Manchin amid Democratic hopes for reviving negotiations with him over his party's derailment of the social and environmental plan.

It is now up to the West Virginia Democrat to decide if he can be wooed this time to create a smaller version of his party’s nearly $2 trillion, 10-year package. Manchin rejected the plan before Christmas. claimed it would increase inflation and worsen deficits.

Biden and his aides emphasized that his budget would be focused on fiscal responsibility, security at the home and abroad, and investments in social programs to assist families with housing, child care, and other costs.

A highlight was $2.5 trillion worth of tax increases in 10 years that were primarily targeted at the highest-income individuals and corporations. This included $361 billion from which is a minimum 20% tax for families with $100 million or more -- the highest one-hundredth percent of 1% earners --though it was criticised by Manchin.

Senator Majority Leader Chuck Schumer (D-N.Y.) said Tuesday that the budget called for more investments in the things that make a difference in the lives and livelihoods of middle-class families.

Biden's priorities were rejected by the Republicans.

Senator Mitch McConnell (Republican from Kentucky) said that the president's defense plan would best leave our armed forces "merely treading water" due to inflation. He claimed that larger budgets for agencies such as the IRS and Environmental Protection Agency are "bloated liberalnonsense" and called Biden's $2.5 trillion, 10-year tax increases, which he said would only impact the country's highest-earning citizens, a "bombof tax hikes."

McConnell's criticism was not surprising. McConnell's criticism was not surprising. Presidents' budgets are routinely ignored or reworked in Congress, mocked and ridiculed by the opposition party. This allows both sides to draw battle lines for future elections.

Biden's budget was unveiled Monday and can be seen as a move to lure Manchin, the Senate's most conservative Democrat back to the bargaining tables. Manchin, however, dismissed reports that he had resumed talks over a new plan with top Democrats.

He said to reporters, "No, there's not anything serious going on there." He said that any new package should be finished by the summer, as fall congressional elections could delay progress.

Although the budget for Biden was similar to that of last year, it was a more centrist package that shifted some of its focus in Manchin's favor.

It proposes $795billion for defense, which includes an increase in the Pentagon and money to support law enforcement's training and officers. Biden stated to reporters that the answer was not to defund police departments. This is a sharp rebuke of a progressive rallying cry, which has been rejected by almost all congressional Democrats.

Biden claims that the plan will reduce deficits by more than $1 trillion in the next decade, thanks to its stream of new revenue. This goal was not stressed last year. The plan would reduce deficits by just over two-thirds in its final five years. This puts off the most difficult reductions and suggests they may never occur.

Biden stated that the new revenue could also be used for lower family costs, as Democrats face the nation's inflation crisis, which has become a significant political liability.

Manchin is also required to reduce budget deficits, combat inflation and raise revenue from the rich.

Sam Runyon, his spokesperson, stated Monday that he remains deeply concerned about the country's financial condition and believes fighting inflation through fairness in our tax system, and paying down our national debt must be our top priority.

Chairman of the Senate Energy and Natural Resources Committee, Manchin has stated repeatedly that he wants any new package focusing on domestic energy independence. He is seeking an "all-of-the above" policy to combat climate change and help all forms of energy.

Manchin represents a state that heavily relies on energy production and coal. Russia's invasion has given Manchin and his position political power.

He said that Russia's output must be replaced, referring to the U.S. ban on its oil imports.

$555 billion of the $2 trillion House bill was approved for tax breaks and other incentives to encourage a switch towards cleaner energy. Manchin insisted that the bill drop the biggest effort of the original plan to encourage cleaner energy by offering penalties or financial rewards for producers.

Manchin also supports the inclusion of provisions to lower prescription drug prices. The bill that was introduced earlier would have achieved this by strengthening the government’s ability to negotiate prices for certain pharmaceuticals, which would help save the government money.

The White House did not reveal any details about what it might offer Manchin during talks.

Budget documents stated that it was hiding revenue proposals, such as prescription drug pricing, in a "deficit-neutral reserve fund." The documents added in a footnote that details were not provided "because discussions with Congress continue."

Biden's proposed minimum tax on the richest Americans is likely to face opposition. Manchin supports higher taxes for the wealthy and large corporations. However, he suggested Monday that Biden’s plan was complicated.

He said, "There are other ways people can pay their fair share."

The final package did not include a similar tax on billionaires that Ron Wyden (D-Ore.), Chairman of the Senate Finance Committee. The House bill passed last year had approximately $2 trillion in savings. This suggests that new proposals might not be necessary.

Senator Kyrsten Sinema (D-Ariz.) opposed her party’s attempts to raise taxes on individuals and corporations last fiscal year. She apparently has not changed her mind. Spokesperson Hannah Hurley stated Monday that Sinema is open to proposals that "target tax avoidance" and make sure corporations pay taxes. However, they should not increase costs for small businesses or everyday Americans.

Because all Republicans are likely to oppose any legislation they produce, Democrats will need all 50-50 Senate votes. Kamala Harris, Vice President, would be the tiebreaker vote.


 

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