WASHINGTON—President Biden plans Thursday to outline his annual budget blueprint, laying out recommended funding levels for programs across the federal government and signaling his priorities for fiscal 2024.
The budget plan will face criticism from GOP lawmakers and is unlikely to be enacted, but it nonetheless will serve as a starting point for spending negotiations between Republicans and Democrats. The president is set to deliver remarks on his plan in a speech Thursday in Philadelphia.
Here’s what you need to know about the budget.
Why do presidents propose budgets?
Federal law requires that presidents submit to Congress an annual budget proposal no later than the first Monday in February. Mr. Biden, like presidents of both parties before him, is submitting his proposal late.
While Congress has the final say on spending and taxation, the president’s budget request lays out the executive branch’s priorities, offering an agency-by-agency breakdown of how much money the president wants to allocate to carry out the administration’s policy vision.
What is the president’s budget?
Budget-request documents often run well over 1,000 pages and detail how a president would spend trillions of dollars over the fiscal year, which runs from Oct. 1 to Sept. 30. Mr. Biden proposed a $5.8 trillion budget for fiscal 2023.
The document is the product of months of work behind the scenes, with senior officials at each agency drafting proposals that are sent to the White House Office of Management and Budget for review. OMB assembles the proposals, and the president formally submits the document to Congress.
President Biden’s proposed budget will shed light on the administration’s approach to federal deficits and debt.
Photo:
Patrick Semansky/Associated Press
Most of the money the federal government spends in a year is mandatory spending that is already required by federal law and that Congress doesn’t approve annually. That includes funding for programs such as Social Security. Another portion is made up of interest payments on the federal debt, which have gotten more costly as the Federal Reserve lifts its benchmark interest rate.
About one-third of the budget is discretionary spending, which Congress controls through the appropriations process.
Discretionary spending is broken up into two broad categories: Military spending, which typically makes up close to half of total discretionary spending; and nonmilitary spending, which covers everything from infrastructure and law enforcement to education and scientific research.
The budget also offers a look at how the president’s proposals on spending and revenue would affect federal deficits and debt. It includes the administration’s estimates about how those policies would affect economic growth, inflation and interest rates.
What priorities are likely to be reflected in Biden’s budget?
White House officials have said the president’s budget will focus on four themes: expanding the economy, lowering costs, reducing the deficit and protecting Social Security and Medicare.
Mr. Biden, in his State of the Union address in February, said his fiscal year 2024 budget would map out a plan to lower the deficit by $2 trillion over 10 years and extend the solvency of a Medicare trust fund by at least two decades. He said he would achieve the goals without cutting Social Security or Medicare benefits or raising taxes on Americans making less than $400,000 a year.
SHARE YOUR THOUGHTS
What questions do you have about the budget? Join the conversation below.
The budget proposal will lay out a plan to make Medicare’s hospital-insurance fund solvent for at least two decades in part by raising Medicare tax rates for people earning more than $400,000 a year.
Mr. Biden also is expected to revive many of his policy priorities that failed to pass Congress when Democrats controlled both the House and Senate in 2021 and 2022. Those include a national paid-leave program, child-care subsidies, an expansion of the child tax credit and a universal prekindergarten program.
Some Democrats think Mr. Biden might scale back some of his proposed social programs in an effort to hold down the price tag.
Will the White House budget proposal go anywhere in the GOP-controlled House?
It is no secret that many of Mr. Biden’s proposals will be dead on arrival in the divided Congress. House Republicans are likely to balk if Mr. Biden again proposes plans to spend billions of dollars to address climate change and boost social programs.
Still, the release of the Biden budget will kick off monthslong negotiations on Capitol Hill, with House and Senate committees wrangling over funding levels.
The White House budget will effectively represent Democrats’ opening offer to Republicans over how to fund the government next year. Republicans will likely try to bring down the nonmilitary spending total from what Mr. Biden proposes, while they are expected to argue for boosting the military number.
The Biden budget proposal is expected to revive some policy priorities, including a universal prekindergarten program.
Photo:
andrew caballero-reynolds/Agence France-Presse/Getty Images
Mr. Biden also could use the budget plan as a starting point for a 2024 re-election bid if, as expected, he decides to seek another term in the White House. The document could highlight programs that he might pitch to voters on the campaign trail.
What does the budget mean for the debt-ceiling fight?
The release of Mr. Biden’s budget request precedes an expected fight over raising the debt ceiling. House Republicans are calling for deep spending cuts as a condition for raising the federal borrowing limit. Mr. Biden says he won’t negotiate on the subject, calling for a “clean” debt ceiling increase without conditions.
Failing to raise the limit could lead to a default on debt payments, which would wreak havoc on global financial markets.
Reaching an agreement on government spending, on the other hand, could smooth the way for both parties to agree to raise the debt limit. The Congressional Budget Office estimates the U.S. could become unable to pay all of its bills on time sometime between July and September, giving lawmakers a few months to reach a deal.
Will Republicans release a budget?
Republicans are planning to release their own budget proposals in the coming weeks. Unlike Mr. Biden, Republicans are expected to propose deep reductions in spending.
House Speaker Kevin McCarthy (R., Calif.) has said Republicans will seek to eliminate the annual budget deficit. He hasn’t described any specific spending cuts Republicans will support, however.
GOP leaders have said they won’t seek cuts to Medicare or Social Security. Some Republican lawmakers have previously proposed raising the Medicare eligibility age, creating a work requirement for some Medicaid recipients or making other changes to the programs.
If lawmakers take raising taxes and cutting Medicare, Social Security, defense and veterans programs off the table, Congress would need to cut 85% of spending in all other categories to balance the budget in 10 years, according to the Committee for a Responsible Federal Budget, a nonpartisan group that advocates for reducing federal deficits.
When could a budget become law?
Congress has until Oct. 1 to reach an agreement on federal spending and avoid a partial government shutdown. But lawmakers often pass short-term extensions of government funding to give themselves additional time to negotiate an annual deal.
Before then, Congress can first pass a budget resolution, which sets a high-level framework for those negotiations. Federal law sets an April 15 target date for adopting a budget resolution, but lawmakers regularly miss that deadline.
Under the standard budgetary process, lawmakers consider separate bills outlining funding for different arms of the government, from the Pentagon to agriculture. But Congress often dispatches with that process, instead voting on an omnibus spending measure that combines appropriations across government agencies.
In December, Congress approved a roughly $1.65 trillion spending bill for discretionary programs such as the military for fiscal year 2023.
—Annie Linskey contributed to this article.
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
WASHINGTON—President Biden plans Thursday to outline his annual budget blueprint, laying out recommended funding levels for programs across the federal government and signaling his priorities for fiscal 2024.
The budget plan will face criticism from GOP lawmakers and is unlikely to be enacted, but it nonetheless will serve as a starting point for spending negotiations between Republicans and Democrats. The president is set to deliver remarks on his plan in a speech Thursday in Philadelphia.
Here’s what you need to know about the budget.
Why do presidents propose budgets?
Federal law requires that presidents submit to Congress an annual budget proposal no later than the first Monday in February. Mr. Biden, like presidents of both parties before him, is submitting his proposal late.
While Congress has the final say on spending and taxation, the president’s budget request lays out the executive branch’s priorities, offering an agency-by-agency breakdown of how much money the president wants to allocate to carry out the administration’s policy vision.
What is the president’s budget?
Budget-request documents often run well over 1,000 pages and detail how a president would spend trillions of dollars over the fiscal year, which runs from Oct. 1 to Sept. 30. Mr. Biden proposed a $5.8 trillion budget for fiscal 2023.
The document is the product of months of work behind the scenes, with senior officials at each agency drafting proposals that are sent to the White House Office of Management and Budget for review. OMB assembles the proposals, and the president formally submits the document to Congress.
President Biden’s proposed budget will shed light on the administration’s approach to federal deficits and debt.
Photo:
Patrick Semansky/Associated Press
Most of the money the federal government spends in a year is mandatory spending that is already required by federal law and that Congress doesn’t approve annually. That includes funding for programs such as Social Security. Another portion is made up of interest payments on the federal debt, which have gotten more costly as the Federal Reserve lifts its benchmark interest rate.
About one-third of the budget is discretionary spending, which Congress controls through the appropriations process.
Discretionary spending is broken up into two broad categories: Military spending, which typically makes up close to half of total discretionary spending; and nonmilitary spending, which covers everything from infrastructure and law enforcement to education and scientific research.
The budget also offers a look at how the president’s proposals on spending and revenue would affect federal deficits and debt. It includes the administration’s estimates about how those policies would affect economic growth, inflation and interest rates.
What priorities are likely to be reflected in Biden’s budget?
White House officials have said the president’s budget will focus on four themes: expanding the economy, lowering costs, reducing the deficit and protecting Social Security and Medicare.
Mr. Biden, in his State of the Union address in February, said his fiscal year 2024 budget would map out a plan to lower the deficit by $2 trillion over 10 years and extend the solvency of a Medicare trust fund by at least two decades. He said he would achieve the goals without cutting Social Security or Medicare benefits or raising taxes on Americans making less than $400,000 a year.
SHARE YOUR THOUGHTS
What questions do you have about the budget? Join the conversation below.
The budget proposal will lay out a plan to make Medicare’s hospital-insurance fund solvent for at least two decades in part by raising Medicare tax rates for people earning more than $400,000 a year.
Mr. Biden also is expected to revive many of his policy priorities that failed to pass Congress when Democrats controlled both the House and Senate in 2021 and 2022. Those include a national paid-leave program, child-care subsidies, an expansion of the child tax credit and a universal prekindergarten program.
Some Democrats think Mr. Biden might scale back some of his proposed social programs in an effort to hold down the price tag.
Will the White House budget proposal go anywhere in the GOP-controlled House?
It is no secret that many of Mr. Biden’s proposals will be dead on arrival in the divided Congress. House Republicans are likely to balk if Mr. Biden again proposes plans to spend billions of dollars to address climate change and boost social programs.
Still, the release of the Biden budget will kick off monthslong negotiations on Capitol Hill, with House and Senate committees wrangling over funding levels.
The White House budget will effectively represent Democrats’ opening offer to Republicans over how to fund the government next year. Republicans will likely try to bring down the nonmilitary spending total from what Mr. Biden proposes, while they are expected to argue for boosting the military number.
The Biden budget proposal is expected to revive some policy priorities, including a universal prekindergarten program.
Photo:
andrew caballero-reynolds/Agence France-Presse/Getty Images
Mr. Biden also could use the budget plan as a starting point for a 2024 re-election bid if, as expected, he decides to seek another term in the White House. The document could highlight programs that he might pitch to voters on the campaign trail.
What does the budget mean for the debt-ceiling fight?
The release of Mr. Biden’s budget request precedes an expected fight over raising the debt ceiling. House Republicans are calling for deep spending cuts as a condition for raising the federal borrowing limit. Mr. Biden says he won’t negotiate on the subject, calling for a “clean” debt ceiling increase without conditions.
Failing to raise the limit could lead to a default on debt payments, which would wreak havoc on global financial markets.
Reaching an agreement on government spending, on the other hand, could smooth the way for both parties to agree to raise the debt limit. The Congressional Budget Office estimates the U.S. could become unable to pay all of its bills on time sometime between July and September, giving lawmakers a few months to reach a deal.
Will Republicans release a budget?
Republicans are planning to release their own budget proposals in the coming weeks. Unlike Mr. Biden, Republicans are expected to propose deep reductions in spending.
House Speaker Kevin McCarthy (R., Calif.) has said Republicans will seek to eliminate the annual budget deficit. He hasn’t described any specific spending cuts Republicans will support, however.
GOP leaders have said they won’t seek cuts to Medicare or Social Security. Some Republican lawmakers have previously proposed raising the Medicare eligibility age, creating a work requirement for some Medicaid recipients or making other changes to the programs.
If lawmakers take raising taxes and cutting Medicare, Social Security, defense and veterans programs off the table, Congress would need to cut 85% of spending in all other categories to balance the budget in 10 years, according to the Committee for a Responsible Federal Budget, a nonpartisan group that advocates for reducing federal deficits.
When could a budget become law?
Congress has until Oct. 1 to reach an agreement on federal spending and avoid a partial government shutdown. But lawmakers often pass short-term extensions of government funding to give themselves additional time to negotiate an annual deal.
Before then, Congress can first pass a budget resolution, which sets a high-level framework for those negotiations. Federal law sets an April 15 target date for adopting a budget resolution, but lawmakers regularly miss that deadline.
Under the standard budgetary process, lawmakers consider separate bills outlining funding for different arms of the government, from the Pentagon to agriculture. But Congress often dispatches with that process, instead voting on an omnibus spending measure that combines appropriations across government agencies.
In December, Congress approved a roughly $1.65 trillion spending bill for discretionary programs such as the military for fiscal year 2023.
—Annie Linskey contributed to this article.
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8