the reality of the ukrainian war has crept into the US budget for 2023, worth 5.8 trillion dollars, with a 4% increase in military spending alongside numerous social programs. The increase in taxes on the highest incomes will partially cover the disbursement of the federal government, in a context of uncertainty due to high inflation and the international geopolitical turmoil, from the course of the struggle to the price and supply of oil.
President Joe Biden’s proposal for fiscal year 2023 can reduce the deficit “by more than 1.3 trillion this year,” according to the director of the White House Office of Management and Budget, Shalala Young, in a call with journalists. To reinvigorate its agenda and cut the deficit by a trillion over the next decade, the Administration will propose a tax on the wealthiest Americans. The pressure would be applied to households with incomes above 100 million dollars, through a new minimum tax of 20% on income, as well as on the value of liquid assets such as shares, which are currently taxed only when sold.
The tax increase, however, is not a novelty, but an idea raised from the first stages of the Democratic presidency to pay for its ambitious infrastructure plans. The new tax for millionaires will reduce the deficit by 361,000 million dollars (328,315 million euros), while the additional investments and reforms will mean a reduction of 1,413 billion dollars (1,285 billion euros).
The second budget of the Biden presidency – a statement of intent that will later be slimmed down by Congress, as happened last year, seeks to promote security in the country and in the world, in addition to making the necessary investments to “build a better America” (Build Back Better, the motto of his mandate), has advanced the White House. Specifically, it allocates 1.6 trillion dollars to internal investments, an increase of 7%, in items as disparate as additional financing for affordable housing, initiatives against gun violence and support for local industry to alleviate supply chain congestionone of the factors that have spurred inflation. Cool price pressure, at historical highs, is another of the objectives that the proposal flies over. The expansion of public health programs will, on the other hand, raise the deficit by 365,000 million dollars (331,953 million euros).
Biden will also request from Congress about 813,000 million in defense, 31,000 million more, or 4%, with respect to the current fiscal year, which ends on September 30. Military investments include the promotion of research and development of anti-missile warning systems, in the face of potential threats from countries such as North Korea and Iran, and in the midst of a red-hot geopolitical situation due to the war in Ukraine and the unknown of Russia’s final answer.
According to the document published this Monday by the White House, the federal government estimates that the deficit will be reduced by 1.3 percentage points in 2023, to represent 4.5% of gross domestic product (GDP). The accounts forecast that the budget deficit will be 1.15 trillion dollars (1.05 trillion euros) in 2023 as a whole, compared to 1.415 trillion (1.29 trillion euros) forecast this year. This level of deficit is the result of registering fiscal income at the federal level for a value of 4,638 billion dollars (4.22 billion euros) and 5,792 billion (5.27 billion euros) of expenses.
He knows in depth all the sides of the coin.
Despite the large reduction in the deficit in 2023 compared to 2022, forecasts for the next decade are stagnant at a chronic rate of around 4.5%. The same happens with the ratio of public debt to GDP, which will close 2023 at almost 102% and during the next decade will continue to be above the 100% threshold. Public debt exceeded 30 billion dollars in 2021 due to the extra cost of fighting the pandemic. The federal government allocated five billion, financed with loans, to alleviate the ravages of the health crisis, so, in an uncertain economic context – high inflation and energy crisis – reduction is a priority.
“Budgets are a statement of purpose, and the budget we are introducing today sends a clear message that we value fiscal responsibility, security at home and around the world, and the investments needed to continue our just growth and build a more equitable United States. United better”, underlined the president of the country, Joe Biden, in the presentation.
The mandatary get your home diary back after the diplomatic controversy over a comment presumably favorable to evict Vladimir Putin from power, this weekend. If from the first day of his mandate the economic recovery and the reconstruction of the country after the pandemic have been a priority —with million-dollar investments in infrastructure, social spending and clean energy—, the war in the Ukraine has forced him to correct his step.