Biden presents budget with largest-ever defense spending

Washington, Mar 28 (EFE).- The Joe Biden administration on Monday presented a budget bill for $5.79 trillion with the largest-ever allocation for defense spending, coinciding with Russia’s invasion of Ukraine, and which is to be financed by raising taxes on corporations and on the wealthiest Americans.

In the 277-page bill, the White House is asking Congress to approve for Fiscal Year 2023 – which begins on Oct. 1, 2022 – spending of $5.79 trillion, down slightly from the $5.85 trillion budget it requested for last year.

In all, the US government wants to allocate $813 billion to defense, an increase of 4 percent over Fiscal 2022, of which $31 billion would be new spending.

To support Ukraine in its fight against Russia and to reinforce NATO’s eastern flank, the Biden administration wants to allocate $6.9 billion with the aim of “counteracting” the Kremlin’s invasion of its neighbor, an independent nation that used to be part of the now-defunct Soviet Union.

In a statement Biden asked for the funds to “forcefully respond to (Russian President Vladimir) Putin’s aggression against Ukraine” with $1 billion in additional US funding for Kyiv’s security, economic and humanitarian needs.

In the domestic arena, the budget bill includes $17.4 billion for security forces around the US to fight crime, of which $1.7 billion will be to combat weapons trafficking.

“The budget I am releasing today sends a clear message that we value fiscal responsibility, safety and security at home and around the world, and the investments needed to continue our equitable growth and build a better America,” the president said in a statement.

The government wants to finance this budget as it seeks to reduce the federal deficit by $1.3 trillion this year, thus cutting in half the deficit from the last year of the 2017-2021 Donald Trump administration, with $1 trillion in additional deficit reductions scheduled over the next decade.

“My budget will continue that progress, further reducing the deficit by continuing to support the economic growth that has increased revenues and ensuring that billionaires and large corporations pay their fair share,” Biden said.

This will be made possible, in part, by increasing the corporate tax from 21 percent to 28 percent, something that the moderate wing of the Democratic Party in Congress opposes.

In addition, the administration wants to impose a minimum 20 percent income tax on anyone with assets of more than $100 million.

Regarding the taxes, the director of the White House’s Office of Management and Budget, Shalala Young, said in a telephone call with reporters that the bill guarantees that nobody earning less than $400,000 per year will pay a penny more in new taxes.

Young emphasized that the administration had prepared the budget bill on the basis of economic figures showing that the US has created more than 6.5 million jobs in a single year, the economy has grown by 5.7 percent and employment has declined to 3.8 percent.

Nevertheless, the bill is separate from the priorities set forth by Biden in the 2022 budget, the first of his mandate, where he established social policies and climate change as priorities, moves that have not prospered in Congress.

As the US continues to recover from the coronavirus pandemic, the government is asking Congress for $9 billion to strengthen the ability of healthcare systems to deal with Covid-19 and $81.7 billion over the next five years to provide health security against future pandemics.

The White House projects that in 2023 the country’s GDP will grow by 5 percent, compared with its forecast of 7.3 percent growth in 2022, adding that it expects inflation to be 4.7 percent next year, one percent more than the current rate.

In addition, the administration predicts that unemployment will be 3.9 percent in 2023, compared to its projection of 5.4 percent for 2022.

At the beginning of March, the Federal Reserve raised interest rates for the first time since 2018 in a swerve toward a contractive monetary policy that allows it to fight higher inflation, a situation that has been aggravated by Russia’s Feb. 24 invasion of Ukraine.

The Fed raised the official interest rate by 0.25 percent to between 0.25 and 0.5 percent, after two years during which the rate had hovered near zero, in an effort to ameliorate the economic effects of the Covid-19 pandemic.

EFE ssa/er/lll/bp

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