Biden’s Budget Proposal: More Military, Police funding, Tax Hikes on the Rich (maybe)

The White House unveiled a $5.8 trillion budget request for the 2023 fiscal year Monday, with the highlights including a tax hike on the richest Americans and a massive increase for military and law enforcement spending.

The bill is unlikely to pass as is, but it serves as a starting point for negotiations in Congress. By far the largest expense is military and defense spending. President Joe Biden is requesting $813 billion for the Pentagon, including $13.6 billion earmarked to fund Ukraine’s military efforts during Russia’s special operation in the region.

Within the discretionary budget, $813 billion will be spent on defense-related programs, compared to $769 billion for domestic spending. Programs like Social Security and Medicare are not considered part of the discretionary budget because they are self funded and cannot be altered through normal budget proposals.

Last year, Biden requested $753 billion for defense, only to have Congress increase that number to $782 billion. That is likely to be the case again as more so-called progressive members of Congress have signaled a willingness to support ever growing military budgets in response to the situation in Ukraine.

Republicans will likely target $875 billion as the final defense spending budget, according to an analyst quoted in Defense News.

Another larger point of contention in the budget is what could be the largest tax increase by dollar amount in the country’s history. If passed, the tax increase would drastically reduce the deficit, but Republican lawmakers are not likely to support the proposal.

As is, the budget includes a $2.5 trillion tax increase on large corporations over the next ten years and a 20% minimum tax on unrealized capital gains for households with a net worth of over $100 million.

However, conservative-leaning Democrats such as Arizona Senator Kyrsten Sinema have opposed similar tax increases in the past, and Democrats declined to include a billionaire tax in last year’s budget proposal.

Without any Republican support, passage would require every Democratic senator and the vast majority of Democratic representatives to vote for the plan. President Biden, House Majority Leader Nancy Pelosi and Senate Majority Leader Chuck Schumer have struggled to get their party to move in lockstep on progressive proposals.

Tax breaks for oil and energy companies would also expire under the proposal, leading to $43.6 billion in revenue over the next ten years, but that is also unlikely to survive congressional adjustments to the budget. The president and state lawmakers are currently advocating increased oil production domestically to lower costs for consumers after sanctions on Russia increased oil prices worldwide.

Another $33.2 billion is set aside for law enforcement, as Biden attempts to distance himself from progressives who want to “defund the police,” fulfilling his promise from his State of the Union speech on March 1.

“We should all agree: The answer is not to defund the police. The answer is to FUND the police with the resources and training they need to protect our communities[.]”

For context, $33.2 billion would be equivalent to the 11th largest military budget in the world.

The fiscal year 2023 will start in October of this year, giving Congress six months to negotiate the details.