Battle for Budget: Biden Targets Freedom Caucus as White House's $6.8 Tln Proposal Faces Scrutiny

The Biden administration is due to defend its $6.8 trillion budget proposal for the next fiscal year before the divided Congress this week. Not only Republicans but also some Democratic lawmakers suggest that the plan won't fly.

Budget hearings kick off on Wednesday with Treasury Secretary Yellen and Secretary of State Antony Blinken testifying in front of Senate subcommittees on their fiscal 2024 budget proposals. On Thursday, Yellen and two of Biden’s top economic advisers will testify at the House Appropriations subcommittee on Budget and Oversight.

Earlier this month, both Republicans and some Democrats subjected Biden's budget proposal to criticism. In particular, the GOP lashed out at the White House's tax increases totaling $5.5 trillion. The US president's budget calls to increase corporate income tax to 28% from the current 21%; there is also a minimum 25% tax on American households worth over $100 million in Biden's plan as well as a capital gains tax raise to 39.6% from 20%.

"The only way I know how to improve the president’s budget is with a shredder," said Senator John N. Kennedy (R-La.) while speaking to a US broadcaster on March 12.

"Start picking and choosing and trying to penalize, it's just not going to work. That's not going to fly. You cannot run this country if you're not energy secure. You can't be energy secure unless you're producing the oil, gas and coal that you need cleaner and better anywhere in the world," Senator Joe Manchin, D-W.Va., told the US press on March 9.

Given that the lower chamber of the US Congress is now controlled by the Republicans the Biden administration is facing a tough fight. House Republicans have already signaled that if Biden refuses to cut his $6.8 trillion budget they won't approve raising the debt ceiling.

Meanwhile, Axios learned that the White House is trying to gain a tactical advantage in the upcoming budget talks by subjecting a proposal by three dozen hardline Republicans in the House, referred to as the Freedom Caucus, to criticism.

On March 10, the House Freedom Caucus unveiled a plan aimed at saving $2.9 trillion to $3.7 trillion over a decade, including $275 billion to $775 billion over the next two and a half years.

The proposal envisaged repealing the announced student debt cancellation; rescinding unspent COVID funding; rescinding Internal Revenue Service (IRS) reinforcement from the Inflation Reduction Act (IRA); and repealing climate-related spending from the IRA. The plan also sets Fiscal Year (FY) 2024 appropriations to the FY2022 enacted level, and caps future discretionary spending growth at 1% per year for a decade.

As per the US media outlet, the Biden administration will show this week how part of the Freedom Caucus plan "would hurt Americans". The White House is planning to cast a shadow on the GOP's plan on a daily basis, insisting that it would endanger public safety; raise costs for families; and undermine US workers by sending manufacturing jobs overseas.

In particular, on Thursday the Biden administration is reportedly due to double down on claims that the GOP's plan includes cuts to Medicare, something that the Republicans have repeatedly denied.

The Dems and the US president have long been disseminating the idea that GOP House lawmakers are seeking to cut social security and Medicare during the debt ceiling talks. While delivering his State of the Union speech last month, Biden brought forward this idea, which was met with cries of "liar" from GOP lawmakers. It was earlier reported that House Speaker Kevin McCarthy particularly promised not to slash these programs.

On Friday, the Biden administration is expected to discuss how the Freedom Caucus plan could backfire on defense spending and the US ability to defend itself.

While the White House is targeting MAGA Republicans in the House in an apparent bid to sow discord within the GOP ranks, Speaker McCarthy signaled that the GOP budget may come later than the original April timeline, according to the US press. After the GOP proposal is released, Biden and McCarthy are due to hold serious budget negotiations, as per senior White House officials quoted by the media.

Still, the Freedom Caucus remains a thorn in the flesh of the Biden administration as a new debt ceiling battle nears. Earlier, Rep. Scott Perry (R-Pa.), the caucus chair, remarked: "America will not default on our debts unless President Biden chooses to do so."