Biden's budget to boost military, raise taxes on billionaires

US President Joe Biden is expected on Monday to ask Congress for record peacetime military spending while raising taxes for billionaires and projecting lower government deficits.

Biden’s budget proposal for the fiscal year starting Oct. 1 lays out his administration’s priorities but it is merely a wish list as lawmakers on Capitol Hill make the final decisions on budget matters.

The document offers fresh insight into Biden’s thinking as he attempts to halt Russia’s invasion of Ukraine and prepares for a Nov. 8 midterm election that could see his Democratic Party lose its control of Congress.

“The president’s budget will reflect three important values: fiscal responsibility, safety and security at home and abroad, and a commitment to building a better America,” a White House official said.

“The budget will help keep our communities safe by putting more cops on the beat for community policing, fighting gun crime, and investing in crime prevention and community violence interventions,” the official said.

Forced by disagreements within his own party to pump the brakes and instead continue negotiating on vast swathes of his domestic “Build Back Better” agenda, Biden is unlikely to include line items for all of his ideas on how to improve the country’s environment, healthcare, education, housing infrastructure and manufacturing competitiveness.

But he will use the opportunity to throw his explicit public support for the first time behind a new tax requiring billionaires to pay at least 20% of their income in taxes, including on the gains on investments that have not been sold.

The White House says the tax would apply to 0.01% of American households, those worth over $100 million, and that more than half of the new revenue would come from households worth more than $1 billion.

The measure would reduce the government deficit by $360 billion over the next decade, they said.

Biden has long pushed the message that the U.S. tax system rewards the wealthy too much and that the rich should pony up for more social services.

Two sources told Reuters in February that about $773 billion would be made available for the Department of Defense, which in combination with other spending would lead to a total national security budget above $800 billion.

Russia’s Feb. 24 invasion of Ukraine has intensified concerns about European security, while the Biden administration continues to invest in research and development on hypersonic missiles and other modern capabilities.

The United States is not directly engaged against Russia in the Ukraine war but is giving Kyiv weapons and extensive assistance. Working with European allies, it has also imposed heavy economic sanctions against Russia.

Axios news outlet on Monday reported that the plan includes more than $32 billion to tackle crime.

Biden also plans to propose new restrictions on stock buybacks, The New York Times reported separately.

The budget will also project a 2022 deficit of more than $1.3 trillion lower than last year, as the U.S. economy rebounds from the COVID-19 recession and Biden’s administration puts more focus on fiscal sustainability.

The U.S. federal government, on the hook for rising healthcare and social spending, especially for the elderly, has spent more money than it has taken for each of the last 20 years.