Washington, D.C. – President Joe Biden is set to unveil his proposed budget to Congress on Monday, presenting his desired policies and gearing up for the upcoming re-election campaign. The budget proposal from Biden is crucial for his campaign platform as he eyes a second term in the November election. Typically, presidential budget proposals act as a framework for preferred policies and serve as a communication tool, with Congress usually making changes before enacting them.
The release of the budget comes shortly after Biden’s State of the Union address, which offered a preview of the provisions likely to be included, and is delayed by six weeks from the deadline set by the Congressional Budget Act. In his speech, Biden advocated for tax credits to assist specific homebuyers and sellers in addressing housing affordability issues. One of the proposals is a credit for middle-class, first-time homebuyers, providing them with a $5,000 annual tax credit for two years, equivalent to reducing interest rates on the median-priced home.
Moreover, Biden is aiming to incentivize homeowners to sell “starter homes” to first-time buyers by suggesting a one-year, $10,000 tax credit applicable to homes below the median home price in each area. The administration estimates that these credits could benefit 3.5 million first-time homebuyers and 3 million sellers, at a cost of approximately $65 billion over two years. Additionally, Biden is expected to propose the expansion of the low-income housing tax credit and a $20 billion grant fund for the construction of affordable multifamily rental units.
During the State of the Union address, Biden also called for the reinstatement of the expanded child tax credit, introduced during the COVID-19 pandemic, to pay eligible families up to $3,600 per child annually. He further pushed for expanding the earned income tax credit for low-wage workers and reiterated his support for a “billionaire tax”, impacting wealthy individuals with more than $100 million in wealth by imposing a minimum 25% tax.
Furthermore, Biden’s budget is likely to feature an increase in defense spending by 1% to $849.8 billion for fiscal year 2025, in response to budget constraints established under the Fiscal Responsibility Act. The proposed boost is slightly lower than initially projected by the administration and may affect orders for F-35 fighters and Virginia-class submarines. Biden also intends to allow Medicare to negotiate prices for at least 50 prescription drugs, up from the current limit of 20 drugs.