By - Tim Rosado
The Biden Administration released its FY 2024 budget request to the Congress (March 9).
Most details of the budget will slowly trickle out of Federal agencies in the coming weeks.
That being the case, what follows below is a summary of key information from currently-available materials.
Budget Summary:
Spending––The budget proposes to increase Federal spending during FY 2024 by $511 billion (8.0%), with increases of $347 billion in mandatory spending (7.5%) and $164 billion (9.4%) in discretionary spending. On the discretionary portion of the budget, most increased spending is attributable to already-provided resources as the budget seeks just $77 billion in new authority (+4.8%) for FY 2024.
Revenue––Revenue increases by $234 billion in FY 2024 (4.9%), with nearly half of new revenue derived from planned or proposed tax law changes and tax administration measures.
Budget Deficit––The budget deficit will increase significantly next year under the budget request–– more than 17% to $1.8 trillion (from nearly $1.6 trillion)–– but the deficit is estimated to decline significantly as a percent of the US economy (-25%) over the next ten years if all budget proposals are implemented.
Federal Debt––Gross Federal debt will rise significantly over the ten years under the budget proposal (+45% to more than $50 trillion), but as a percent of the US economy the budget estimates that debt will remain at roughly the same level as FY 2024– i.e., 127% of gross domestic product (GDP).
Major Resource and Policy Proposals:
Taxes
Revise the current alternative minimum tax (AMT), which ensures that wealthier taxpayers pay a minimum tax rate irrespective of tax deductions and credits, in manner that ensures billionaires pay a minimum of a 25% income tax rate. This measure is estimated to raise $437 billion over the next 10 years.
Ensure multinational corporations pay minimum taxes by closing loopholes that enable the exclusion of foreign income earned overseas. This measure is estimated to raise $493 billion over 10 years.
Increase the corporate income tax rate from 21% to 28%. This measure is estimated to raise $1.3 trillion over 10 years.
Increase taxes on corporate stock buybacks (from 1% to 4%), which is when a company uses earnings to buy back stock (which can help with stock prices) instead of investing resources back into the company (e.g., higher worker pay) or distributing earnings to shareholders via dividends. This measure is estimated to raise $238 billion over 10 years.
Increase Medicare tax rates on persons with earned and unearned income above $400,000 from 3.8 percent to 5 percent while also preventing them from using income loopholes to shield income from Medicare taxes. These measures are estimated to raise $650 billion over 10 years.
Expand eligibility for the Child Care Tax Credit and make the credit fully refundable (a $429 billion cost over 10 years), and expand/improve the Earned Income Tax Credit (a $156 billion cost over 10 years).
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Healthcare & Food Security
Expand existing authority included in last year's Inflation Reduction Act (IRA) so that Medicare can negotiate prices for additional drugs, and permit negotiation sooner after drug launches.
Extend to commercial health insurance a current Medicare requirement that drug companies pay rebates to insurers when they increase prices faster than inflation.
Cap Medicare Part D cost-sharing on some generic drugs (e.g., those for hypertension and high cholesterol) to $2 per prescription per month.
Increase ARPA-H health research funding by $1 billion (+67%).
Expand the availability of mental healthcare insurance coverage, as well as require 3 mental health visits without insurance cost sharing, at an estimated cost of $47 billion over 10 years.
Extend expanded school meals programs, at an estimated cost of $14.6 billion over 10 years, to serve an estimated 9 million additional children.
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Environment & Energy
Add 2,400 staff for the EPA (+13%) for activities across the agency.
$757 million increase (+18%) to support programs in the EPA that work towards reducing greenhouse gas (GHG) emissions and building climate resilience.
$370 million increase (+22%) for NOAA weather and climate satellites.
$630 million increase (+63%) in National Science Foundation climate research and development.
$1.6 billion for a combined State and Treasury effort supporting US financial contributions to the international Green Climate Fund. Congress provided no funding this year.
$163 million increase (+300% increase) for EPA programs supporting lead testing and the reduction of lead in school drinking water.
$300 million increase (+240%) for US contributions to the international Clean Technology Fund.
$5 billion for towards restoration of national forests and wildfire risk mitigation consistent with the Biden Administration's 10-Year Wildfire Crisis Strategy.
$87 million increase (+28%) for NOAA's National Marine Sanctuaries and Marine Protected Areas to help expand conservation and support processes for additional sanctuaries.
A 20% funding increase for Department of Energy climate and clean energy research, development, demonstration, and deployment programs.
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National Defense
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Education, Child Care & Families
$2.2 billion increase (+12%) for financial support to high-poverty schools.
$392 million increase (+73%) in special education (Part C) grants, which support early intervention services for infants and families with disabilities.
$218 million increase (+140%) for the Full-Service Community Schools program, to help school districts expand wrap-around services to students and families.
$305 million increase (+34%) for english language instruction.
Gradually double the current college maximum Pell Grant (currently $7,395 for the 2023-2024 school year) at a cost of $96 billion over 10 years, with a $500 increase for FY 2024.
Provide two years of free community college at a cost of $90 billion over 10 years.
$2.1 billion increase (+10%) for Health and Human Services (HHS) early care and education programs, including a $1 billion increase for the Child Care and Development Block Grant program.
Create a new Federal/state-partnered free preschool program. The estimated cost is $200 billion over 10 years.
$1.1 billion increase (+ 9%) for the Head Start program.
Implement a national paid family and medical leave program to be administered by the Social Security Administration, at a cost of $325 billion over 10 years.
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Justice and Immigration
$213 million increase (+66%) for the Department of Justice (DOJ) state and local police hiring program––the COPS Hiring Program (CHP).
$300 million increase (+43%) for DOJ Violence Against Women programs.
$360 million increase (+90%) for juvenile justice programs that is intended to "bolster diversionary juvenile justice strategies."
$595 million increase (+66%) for immigration courts to address the current 1.8 million casework backlog.
Add 350 additional Border Patrol agents.
Establish a $4.7 billion contingency fund within the Department of Homeland Security (DHS) that would facilitate the flow of resources to DHS component agencies, when needed to respond effectively to periodic border surges.
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Infrastructure
$1 billion increase (+25%) for EPA water infrastructure projects.
$500 million increase (+17%) for air traffic management and control facilities and equipment.
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Housing
$2.4 billion (+8%) to sustain current housing voucher assistance, and expand support to an additional 50K households.
Create a new $9 billion housing voucher program for youth aging out of the foster care system.
$300 million (+20%) to construct and rehabilitate affordable rental housing and provide homeownership opportunities.
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International Diplomacy & Assistance
$9 billion (+15% increase when excluding emergency funding) for international programs (mostly the State Department and USAID).
Establish new Indo-Pacific-oriented programs such as an "Out-Compete China" initiative with $2 billion over five years to fund critical international infrastructure in countries that have sought "predatory" infrastructure investment from China; and, $2 billion to provide equity financing to development projects.
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