President Biden last Friday released a $6 trillion budget plan for our next fiscal year beginning October 1, 2021. The Administration has called it a “bold and responsible budget.” I conclude that it is “bold”, but the debt level that is projected will continue to grow every year. We can expect annual deficit spending to be running above $1.3 trillion throughout the next decade. Republicans and Democrats have been looking for a compromise. Even Biden has met with Republican leaders and may meet again this week.
Both parties would like to strike a deal on infrastructure spending which is a big part of the President’s budget. The plan includes $115 billion for roads and bridges, $174 billion for electric vehicles, $100 billion for rural broadband, and more. In addition to infrastructure there is the Presidents “family plan” including universal free pre-k, $109 billion for free community college, $225 billion for childcare and $225 billion for family medical leave. All of these new entitlement programs will just expand over the years. How are we going to pay for all these new expenses?
The President wants to fund all of this surge in spending with $3 trillion in tax increases. Increase corporate tax, capital gains tax, a tax increase on high-income earners, increase estate tax – that could destroy family businesses. It is my hope that our Congress will not accept this explosion in government spending and over-regulation. It is too risky, and we already have a booming economy now. Cut back on the entitlement program spending. When we want to fund our infrastructure, let the users pay. Raise the gas tax. How about a mileage tax? Charge those that use our waterway more money. User fees are a fair way to pay the piper.
Keep in mind the President’s budget is just his proposal. The question now is – what Congress will do. Republicans will not accept the Biden budget as proposed. Even some Democrats are insisting on certain changes. We shall see. This Monday was Memorial Day. I want to pay respect to all of our young men and women that have served our country. A special tribute to those that gave their lives for “the land of the free and the home of the brave.” God Bless America.
John Block served as Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill. John hosts a weekly radio show going back more than 20 years. The commentary and opinions shared are a summary of the discussion from the broadcast and not a reflection of the opinions of the firm at large. For more from John Block Reports from Washington visit www.johnblockreports.com.