Biden’s Budget: Gargantuan Spending, Massive Tax Hikes, Yet Shortchanging Defense

Biden’s Budget Will Reportedly Call For The ‘Highest Sustained Levels Of Federal Spending Since World War II, While Running Deficits Above $1.3 Trillion Throughout The Next Decade’

“President Biden will propose a $6 trillion budget on Friday that would take the United States to its highest sustained levels of federal spending since World War II, while running deficits above $1.3 trillion throughout the next decade. Documents obtained by The New York Times show that Mr. Biden’s first budget request as president calls for the federal government to spend $6 trillion in the 2022 fiscal year, and for total spending to rise to $8.2 trillion by 2031.” (“Biden To Propose $6 Trillion Budget To Boost Middle Class And Infrastructure,” The New York Times, 5/27/2021)

“If Mr. Biden’s plans were enacted, the government would spend what amounts to nearly a quarter of the nation’s total economic output every year over the course of the next decade. It would collect tax revenues equal to just under one fifth of the total economy.” (“Biden To Propose $6 Trillion Budget To Boost Middle Class And Infrastructure,” The New York Times, 5/27/2021)

“In each year of Mr. Biden’s budget, the government would spend more as a share of the economy than all but two years since World War II: 2020 and 2021, which were marked by trillions of dollars in federal spending to help people and businesses endure the pandemic-induced recession.” (“Biden To Propose $6 Trillion Budget To Boost Middle Class And Infrastructure,” The New York Times, 5/27/2021)

Biden Has Proposed Trillions Of Dollars ‘In New Government Spending’ As The Country Is Awash In ‘Oceans Of Red Ink,’ ‘Adding To Already Record Levels Of Debt’

“Under Mr. Biden’s proposal, the federal budget deficit would hit $1.8 trillion in 2022… Total debt held by the public would more than exceed the annual value of economic output, rising to 117 percent of the size of the economy in 2031. By 2024, debt as a share of the economy would rise to its highest level in American history, eclipsing its World War II-era record.” (“Biden To Propose $6 Trillion Budget To Boost Middle Class And Infrastructure,” The New York Times, 5/27/2021)

• “Even if interest rates stay low, payments on the national debt would consume an increased share of the federal budget. Net interest payments would double, as a share of the economy, from 2022 to 2031.” (“Biden To Propose $6 Trillion Budget To Boost Middle Class And Infrastructure,” The New York Times, 5/27/2021)

“Biden has proposed more than $4 trillion in new government spending and trillions of dollars in tax hikes to pay for it. The budget deficit last year, meanwhile, was more than $3 trillion, adding to already record levels of debt.” (“White House Budget Plan Set To Leave Out Some Health Care Proposals From Campaign,” The Washington Post, 5/21/2021)

• “The U.S. budget deficit surged to a record of $1.9 trillion for the first seven months of this budget year, bloated by the billions of dollars being spent in coronavirus relief packages. The shortfall so far this year is 30.3% higher than the $1.48 trillion deficit run up over the same period a year ago, the Treasury Department said Wednesday in its monthly budget report. The oceans of red ink in both years are largely due to the impact of the coronavirus pandemic … The deficit for the budget year that ended Sept. 30 totaled a record $3.1 trillion and many private economists believe this year’s total will surpass that amount.” (“US Budget Deficit Hits Record $1.9 Trillion So Far This Year,” The Associated Press, 5/12/2021)

Biden Has Already Proposed $3.4 Trillion In Tax Hikes And Under His Budget, In Less Than A Decade, ‘The Government Would Be Collecting More Tax Revenue As A Share Of The Economy Than Almost Any Point In Modern Statistical History’

“[Penn Wharton Budget Model] projects that President Biden’s American Jobs Plan (AJP) would spend $2.7 trillion and raise $2.1 trillion dollars over the 10-year budget window 2022-2031.” (“President Biden’s $2.7 Trillion American Jobs Plan: Budgetary And Macroeconomic Effects,” Penn Wharton Budget Model, 4/07/2021)

“[Penn Wharton Budget Model] estimates that President Biden’s American Families Plan (AFP) would spend $2.3 trillion over the 10-year budget window (2022-2031), about $500 billion more than the White House’s estimate. … We estimate that AFP would raise $1.3 trillion in new tax revenue over the same period, including almost $480 billion in additional revenue from enhanced IRS tax collection enforcement.” (“President Biden’s American Families Plan: Budgetary And Macroeconomic Effects,” Penn Wharton Budget Model, 5/05/2021)

“By 2028, when Mr. Biden could be finishing a second term in office, [under his budget proposal] the government would be collecting more tax revenue as a share of the economy than almost any point in modern statistical history; the only other comparable period was the end of President Bill Clinton’s second term, when the economy was roaring and the budget was in surplus.” (“Biden To Propose $6 Trillion Budget To Boost Middle Class And Infrastructure,” The New York Times, 5/27/2021)

Biden’s Budget Even Assumes Retroactive Tax Increases

“President Biden’s budget assumes that his proposed capital-gains tax rate increase took effect in late April, meaning that it would already be too late for high-income investors to realize gains at the lower tax rates if Congress agrees, according to two people familiar with the proposal. Mr. Biden’s plan would raise the top tax rate on capital gains to 43.4% from 23.8% for households with income over $1 million. He would also change the tax rules for unrealized capital gains held until death. The effective date for the capital-gains tax rate increase would be tied to Mr. Biden’s announcement of the tax increase as part of the American Families Plan, which includes an expanded child tax credit and funding for preschool and community college. He detailed the plan April 28, and the budget will be released Friday.” (“Biden Budget Said to Assume Capital-Gains Tax Rate Increase Started in Late April,” The Wall Street Journal, 5/27/2021)

‘Yet … The Biden Administration’s Budget Proposal Seeks To Cut Defense Spending, After Inflation’

SENATE REPUBLICAN LEADER MITCH McCONNELL (R-KY): “All the ‘soft power’ in the world will only benefit us as long as we have the hard power to back it up. We must maintain our military edge against China and Russia. Yet for all this talk about competing with China, the Biden Administration’s budget proposal seeks to cut defense spending, after inflation. China’s long-term military investments are paying dividends that should alarm us. But Democrats want to pump the brakes on our own? Fewer resources for our own men and women in uniform? Less defense innovation? What sense does that make?” (Sen. McConnell, Remarks, 5/20/2021)

SEN. JIM INHOFE (R-OK), Senate Armed Services Committee Ranking Member: “I think any bill that really seeks to address the threat from China — the whole threat from China — must also address China’s very real military [threat] and its broader military-civil fusion that’s taking place right now. That’s why any response can’t separate out military and economic competition … [T]his has to be our top priority. Our security underwrites everything else we do as a nation…. China isn’t just investing in technology, manufacturing, and research — they are also investing in military. They are putting more money into modernizing their military than ever before. China is on a modernization sprint. They’ve been channeling money into building weapons we don’t even have yet – like hypersonics…. Meanwhile, we’re crawling forward because we aren’t giving our military the resources they need to stay competitive with China. We know what that looks like — it’s at least three to five percent in real growth…. So, the military advantage– that’s what we use to deter China from moving from economic aggression to military aggression. But we’ve already lost our edge in some areas. So to maintain our military advantage, it’s going to take investment. But President Biden’s not willing to make the investment we need. He is proposing to cut our defense budget — and that doesn’t even keep pace with inflation.” (Sen. Inhofe, Remarks, 5/19/2021)

‘President Biden’s Budget Proposal Includes Record Spending For Nearly Every Corner Of Government, But There’s One Big Exception: National Defense’

“President Joe Biden plans to request $715 billion for his first Pentagon budget … The $715 billion for the Defense Department is 1.6% higher than the $704 billion enacted for this year, but it would amount to a decrease of about 0.4% in real terms adjusted for inflation…. Republican senators who play prominent roles on defense, led by Minority Leader Mitch McConnell, condemned the planned Defense Department spending as an effective cut because it fails to keep up with inflation.” (“Biden’s $715 Billion Pentagon Plan Stirs Debate Over Size, Focus,” Bloomberg News, 4/08/2021)

“Biden’s 1st Budget Request Sidelines Defense Spending in Favor of Massive Domestic Investments” (Military.com, 4/09/2021)

• “President Joe Biden on [April 9^th] released the outlines of his first budget proposal to Congress, a $1.5 trillion blueprint that calls for a significant increase in nondefense spending … The $769 billion for nondefense spending that Biden is proposing would be a 16 percent increase over 2021 enacted levels and would account for about 3.3 percent of gross domestic product …” (“First Biden Budget Outline Calls For Major Boost In Nondefense Spending,” NBC News, 4/09/2021)

THE WALL STREET JOURNAL EDITORIAL BOARD: “President Biden’s budget proposal includes record spending for nearly every corner of government, but there’s one big exception: national defense. Even as global threats rise, notably from China, Mr. Biden is squeezing the Pentagon. Few in the media have noticed, but the White House is proposing a fiscal 2022 Pentagon budget of $715 billion. That’s a 1.6% increase from 2021’s $704 billion, but it’s a cut in the military’s spending power assuming likely inflation of more than 2%. Non-defense domestic discretionary spending will surge 16%, with the Education Department rising 41%, Health and Human Services 23% and the Environmental Protection Agency 21%.” (Editorial, “Biden’s Defense Budget Squeeze,” The Wall Street Journal, 4/18/2021)

• “The U.S. hasn’t spent less than 3% of its economic output on defense since before the September 11 attacks. But in the 1990s the U.S. military did not face peer competitors. Now the U.S. national defense strategy rightly sees an era of resurgent great power competition, but without the resources to meet the challenge. This mismatch increases the risk of miscalculation and war, as China seeks regional military dominance. Russia, Iran and lesser powers like North Korea also threaten allies and the U.S. homeland with missiles and cyber hacking.” (Editorial, “Biden’s Defense Budget Squeeze,” The Wall Street Journal, 4/18/2021)

American Adversaries Are Not Curbing Their Military Buildups Or Challenges To The West

Just This Week, The Chairman Of The Joint Chiefs Of Staff Warned Air Force Academy Graduates That Peace Between Great Powers ‘Is Under Stress, We Can See It Fraying At The Edge’

“The highest-ranking U.S. military officer warned against ‘fraying’ relations with China and Russia Wednesday, advising urgent action to improve global ties and prevent another ‘great power war.’ In a commencement address to Air Force Academy graduates, General Mark Milley, Chairman of the Joint Chiefs of Staff, said the U.S. is toeing a dangerous line in maintaining an appropriate level of competition with China and Russia. ‘We are now in the 76th year of the great power peace following WWII. And it is under stress, we can see it fraying at the edge,’ Milley told nearly 1,020 graduates in Colorado Springs. ‘With history as our guide, we would be wise to lift our gaze from the never-ending urgency of the present to set the conditions for a future that prevents great power war.’ ‘Right now we are in a great power competition with China and Russia,’ he continued.  ’And we need to keep it at competition and avoid great power conflict.’” (“Top Military Official Warns US Peace With China And Russia ‘Fraying,’” Fox News, 5/26/2021)

‘China’s Substantial Defense Spending Continues To Enable The Buildup Of Its Military Capabilities That Pose A Threat To The Interests Of The United States And Its Allies’

“China’s substantial defense spending continues to enable the buildup of its military capabilities that pose a threat to the interests of the United States and its allies. Sustained Chinese investment in defense has shifted the military balance in the region in its favor. Moreover, the erosion of conventional deterrence vis-à-vis China has increased the risk of conflict, including the potential for a more confident and emboldened China seeking to unilaterally change the status quo through the threat or the use of force.” (“Understanding China’s 2021 Defense Budget,” CSIS, 3/05/2021)

“China projected defense spending growth of 6.8% this year, the largest gain since 2019, amid tensions with the U.S. and key neighbors. Military expenditure is expected to climb to 1.35 trillion yuan ($208 billion) in the coming year, the Ministry of Finance said Friday. The figure, released at the start of the annual National People’s Congress meeting in Beijing, compares with a projected rise of 1.8% in budgeted fiscal spending.” (“China’s Defense Budget Climbs 6.8% as Economy Recovers,” Bloomberg, 3/04/2021)

• “Spending on the military as a share of overall national government spending will rise from 5.1 percent in 2020 to 5.4 percent in 2021—the highest in several years. Similarly, spending as a percent of the central government budget will rise from 36.2 percent to 38.7 percent, well above the average of 34.7 percent seen over the last five years. These figures confirm that China’s leaders continue to prioritize military modernization.” (“Understanding China’s 2021 Defense Budget,” CSIS, 3/05/2021)

“China’s defense spending has seen a nearly seven-fold increase over the past two decades, jumping from $39.6 billion in 1999 to $266.4 billion in 2019. China currently spends more on defense than Japan, South Korea, the Philippines, and Vietnam combined, and China’s military spending is second only to the United States.” (“What Does China Really Spend on its Military?,” China Power, CSIS, 3/08/2021)

Taiwanese Diplomat: ‘I Think Beijing Has Been Preparing For War Against Taiwan’

JOSEPH WU, Taiwanese Foreign Minister: “I think Beijing has been preparing for war against Taiwan, and that is what we have been seeing. They are preparing for it. If you look at the number of sorties [of Chinese jets], it’s around 2,900 times last year. So, the threat has been increasing. And when we examine in a closer way, the Chinese sometimes even cross the middle line of the Taiwan Strait…. What we are really concerned, if China is seeing some domestic difficulties, they might follow the classic wisdom of an authoritarian regime. They will find a scapegoat somewhere outside to divert the domestic attention. And we are very concerned that Taiwan may be that very convenient scapegoat for China’s own failure domestically.” (“Taiwan’s Foreign Minister Says China Is ‘Preparing For War.’ Here’s Taiwan’s Response Plan,” PBS Newshour, 5/25/2021)

“More than two dozen Chinese military jets, including bombers, ripped through the sky approaching Taiwan one Monday last month. The record incursion into Taiwan’s air defense identification zone was the latest move to heighten fears about what critics say has been Beijing’s increasingly brazen behavior in the South China Sea. … There is no denying that China has ratcheted up pressure on Taiwan, which split from the mainland after a civil war and has self-governed for more than 70 years. Beijing, which views it as an inseparable part of its sovereign territory, threatens to annex it, by force if necessary. In addition to flying nearly daily sorties over Taiwan, Beijing has conducted naval and air force training exercises around the island, sailed a carrier group through the Taiwan Strait and sent spy boats to collect intelligence around Taiwanese waters, according to a report presented to legislators in March.” (“Pressure And Pineapple Wars: Taiwan Fears Quieter Chinese Threat As U.S. Warns Of Invasion,” NBC News, 5/05/2021)

‘Russian Military Seeks To Outmuscle U.S. In Arctic’

“The goal is to project Russian power in a region where Washington is lagging…. ‘Russia is working to use the Arctic to regain its great power status and in doing so is becoming much more of a potential threat than it has been in decades,’ said Rebecca Pincus, an expert on the Arctic at the U.S. Naval War College in Newport, R.I…. Moscow has moved to consolidate control over a region it sees as vital to Russia’s economic future. For Moscow, it is the last geopolitical battleground where it holds the advantage against Washington and Beijing, both of which are trying to expand there. Under President Vladimir Putin, the military has become an indispensable tool of foreign policy. In the Arctic, which is fraught with territorial and legal disputes, the armed forces are working to push the boundaries of Russian control.” (“Russian Military Seeks To Outmuscle U.S. In Arctic,’ The Wall Street Journal, 5/25/2021)

• “For Russia, the control of growing sea traffic in Arctic waters is a national-security priority, and its new military-grade icebreakers, together with its fleet of Su-34 fighter-bombers, are meant to keep watch over a planned new global shipping route…. Late last year, standing aboard a nearly 500-foot long nuclear-powered icebreaker that Moscow has touted as the biggest in the world—and with the ability to cut through 10 feet of ice—Mr. Putin said Russia’s continued superiority in the Arctic depends on its ability to control the waterways of the far north. Mr. Putin has said the sea route lies in Russia’s waters and therefore the Kremlin should be able to regulate its traffic, if necessary by force.” (“Russian Military Seeks To Outmuscle U.S. In Arctic,’ The Wall Street Journal, 5/25/2021)

“Last year, on one of the northernmost air bases in the world, Russia’s military laid the final stretch of reinforced concrete on a runway to make it long enough to handle modern jet fighters and strategic bombers. The finishing touches to Nagurskoye Airbase, located on a largely ice-locked archipelago in the Arctic Ocean, are turning a once-abandoned staging point for Soviet aircraft into one of Russia’s most advanced military outposts. It is one in a string of new and refurbished bases meant to service the Kremlin’s ambitions in the resource-rich Arctic…. The military has renovated other airfields across Russia’s northern coast and deployed S-400 air defense systems and state-of-the-art radar to complicate potential advances from North Atlantic Treaty Organization countries. In the Kola Bay, the Northern Fleet’s new class of nuclear submarines is meant to ensure that Moscow maintains an advantage underwater. New military icebreakers, potentially armed with cruise missiles, will soon be traversing Arctic waters.” (“Russian Military Seeks To Outmuscle U.S. In Arctic,’ The Wall Street Journal, 5/25/2021)

Belarus Intercepted A Civilian Airliner With A Fighter Jet To Arrest A Dissident Journalist

“The strongman president of Belarus sent a fighter jet to intercept a European airliner traveling through the country’s airspace on Sunday and ordered the plane to land in the capital, Minsk, where a prominent opposition journalist aboard was then seized, provoking international outrage. The stunning gambit by Aleksandr G. Lukashenko, a brutal and erratic leader who has clung to power despite huge protests against his government last year, was condemned by European officials, who compared it to hijacking. It underscored that with the support of President Vladimir V. Putin of Russia, Mr. Lukashenko is prepared to go to extraordinary lengths to repress dissent.” (“Belarus Forces Down Plane to Seize Dissident; Europe Sees ‘State Hijacking,’” The New York Times, 5/23/2021)

Iraqi Security Forces Arrested The Leader Of An Iranian-Backed Militia After Attacks On An Air Base Housing U.S. Troops

“Iraqi security forces on Wednesday arrested militia commander Qasim Muslih, the military said, in a move security sources said was linked to attacks on a base that hosts U.S. forces. Muslih was arrested at dawn and is being questioned on anti-terrorism charges, a military statement said, without giving further details. Two security sources told Reuters the militia chief was arrested in Baghdad for involvement in several attacks including recent assaults on Ain al-Asad air base, where U.S. and other international forces are housed. Muslih is the Anbar province head of the Popular Mobilisation Forces (PMF), a grouping of mostly Shi’ite militias backed by Iran, which the United States regards as the biggest threat to security in the Middle East.” (“Iraq Militia Chief Arrested Over Attacks On Base Hosting U.S. Forces -Security Sources,” Reuters, 5/26/2021)