What’s in Biden’s $6 Trillion Budget Plan

By WSJ Staff

The Biden administration released its budget for fiscal year 2022 calling for increases in spending on education, healthcare and renewable energy.

The president is proposing a $6 trillion budget for the year beginning on Oct. 1, including $1.52 trillion in discretionary spending for the military and domestic programs. Excluding emergency measures last year tied to the coronavirus pandemic, the request would boost base discretionary spending by 8.4%, or $118 billion, from the $1.4 trillion authorized in fiscal 2021.

The document is a statement of the administration’s priorities, with much haggling and input from Congress to come. The budget lays out how the president’s plans for spending over the next decade on infrastructure and social programs, such as paid family leave and universal preschool, will affect federal debt and deficits.

Here is what is in the Biden administration’s budget:

Taxes

Mr. Biden would sharply raise taxes on corporations and high-income households to pay for his plans. The corporate tax rate would rise to 28% from 21%, the top capital-gains rate would rise to 43.4% from 23.8% and unrealized capital gains would be taxed at death with a $1 million per-person exemption. The administration is also proposing an expansion of the Internal Revenue Service that would double its staffing over a decade and is projected to yield $700 billion in net savings from tougher tax enforcement.

The plan includes some tax cuts, such as an extension of the expanded child tax credit through 2025 and permanent extensions of expanded tax credits for health insurance, low-income workers and parents who pay for child care. It is silent on individual tax breaks that are scheduled to lapse at the end of 2025, including the larger standard deduction. And it is also silent on the $10,000 cap on the state and local tax deduction, a limit opposed by many Democrats.

The budget outlines the tax-increase proposals the administration has already described, and it excludes other items — such as changes to estate taxes, payroll taxes and a deduction for closely held businesses — that were part of the 2020 campaign but not part of the first wave of administration plans.

For the first time, the budget attaches official revenue estimates to some of the individual pieces. Limits on deductions for companies based in countries without minimum taxes would raise $390 billion over a decade, for example. The capital-gains changes would yield $322 billion.

Health

Mr. Biden’s budget requests almost $132 billion for the Department of Health and Human Services, a $25 billion increase from fiscal 2021 that reflects priorities such as more spending on pandemic preparedness and programs to reduce racial disparities in healthcare.

The increase in the discretionary budget includes spending to enhance the U.S. Strategic National Stockpile to prepare for future pandemics, biomedical research and funding on programs to reduce maternal mortality.

Mr. Biden is calling for empowering Medicare to negotiate for lower drug prices. In the budget request, he calls for adding dental, vision and hearing coverage to the health program for seniors and lowering the age of eligibility for Medicare from 65 to 60. He also supports a public option, which would be a government-run health insurance option that competes with private insurers, and a permanent expansion of subsidies to help reduce premiums for Affordable Care Act health plans.

The budget request would give $8.7 billion to the Centers for Disease Control and Prevention, the biggest bump in nearly 20 years, and provide more than $200 million largely aimed at reducing maternal mortality and morbidity.

The president wants $10.7 billion, an increase of $3.9 billion over 2021 enacted levels, for combating the opioid crisis. The budget also requests $1.6 billion, more than double the 2021 enacted level, to expand access to mental-health care, and a boost of $2.2 billion to the Indian Health Service.

Energy/Environment

The proposed budget calls for more than $36 billion in investments to combat climate change. It deepens his pitch for how the U.S. can turn global emissions-reductions efforts into an economic opportunity that creates jobs for researchers, inventors and blue-collar workers in charge of building the infrastructure needed for a cleaner energy sector.

The budget proposal links clean-energy spending to job growth, estimating $2 billion for welders, electricians and other workers on clean-energy projects. Another $580 million would create 250,000 jobs to clean up abandoned mines and drilling wells, the proposal said.

A chunk of $171 billion in federal research and development money would focus on technologies that could steer U.S. power needs away from fossil fuels and help the country’s energy, transportation and industrial sectors reach net zero carbon emissions by 2050. More than $10 billion — a nearly 30 percent increase over last year’s budget — would fund clean-energy innovation across nondefense agencies. Part of that would upgrade the Energy Department’s national labs to build out climate and clean-energy research programs.

The White House proposed to restore capacity at the U.S. Environmental Protection Agency, the primary agency for climate-change regulations that has strained under budget pressures. The agency is slated to get $11.2 billion, a 21% increase from last year.

The budget also boosts spending for traditional programs, including water infrastructure improvements and cleanup money for contaminated neighborhoods, in line with President Biden’s environmental justice push to aid historically disadvantaged communities.

Immigration

Mr. Biden set a goal of resettling up to 125,000 refugees in 2022, up from President Donald Trump’s cap of 15,000 for the current fiscal year. The $4.3 billion request for refugee services includes a goal of providing better services for unaccompanied minors and expediting the process of uniting them with relatives and removing them from U.S. custody.

The request includes money for border security modernization to screen for human, drug and weapons trafficking. It calls for no new funds for a border wall and requests the cancellation of any unused funds for the wall, but requests $861 million to increase security and economic support for Central American nations. It also calls for $891 million to hire more immigration judges and support staff to work through court backlogs.

Transportation

Many of the transit provisions in the budget are proposals from Mr. Biden’s American Jobs Plan, including funds for upgrading 20,000 miles of highways and streets and a focus on repairing the 10 most economically significant bridges, many of which require reconstruction. It also will repair the worst 10,000 smaller bridges, providing critical linkages to communities.

It also provides funds for replacing buses and railcars, electrifying the federal fleet of vehicles — including Postal Service vehicles — and would extend and enhance tax credits for electric vehicles. Mr. Biden’s budget also calls for a 35% increase in Amtrak funding and a new competitive grant program for local passenger rail.

Education

Mr. Biden’s budget spells out his plans to have the government make four additional years of schooling — including preschool and two years of community college — free to families, with taxpayers covering the cost. It would also substantially boost federal funding for primary and secondary schools in high-poverty areas — so-called Title 1 schools.

The budget would give grants to states to provide universal preschool to all 3- and 4-year-olds, as well as funding to ensure workers at the schools earn $15 an hour. Those two initiatives would cost $3.5 billion in the fiscal year through September 2022. Providing free community college would cost about $19 billion in the fiscal year. Those funds would go to states that agreed to put up matching funds — $1 for every $3 the federal government contributed — to cover tuition at community college.

The budget also calls for expanding a program that provides cash grants to students from poor and modest-income families to cover college tuition — including at four-year schools — and living expenses while in school. Under the proposal, eligible students would receive Pell grants of up to $8,370 a year — some would receive less, depending on their incomes. That would be $1,875 above the current maximum award. The grants, unlike student loans, don’t have to be repaid. The budget would also boost funding to colleges that serve high shares of Black, Hispanic, and Native American students.

Agriculture

The Agriculture Department would see a 16% funding increase, with significant additional funding for priorities like rural broadband, improving rural water infrastructure and improving forest management to prevent forest fires.

The budget would also allocate more money toward developing agricultural technologies to help farmers boost their output while also pursuing conservation initiatives and sequestering carbon on their land. The budget includes $300 million in new conservation funds, including support for voluntary private lands conservation.

A major part of the Agriculture Department’s budget goes to nutrition programs: Food stamps would receive $6.7 billion under Mr. Biden’s request, a $1 billion increase from this year’s enacted level.

Cybersecurity

The budget requests a boost in cybersecurity funding the administration says is necessary to counter challenges posed by Russia and China.

The Cybersecurity and Infrastructure Security Agency would get an additional $110 million, bringing its funding to $2.1 billion. The bill provides $20 million for a new Cyber Response and Recovery fund.

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May 28, 2021 13:56 ET (17:56 GMT)