Biden’s populist budget marks the overdue end of trickle-down economics

Presidential budget proposals are rarely passed into law. Rather, it is an expression of the priorities the president promises to fight for, often following the agenda laid out in the State of the Union address.

In his latest talk, state of the union address“The era of trickle-down economics is over,” President Biden said, heralding populist economic priorities.

Trickle-down refers to the idea that tax cuts for the wealthiest people “trickle down” to the rest of the population. Although this idea has long been popular in Washington, it is not true.A few years ago, the London School of Economics Studied It turns out that such “trickle-down” policies continued for 50 years in 18 developed countries, including the United States, and their only result was to increase the wealth of the already wealthy.

So how do we create prosperity for the rest of us? by tax extreme wealth The proceeds are then invested in social goods such as education, housing, food, and health care.President Biden was recently released. federal budget planning follows that blueprint, prioritizing the value of investing in American families and communities over tax cuts for the wealthy.

The budget for 2025 is approximately $5.3 trillion Revenues will increase over the next 10 years. This is his $388 billion increase compared to last year’s budget, all due to fairer tax policies targeting the wealthy and large corporations. Households with incomes below $400,000 are not expected to see a tax increase, and many households are expected to see a tax cut.

The proposed budget would reduce the national debt by nearly $3 trillion while investing $2.3 trillion in essential public services for working families. This is a great start to filling critical investment gaps for families and communities.

Take housing.National Low Income Housing Coalition report There is a shortage of more than 7 million affordable housing units for poor and low-income Americans.Biden is requesting $33 billion The program currently helps more than 2 million families purchase homes and expands access to homeownership for first-time homebuyers. His request will support existing vouchers and help add approximately 20,000 vouchers.

Although more needs to be done, this effort reduce homelessness In a tight housing market where rent prices are high and wages are often inadequate, providing access to safe and affordable housing is a step in the right direction.

The President’s budget request also addresses hunger and poverty. As food costs rise, so does program participation. women, infants, children Provide critical food assistance.The program showed very good results positive impact We support the health and well-being of people during pregnancy, postpartum and breastfeeding, as well as the health, cognitive development and nutrition of infants and young children. Biden’s budget proposal maintains rapid funding to meet growing needs and protects access to fresh fruits and vegetables with programs.

The Biden budget also says families should be able to afford child care. it is, new program This ensures safe, high-quality, affordable child care for children from birth to age 5, with most families paying less than $10 a day and free access for the lowest-income families. You will be able to do it.All children deserve universal rights for free a good start or for preschoolers, additional charges apply. Childcare/Development Block Grant Increase funding to expand the number of child care centers and increase salaries for Head Start, kindergarten, and elementary school teachers.

Importantly, the president’s budget would restore the child tax credit, which was expanded from the pandemic era. american rescue plan, which increased payments, expanded eligibility, and made monthly payments, which resulted in halving child poverty over the course of the program. Similarly, the Biden budget would restore the expanded American Rescue Plan Earned Income Tax Credit for low-income working adults without dependents.

These are just a few of the proposed policies that would have a major impact on the lives and communities of American families and children. The budget also protects Social Security, Medicare, and Medicaid, while lowering prescription drug prices and subsidizing health insurance premiums. Affordable Medical Care Actproviding health insurance subsidies, increasing the affordability of higher education, and more.

But in one important respect, this budget diverges significantly. That’s military spending.

As a national priority project show, nearly 70 percent of annual discretionary spending in Biden’s budget proposal would go to the militarized portion of the discretionary budget, leaving only 30 percent available for investment in most domestic programs other than Social Security, Medicare, and Medicaid. Not too much. As a result, if the administration believes these domestic priorities are worth investing in, Biden should increase investment in those programs rather than in the already vastly overfunded military. That means.

There is still much work to be done, but a budget that includes tax and investment priorities that reflect the needs of our people, rather than ever-increasing corporate profits and excessive wealth, is a good step in the right direction.

Karen Dolan is a Fellow at the Institute for Policy Studies.