Biden unveils $5.8 trillion budget proposal with tax hikes, spending boosts

President Biden on Monday unveiled ambitious proposals to reduce the nation's deficit over the next decade with tax hikes targeting the wealthy, while outlining boosts for military and domestic programs as part of a $5.8 trillion plan to fund the government for fiscal 2023.

The White House says that the fiscal 2023 budget, which includes a tax hike on billionaires and other reforms, would reduce the deficit by over $1 trillion over the next 10 years.

"Budgets are statements of values, and the budget I am releasing today sends a clear message that we value fiscal responsibility, safety and security at home and around the world, and the investments needed to continue our equitable growth and build a better America," Biden said in a statement on the budget's release.

Notably, the sweeping request avoids specific funding requests for Biden's signature domestic policy proposal, Build Back Better, and instead includes a deficit neutral reserve fund as a placeholder for a future agreement between the administration and Congress.

"Because those discussions with Congress are ongoing, the budget does not include specific line items for investments associated with that future legislation," Office of Management and Budget Director Shalanda Young told reporters on a call Monday morning previewing the president's request.

The budget also does not include measures to offset the costs of any future Build Back Better legislation.

Young said the budget incorporates the reserve fund and lays out Biden's three principles for an agreement - that it slash costs for families, expand the economy's productive capacity and reduce the deficit.

Negotiations over Biden's domestic proposal collapsed last December when Sen. Joe Manchin (D-W.Va.) said he could not support the House-passed measure. The White House has been quiet about the status of negotiations with Congress since and it's unclear whether renewed efforts to get a scaled-back package passed will be successful.

Asked about the status of talks, Young on Monday declined to get ahead of negotiations on Capitol Hill.

"The deficit neutral reserve fund is meant to leave the space, the revenue specifically, to allow congressional negotiators the room to do what President Biden has asked," she said.

Presidential budgets are typically not passed by Congress, but they serve as a signal of the administration's priorities for the coming fiscal year.

Biden's budget puts a strong emphasis on bolstering international and domestic security, calling for $773 billion in defense spending, a slight increase over the fiscal 2022 level, according to a White House fact sheet. It includes almost $1 billion in additional assistance for Ukraine as the country battles the ongoing Russian invasion as well as $6.9 billion for the European Defense Initiative, NATO and countering Russian aggression.

The budget also includes robust funding for domestic law enforcement programs, including $30 billion for state and local law enforcement, crime prevention, and community violence intervention programs and $1.7 billion for a Justice Department firearm trafficking strike force. Biden has showcased his support for law enforcement as he seeks to counter Republican efforts to paint Democrats as soft on crime.

Additionally, the proposal funds other administration priorities, like bolstering public health infrastructure amid the COVID-19 pandemic and fighting climate change. It would give $81.7 billion to the Department of Health and Human Services over five years to prepare for future pandemics and provide $9.9 billion to the Centers for Disease Control and Prevention to public health infrastructure and strengthen the workforce.

Biden proposes $3.3 billion to support clean energy projects and $18 billion for climate resilience programs.

The focus on deficit reduction seemed to be an effort to appease moderates and address domestic economic concerns exacerbated by high inflation.

Biden is proposing a minimum 20 percent tax on American households worth more than $100 million that would target their "full income," including standard taxable income as well as unrealized income like gains from stocks, as part of the plan to reduce the deficit overtime.

The budget also includes a corporate tax rate hike from 21 percent to 28 percent, which could prove a tough sell in the Senate given previous resistance from key moderates like Manchin and Sen. Kyrsten Sinema (D-Ariz.).

The push comes as top Democrats have continued to press for tax reform targeting wealthy Americans and corporations, as government data has underscored growing income inequality in the nation in recent years, including during the pandemic.

But Democrats will have their work cut out for them in notching the necessary backing from Republicans who have voiced opposition to similar proposals, potentially forecasting problems ahead in the 50-50 split Senate, where the party would need all the support of its seats and 10 GOP lawmakers to pass such a measure.

The new request released early Monday marks Biden's second since assuming office in 2021, and comes weeks after Congress passed a $1.5 trillion spending omnibus package to fund the government for fiscal 2022.

The measure's passage earlier this month capped of months bruising, partisan fights over parity between increases in defense and nondefense spending levels, coronavirus relief funding and a number of thorny legacy riders in areas like abortion and marijuana.

This story was updated at 12:15 p.m.