Biden seeks to cut his deficit by nearly $3 trillion

WASHINGTON (AP) — President Joe Biden’s next budget proposal aims to reduce the deficit by nearly $3 trillion over the next 10 years, the White House announced Wednesday.

That reduction target is considerably higher than the $2 trillion Biden pledged in his State of the Union address last month. It also contrasts sharply with House Republicans, who have demanded progress toward a balanced budget but have yet to introduce a bill.

The White House has consistently questioned Republicans’ commitment to achieving what it sees as a sustainable federal budget. Administration officials noted that the various tax plans and other policies previously approved by Republican lawmakers would add about $3 trillion to the national debt over 10 years.

“It seems important to us,” White House press secretary Karine Jean-Pierre said of the plan Biden intends to discuss Thursday in Philadelphia. “It’s something that shows the American people that we take this issue seriously.”

As part of the budget, the president said he wants to increase the Medicare payroll tax for people who earn more than $400,000 a year and tax the assets of billionaires and other extremely wealthy people.

The proposal would seek to close the “interest earned” loophole that allows millionaire hedge fund managers and others to pay their taxes at a lower rate, and prevents billionaires from setting aside large amounts of their assets in retirement accounts which They have tax advantages, according to an official. The plan also calls for saving $24 billion over 10 years by removing a tax subsidy on cryptocurrency transactions.

The official who gave the details spoke on condition of anonymity to reveal the plan ahead of its official announcement.

The package also includes:

—Expanding Medicare’s ability to negotiate pharmaceutical drug prices, which is expected to result in $160 billion in spending reductions over a decade.

— Radio spectrum auction rights, which could fetch $50,000 million.

—Take steps to reduce identity theft and unemployment insurance fraud.

—Tackling insurers who overcharge Medicaid, which is expected to save $20 billion in government reimbursements.

—End $31 billion in subsidies to oil and gas companies.

—Eliminate a $19 billion tax break for real estate investors.