by Mitch Kokai
Senior Political Analyst, John Locke Foundation
President Joe Biden’s recent budget for fiscal year 2024 comes with a glaring contradiction hiding in plain sight. To wit, the policies pursued by “Middle Class Joe” — a sobriquet that The Washington Post notes Biden bestowed upon himself — will only work to accelerate the demise of the working classes. After suffering the ill effects of two decades of flawed fiscal and monetary policy, the middle class badly deserves a change of course.
On the surface, the budget seems like a boon to the middle class, proposing ever-larger government largesse. The fiscal plan includes “free” child care, universal preschool, a permanent extension of enhanced Obamacare subsidies, money for home-based care in Medicaid, “free” community college, and paid medical and family leave — all funded by higher taxes on “the rich” and corporations. Not long after the party attacked Republicans for fighting two wars on three tax cuts, Democrats apparently believe they can reduce the deficit by creating or expanding half a dozen entitlements.
Washington insiders know Biden’s budget is a fantasy. The president claims to support a permanent increase in the child tax credit — the budget only includes a two-year extension — and measures that preserve Social Security’s solvency without reducing benefits. Yet the administration dared not offer specific measures funding either proposal, knowing full well it lacked enough “rich” people to dun for cash without needing to raise taxes on other Americans.
But even under the administration’s rosy assumptions, the middle class will suffer. Consider that the budget Biden proposed, even after its trillions in higher taxes on “the rich,” will yield deficits averaging 5.2 percent of GDP over the coming decade. In the years since World War II, the federal government has never run sustained deficits that high, doing so only temporarily during the recession of 1982-83, the Great Recession, and the Covid-19 pandemic.