What's in Biden's 2024 Budget Request

Scoops, analysis and insights driving Washington from the WSJ's D.C. bureau. The White House says that its proposed tax increases on wealthy people and large corporations would cut deficits by around $3 trillion over the next decade. The document is an opening step in the federal budgeting process and serves as a statement of the administration's priorities ahead of spending negotiations with Republicans, who control the House. Here is what is in the Biden administration's budget outline: The Pentagon budget request for $842 billion is a 3.2% increase on what Congress enacted last year, below the top end of analysts' expectations. With inflation in the sector running around 5%, the proposal represents a cut in real terms. The national security request includes an additional $7 billion for further military support for Ukraine and $23.6 billion for the Energy Department as part of the modernization of sea, land and air-based nuclear weapons. Further support for Ukraine is expected by analysts to come in the form of supplemental requests to Congress for additional funds to provide weapons directly and replenish U.S. and allies' stocks. The out-year guidance for fiscal 2025 and beyond calls for a further flattening of growth, highlighting the choices faced by the Pentagon and Congress. These include retiring older planes and ships to make way for modern platforms such as uncrewed aircraft and space assets aimed at countering the rapid expansion of capabilities by potential adversaries such as China. -- Doug Cameron The budget reprises Mr. Biden's past proposals to raise taxes on top earners and large corporations, most of which he has struggled to get through Congress, even when it was controlled by Democrats. As he has before, Mr. Biden proposed raising the top individual tax rate to 39.6% from 37%, raising the corporate tax rate to 28% from 21%, taxing top earners' capital gains at higher rates and increasing taxes on U.S. companies' foreign profits to 21% from 10.5%. He also called for extending tax cuts that are set to expire after 2025 -- but only for households making under $400,000 and without actually including the cost of those tax cuts in the budget. There are some new proposals, too. Mr. Biden is calling for expanding taxes on top earners that go toward Medicare. He would raise existing taxes on wages, self-employment income and investments to 5% from 3.8% above $400,000 in income and expand those taxes to cover active business income. The budget also seeks a 15% budget increase for the Internal Revenue Service that is separate from the $80 billion it got last year as part of the Inflation Reduction Act to expand enforcement and update the tax agency's technology. Mr. Biden is also seeking $14.3 billion in 2032 and $14.3 billion in 2033 on top of annual IRS budgets. That would be a continuation of the $80 billion expansion after that money runs out in 2031. -- Richard Rubin The budget would extend Medicare trust fund solvency, empower the program to negotiate prices for more drugs, and permanently expand subsidies available to people obtaining Affordable Care Act health plans. It requests $144 billion in discretionary budget authority for Health and Human Services, an 11.5% increase from the 2023 enacted level. The proposal would provide health coverage similar to Medicaid to people living in the 11 states that haven't expanded the program for the low income and disabled. HHS would be authorized to negotiate additional Medicaid drug rebates for states to pool purchasing power. And the proposal would invest $150 billion over 10 years to grow Medicaid's home and community services. On Medicare, Mr. Biden calls for expanding a tax on Americans earning more than $400,000 annually, aiming to sustain the solvency of the hospital fund by at least 25 years in part by raising Medicare taxes to 5% from 3.8%. New proposals on drug costs would also raise about $200 billion over a decade for a key Medicare trust fund, the White House says. The proposals would let Medicare negotiate prices for more drugs and accelerate the process by making drugs subject to negotiation sooner after they launch. The budget proposes $11 billion for a five-year effort the White House hopes will eliminate hepatitis C in the U.S., said Dr. Francis Collins, the former National Institutes of Health director who is spearheading the initiative. Drugs to treat the disease have been on the market since 2013, but normally retail for about $24,000 per patient. -- Stephanie Armour and Liz Essley Whyte The budget includes a pledge that Mr. Biden won't seek cuts to Social Security, and will seek to work with Congress to raise taxes on "high-income individuals" to support the program's long-term viability. Social Security taxes are currently capped, with the maximum amount of earnings subject to the payroll tax rising to $160,200 in 2023, from $147,000 in 2022. The earnings cap is tied to a national average wage index. The Social Security Administration would also receive an increase of $1.4 billion under the administration's budget, a 10% increase, which would be designated for improving customer service and adding staff to process disability claims. -- Gabriel T. Rubin As the administration prepares for an expected surge in migrants at the southern border, Mr. Biden's budget calls for roughly $25 billion for U.S. Customs and Border Protection and Immigration and Customs Enforcement -- about $800 million more than the 2023 enacted level. The additional funding would allow for the hiring of 350 Border Patrol agents and 460 processing assistants, $535 million for border-security technology and $40 million to tackle fentanyl trafficking. Administration officials have said they are expecting a significant increase in migrants crossing the border illegally once the pandemic-era rule known as Title 42, which allows authorities to rapidly expel asylum-seeking migrants, is lifted on May 11. The budget proposes a new $4.7 billion contingency fund to help the Department of Homeland Security deal with migrant surges at the border and more than $1.5 billion to tackle the backlog of over 1.8 million cases pending in the immigration courts. It also asks for $7.3 billion for the Office of Refugee Resettlement, whose tasks include taking care of unaccompanied minors who cross the border illegally. -- Tarini Parti The budget previews a coming fight over food stamps in the farm bill, the cornerstone of U.S. food and agriculture policy, which expires in October. Republicans have been raising concerns over time limits that were waived during the Covid-19 pandemic for how long certain low-income adults can be unemployed and still receive food aid. Under current law, able-bodied adults between the ages of 18 and 49 who meet the income requirements and who don't have dependents are allowed to receive food stamps for no more than three months within a three-year period, unless they are working or enrolled in a work program. While those time limits are set to snap back in place in May, with some flexibility still afforded states in areas with high unemployment, Mr. Biden's budget suggests that Democrats believe those time limits make it harder for low-income people to thrive. The White House budget says that research demonstrates that those constraints make it harder for people to afford food, rather than motivate them to find work. Republicans have said they are generally seeking to tighten eligibility requirements for food stamps to ensure people don't rely on the program for aid, rather than working. -- Kristina Peterson Building on the administration's legislative wins in the last Congress that devoted hundreds of billions of dollars to renewable energy and related works, the budget proposes $4.5 billion for clean energy workforce and infrastructure projects. Those include weatherizing and retrofitting low-income homes, improving local electric grids and expanding permitting for offshore wind projects. The budget also provides $16.5 billion for climate science and clean energy research and $23 billion for community climate resilience against floods, wildfires and storms. Billions more are devoted to cleaning up pollution, including from nuclear weapons production, and drought recovery and water conservation. -- Gabriel T. Rubin As the Biden administration faces Republican critics who blame Democrats for spikes in violent crime in some cities, the budget calls for $19.4 billion over 10 years for various crime-prevention strategies and $5 billion for community programs to fight violence. Mr. Biden, who has stressed that he doesn't want to strip police departments of funding, is also seeking money to help local police departments hire, with a goal of putting 100,000 additional officers on the streets. The budget also proposes $17.8 billion to fund the Justice Department's law-enforcement components, including nearly $2 billion for the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, whose main mission is combating gun violence. The Biden administration hopes the money will allow the agency, which is perennially strapped for resources, to expand so-called strike forces that have been focusing on thwarting gun trafficking, increase regulation of the firearms industry and implement the landmark gun legislation Mr. Biden signed last year. -- Sadie Gurman The president's budget proposal would increase funding to states for highways, bridge repairs and transit systems, in line with the bipartisan infrastructure law. That includes funding for new federal priorities, like constructing a nationwide network of charging stations for electric vehicles. The administration's proposal will include language that allows major mass transit systems to use the formula funds they receive for capital improvements to pay for operating expenses. The proposal acknowledges a dilemma that has affected transit agencies around the country since the Covid-19 pandemic began. Many are on the brink of fiscal crisis as they struggle to revive ridership that has been altered by changes in commuting patterns since the pandemic. The proposal would also increase funding for the National Highway Traffic Safety Administration, after roadway deaths reached 42,915 in 2021 -- the highest level in a decade, according to the Transportation Department. It would also make modest increases to existing railroad safety grant programs, boost funding for FAA modernization projects, and direct a combined $7.5 billion in grants to Amtrak -- raising its annual subsidy to $3.1 billion from $2.3 billion, and including another $4.4 billion in advance funding from the infrastructure law. -- Ted Mann The budget request for the National Aeronautics and Space Administration includes funding for a U.S.-led mission to safely bring down the International Space Station when it reaches the end of its expected life around 2030. The administration wants $180 million to start developing a "space tug" that would guide the space station to a lower orbit, pushing it into the atmosphere so that it would break up over the southern Pacific Ocean. The request is notable as NASA had previously considered the use of a Russian spacecraft to steer the space station to its fiery demise, though last year also asked U.S. industry for possible solutions. The broader NASA budget request for $27.2 billion is a 7% increase on the prior year's enacted funding. It includes $8.2 billion for the next Artemis lunar mission, which would be the first crewed effort with the new space launch system.