US pitches $6tn budget to ‘reimagine’ economy

30 May, 2021 12:00 AM printer

WASHINGTON: President Joe Biden on Friday proposed a $6 trillion budget to “reimagine” the US economy and stave off Chinese competition, though driving the United States into record debt—and with Congress first needing to give approval.

Announcing the proposed spending, Biden said a post-pandemic United States “cannot afford to simply return to the way things were before.”

“We must seize the moment to reimagine and rebuild a new American economy,” he said, reports AFP.

The president’s annual budget is more a wish list or a message on his priorities than anything else. Congress ultimately decides what money goes where, and the current Congress has only the narrowest Democratic majority.

Opposition Republicans are leery of any big new role for the central government.

Congressman Kevin McCarthy, leader of the Republican minority in the House of Representatives, called it “the most reckless and irresponsible budget proposal in my lifetime.”

Even some of Biden’s supporters warn that an economy already set to roar back from the Covid-19 shutdown risks getting swept up into an inflationary spiral.

But the massive plan signals the White House’s determination to put hard numbers on Biden’s campaign to rethink the relationship between government and business in what he says is an existential contest with China.

Under the Biden blueprint, the federal spigot would unleash $6.011 trillion in 2022, with increases gradually rising to $8.2 trillion in 2031. Debt as a percentage of annual GDP would be expected to quickly surpass the level seen at the end of World War II.

The Democrat made clear where the lion’s share of that expected $6 trillion price tag should go.

One huge chunk would be an infrastructure bill originally proposed at $2.3 trillion but since whittled down to $1.7 trillion in negotiations with Congress.

Another $1.8 trillion would go on increased state-funded education and social services—all, Biden argues, part of building a better 21st century workforce.

The overall aim, Biden said, is to grow the US middle class, while positioning “the United States to out-compete our rivals.”