WASHINGTON: Biden’s administration on Friday unveiled a $6 trillion budget proposal that would push the deficit to $1.7 trillion in 2022, while the average deficit over the next decade is projected to be around $1.3 trillion per year, a proposal released by the White House showed on Friday.
“The full set of proposals in the Budget reduce the annual deficit by the end of the 10-year budget window and every year thereafter. In the second decade, the Budget’s proposals reduce deficits by over $2 trillion,” the budget proposal said.
As regards the percentage of the US public debt as a percent of Gross Domestic Product (GDP), it is estimated that it will continue to grow by slightly less than one percent per year and will reach 117 percent in 2031, according to the calculations in the proposal.
It is also projected that the amount of US public debt as a percentage of GDP in 2021 will reach nearly 110 percent, a 10 percent increase as compared to the fiscal year 2020.
The proposal pointed out that over the long term the US financial system will be facing fiscal challenges which will be driven by demographic pressures on health and retirement programs as well as by inadequate revenue levels.
The Biden’s administration reckons that the two major investment plans, the American Jobs Plan and American Families Plan, will be paid for over 15 years while the savings from the tax system reform are expected to exceed the cost of major investments.
Earlier on Friday, US President Joe Biden proposed a $6 trillion budget for the 2022 fiscal year which will entail vast infrastructure and social programs, as well as corporate tax increase among others.