THE LONG GAME: White House unveils FY25 budget; Shutdown averted—for now
The Biden Administration released its FY25 budget on Monday, with an emphasis on tax breaks for middle-class families contrasted with higher taxes on corporations and wealthy people. Under Biden’s plan, which is unlikely to become law, parents would receive an increased child tax credit and homebuyers would get a $9,600 tax credit. Meanwhile, a minimum tax of 25% would be imposed on billionaires and corporate tax rates would rise from 21% to 28%. Medicare would have the ability to negotiate prices on 500 different drugs generating savings of $200 billion over ten years. Altogether, the proposal would cut the deficit by $3 trillion over a decade. Republicans on the House Budget Committee passed their own budget resolution last week. The GOP proposal would cut the deficit by $14 trillion over a decade. However, more than half of that amount would come from an $8.7 trillion reduction in Medicare and Medicaid spending— cuts that Biden has said he would prevent. OMB director Shalanda Young will be on Capitol Hill this week to testify on the budget proposal.
President Biden signed into law a $460 billion spending package on Saturday that funds the Departments of Agriculture, Energy, Justice, Transportation, Housing and Urban Development, and Veterans Affairs. It would fund those parts of the government until the end of the current fiscal year, or September 30. The package calls for spending levels first agreed upon as part of the debt ceiling deal negotiated last year by Biden and then-Speaker Kevin McCarthy. The legislation passed the Senate on Friday by a vote of 75 to 22, after the House had passed it by a vote of 339 to 85. Congress must still pass a package that funds the Pentagon, the Department of Homeland Security, and other agencies by March 22.
Washington Watch is published weekly when Congress is in session. Published monthly during extended recess or adjournment.
Spotlight on Puerto Rico
Photo Credit: Noah Berger/AFP via Getty Images
Biden budget includes provisions impacting Puerto Rico
In the administration’s FY25 budget proposal unveiled on Monday, President Biden urged lawmakers to grant Puerto Rico and other territories full access to Medicaid funds and to “move towards parity” in the Supplemental Nutrition Assistance (SNAP) and Supplemental Security Income (SSI) programs, El Nuevo Dia reports. Biden’s prior budget proposal had been silent on the issue of parity, although such a commitment was included in his previous two budgets. This comes as the potential transition to SNAP has been the subject of increased discussion in Washington. In recent weeks, U.S. Secretary of Agriculture Tom Vilsack expressed doubts about whether Puerto Rico could transition from the Nutrition Assistance Program (NAP) to SNAP. Senate Democrats have called for legislation to help promote the transition over five years. Under NAP, Puerto Rico is set to receive around $2.9 billion during the fiscal year. By comparison, if Puerto Rico had access to SNAP benefits, the Island would receive about $4.5 billion annually, if work requirements were imposed on people between ages 18 to 54 years old. In his budget, Biden also called for improvements in the U.S. Census Bureau's collection and analysis of data on the Puerto Rican population and economy.
Vice President announces plans to travel to Puerto Rico
Vice President Kamala Harris will visit Puerto Rico later this month, her office announced. Harris will travel to the Island on March 22 to monitor the recovery process and highlight several Biden Administration accomplishments, such as the CHIPS and Science Act, the Inflation Reduction Act, and the Bipartisan Infrastructure Law. Together, these initiatives have resulted in the allocation of billions of dollars to Puerto Rico. This marks Harris’ first visit to Puerto Rico since taking office; she last visited in 2017 when she was a U.S. Senator. President Biden last visited the Island in October 2022, in the aftermath of Hurricane Fiona. During that visit, Biden announced proposals to accelerate the reconstruction of the power grid.
PREPA hearings enter second week
A key hearing over the Puerto Rico Electric Power Authority’s plan to repay its $9 billion debt enters its second week in the courtroom of Judge Laura Taylor Swain. It is the longest bankruptcy in the history of the U.S. municipal markets. This week, economists and engineers are expected to testify on the plan’s effects on households, businesses, and the Island’s economy. Additionally, lawyers for environmental groups are scheduled to question Glenn George, an expert hired by the Financial Oversight and Management Board. Representatives of the PREPA Retirement System, the Union of Electrical Industry and Irrigation Workers, and the Institute for Competitiveness and Economic Sustainability are also among those scheduled to present arguments.
View From The White House
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The Department of Energy announced on Monday investments of $425 million to support the transition to clean energy manufacturing and industrial decarbonization projects in communities where coal mines have closed within the past 25 years.
The Treasury Department last week sanctioned individuals who lead a group of companies known and the Intellexa Consortium, which is accused of helping foreign governments spy on American officials, journalists, human rights activists, and others.
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