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MNI POLICY: Biden Budget Seeks Big Boost To Non-Defense Spend

(MNI) WASHINGTON
WASHINGTON (MNI)

President Joe Biden set out a 16% increase in non-defense discretionary spending to USD769 billion, or 3.3% of GDP, and a 1.7% boost in defense spending to USD753 billion in his first budget proposal to Congress Friday.

Biden's preliminary USD1.522 trillion spending request for 2022 is the first step before Congress negotiates the government's budget for October, the start of the fiscal year by when if no budget is passed there will be a government shutdown. The document does not include the USD2.25 trillion infrastructure and jobs plan the president unveiled last week, but officials say the proposals are meant to be complementary.

Its proposal for non-defense discretionary spending as a percentage of GDP would be roughly equal to the historical average over the last 30 years.

It lays out discretionary funding recommendations across a wide range of policy areas, including investments in education, medical research, housing, homelessness, civil rights, climate change, and other administration priorities

The "skinny proposal" represents only discretionary spending, usually a quarter of the total annual budget, and leaves out tax proposals and areas deemed mandatory, including spending on old-age, disability, unemployment and medical benefits.

The USD715 billion request for the Department of Defense, roughly even in inflation-adjusted terms with 2021 spending, represents a compromise between liberals trying to impose cuts and hawks who want spending to increase.

Biden administration officials told reporters on a conference call that the full budget proposal including taxes would be out later this spring. "This is very topline," an administration official said.

The 2022 budget is also the first time in a decade lawmakers will be operating without spending caps that were put in place by an agreement between the Obama administration and congressional Republicans. Biden administration officials have described the elimination of those constraints as an opportunity to pursue investments in areas like education, clean energy and public health.

MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com
MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com

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