“We must cut wasteful government spending,” McCarthy and other members of his leadership said in a joint statement released after Biden’s budget was announced. “Our debt is one of the greatest threats facing America, and now is the time to address this crisis.”
The budget shows the total national debt to increase by about $18 trillion through 2033, rising to more than $50 trillion. But the administration suggested that growth would not threaten the economy. “The economic debt burden will remain low and consistent with recent historical experience over the next decade,” administration officials wrote in the proposal.
Last year’s budget painted a rosy and ultimately over-optimistic picture of the US economy. The government expects gross domestic product to grow 4.2 percent for example, after adjusting for inflation, but in the end it increased more modestly 2.1 percent.
The predictions of the new budget have been more muted, with one caveat. The White House sees the economy growing only 0.6 percent after adjusting for inflation this year, a weak pace in line with outside expectations. It also predicts a significant increase in the unemployment rate – to 4.3%, a notable increase from 3.4 percent in January. Alongside that slowdown, inflation is expected to be moderate.
But officials noted that the administration completed its forecasts in November and that economic data has been better than expected since then. management economist said in a blog post that the unemployment rate “will likely be lower” than the official forecast for that.
Much of the budget’s content is leftovers from Mr. Biden’s previous proposals. But it also includes a few new plans. One of them is the tax on energy used to create new digital currency assets, known as cryptocurrency mining. That activity relies on large amounts of electricity and produces emissions that contribute to climate change.
Administration officials want to discourage the practice, which they say will impede the country’s energy transition. So they have proposed a 30% tax on electricity used therein, in phases over three years, whether it be from an electric utility or a local source such as home solar panels. , on the theory that the energy involved would be better spent in another use.
Report contributed by Jeanna Smialek, Ana Swanson, Carl Hulse, Catie Edmondson, Zolan Kanno-Youngs And Alan Rappeport.
