Under President Biden’s leadership, the home appraisal gap—an indicator of potential racial and ethnic bias—has shrunk by more than 40%
80% of Congressional Republicans are supporting a plan that would reverse this progress, while cutting Medicare, Social Security, and the Affordable Care Act
This fact sheet is provided by the White House:
Nearly three years ago at a speech to commemorate the centennial of the Tulsa Race Massacre, President Biden committed to addressing racial inequities in the home appraisal process and increase the share of federal contract spending awarded to small disadvantaged businesses by 50%. During remarks at the National Action Network Convention, President Biden highlighted how his Administration is delivering on that promise and announce key progress being made to create opportunity in historically under-resourced communities and narrow the racial wealth gap.
While the President and Vice President continue working to close the racial wealth gap and create more opportunities for all Americans, 80% of Congressional Republicans are supporting a plan that would move the country backwards. Their plan would defund the President’s executive orders on racial equity, while cutting Medicare, the Affordable Care Act, and Social Security—raising the Social Security retirement age in the process. Congressional Republicans would also roll back billions of dollars in investments and tax incentives that support small businesses as they shift to a clean economy. Moreover, the Congressional Republican plan would also increase prescription drug, energy, and housing costs, while fighting for tax giveaways for the very rich and big corporations.
In direct contrast, closing the racial wealth gap has been central to the Biden-Harris Administration’s economic agenda, and the progress we are making under the President’s leadership is delivering for communities nationwide, including Black Americans. The President’s announcements today to build on this progress include:
Rooting out bias in the home appraisal process. The Federal Housing Finance Agency is releasing new data showing that the “appraisal gap”—the likelihood that homes in communities of color are undervalued compared to homes in majority-white communities—has been cut by more than 40% since the Biden-Harris Administration took action on appraisal bias. The data also show that some states have eliminated the gap entirely. In these states, families in communities of color are no more likely to have their home valued at less than the agreed contract price than are families in white communities. This means that more Black Americans and people of color are able to build greater wealth from owning a home.
While there can be many reasons why an individual home is valued below the agreed-upon contract price, systemic undervaluation in communities of color can indicate racial bias in the appraisal process.
On June 1, 2021, the centennial of the Tulsa Race Massacre, President Biden announced the creation of the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE): a first-of-its-kind effort to root out bias and advance equity in the home appraisal process. Since releasing the PAVE Action Plan in March 2022, the Task Force has made critical progress towards implementation, including major steps to empower consumers to take action against appraisal bias; prevent algorithmic bias in home valuation; and support a well-trained and more representative appraiser profession.
Rooting out bias in appraisals can help narrow the racial wealth gap. According to a recent study, eliminating racial disparities in the amount of wealth families gain from owning a home would narrow the wealth gap by 16% between Black and white households and by 41% between Latino and white households.
Achieving record federal investment in small disadvantaged businesses. Today, President Biden is also announcing that in Fiscal Year 2023, agencies surpassed the President’s goal for federal contracting dollars going to small disadvantaged businesses (SDBs), awarding SDBs a record-breaking $76.2 billion, or 12.1% in federal contracts. This sets a new all-time record for federal dollars to SDBs, surpassing the record set by the Biden-Harris Administration last year of $69.9 billion, and illustrates continued progress towards the President’s goal of 15% to SDBs by 2025. Three consecutive years of record-breaking awards to SDBs underscores the Administration’s unwavering commitment to leveling the playing field for the Nation’s small businesses and ensuring that no talent is left on the sidelines, even in the face of legal attacks that seek to undercut the Administration’s efforts.
Increasing federal investments in under-resourced businesses not only helps more Americans realize their entrepreneurial dreams and strengthens the supplier base, but also narrows persistent wealth disparities. According to analysis from the White House Council of Economic Advisers, eliminating racial disparities in business ownership rates would narrow the wealth gap by an additional 22% between Black and white households and by an additional 17% between Latino and white households. Recognizing this historic opportunity, in 2021, the President set a bold goal of increasing the share of the more than $630 billion in contracting dollars going to SDBs each year, including Black, Latino and Asian American-owned small businesses, to 15% by 2025—or an increase of 50% from 2010.
Canceling student loan debt. The Biden-Harris Administration also today announced that it is canceling an additional $7.4 billion in student loan debt for 277,000 borrowers. This brings the total amount of debt relief approved by the Administration to $153 billion for 4.3 million Americans. Today’s announcement builds on the President’s announcement earlier this week, laying out his Administration’s plans that would cancel student debt for tens of millions of Americans, if implemented as proposed. These plans would cancel runaway interest for over 25 million borrowers, cancel loan debt for borrowers eligible for forgiveness programs but not enrolled in those programs, and cancel student debt for borrowers experiencing hardship in their daily lives preventing them from paying back their loans.
Black and Latino borrowers are more likely to experience growth in their student loan balances due to excessive interest accumulation. Four years after graduation, Black bachelor’s degree borrowers, on average, owe more than they borrowed. These plans would not only help create more financial stability for millions of working and middle-class families, they would also help address the disproportionate debt burden on communities of color and advance racial equity.
Today’s announcements build on the progress the President has made to leverage the full force of the Federal Government—including with the signing of two executive orders on advancing racial equity—in order to ensure the promise of America for all communities, including Black Americans. Here are just a few examples of how Bidenomics and the President’s Investing in America agenda are already delivering for Black Americans:
Under President Biden, the Black unemployment rate and gap between Black and white unemployment hit record lows.
Black wealth is up 60% relative to pre-pandemic levels.
The share of Black business owners more than doubled between 2019 and 2022.
Black-owned businesses are being created at the fastest rate in 30 years.
During the inaugural convening of the new White House Council on Supply Chain Resilience, President Biden will unveil more than 30 new actions to strengthen America’s supply chains
You don’t hear anything about it because 1) it’s lots of facts and figures and 2) the nonstop criminality, latest court craziness of Trump and his scheme to become a dictator are dominating news. But the collapse of supply chains during the COVID pandemic was the biggest reason for triggering inflation, and the Biden administration focus to develop Made in America manufacturing and reduce dependency on foreign production is one of the biggest factors in reducing costs for Americans (despite greed-based price hikes). Here’s a Fact sheet from the White House:
As part of his Bidenomics agenda to lower costs for American families, President Biden is announcing nearly 30 new actions to strengthen supply chains critical to America’s economic and national security. These actions will help Americans get the products they need when they need them, enable reliable deliveries for businesses, strengthen our agriculture and food systems, and support good-paying, union jobs here at home.
President Biden announced these actions alongside members of his Cabinet and other senior Administration officials at the inaugural meeting of the new White House Council on Supply Chain Resilience. The Council, which President Biden established, will support the enduring resilience of America’s critical supply chains.
Robust supply chains are fundamental to a strong economy. When supply chains smooth, prices fall for goods, food, and equipment, putting more money in the pockets of American families, workers, farmers, and entrepreneurs. That is why President Biden made supply chain resilience a priority from Day One of his Administration—including by signing an Executive Order on America’s Supply Chains and establishing a Supply Chain Disruptions Task Force that worked with states, Tribes, local governments, businesses, family farms, labor, and allies and partners to address the acute supply chain crises caused by the pandemic. Since then, the Administration has made historic investments to strengthen supply chains and prevent future disruptions by expanding production capacity in key sectors and building infrastructure through the CHIPS and Science Act, the Inflation Reduction Act, and the Bipartisan Infrastructure Law.
These efforts helped unsnarl supply chains, re-normalize the flow of goods, and lower inflation. From October 2021 to October 2023, supply chain pressures as measured by the New York Fed declined from near-record highs to a record low, helping lower inflation, which has fallen by 65% from its peak.
Today, President Biden is building on this progress by announcing bold new actions to further strengthen supply chains, lower costs for families, and help Americans get the goods they need, including:
The creation of the Council on Supply Chain Resilience. Today, President Biden will convene the inaugural meeting of the White House Council on Supply Chain Resilience, which will advance his long-term, government-wide strategy to build enduring supply chain resilience. The Council will be co-chaired by the National Security Advisor and National Economic Advisor, and include the Secretaries of Agriculture, Commerce, Defense, Energy, Health and Human Services, Homeland Security, Housing and Urban Development, the Interior, Labor, State, Transportation, the Treasury, and Veterans Affairs; the Attorney General; the Administrators of the Environmental Protection Agency and the Small Business Administration; the Directors of National Intelligence, the Office of Management and Budget, and the Office of Science and Technology Policy; the Chair of the Council of Economic Advisers; the U.S. Trade Representative; and other senior officials from the Executive Office of the President and other agencies.
Use of the Defense Production Act to make more essential medicines in America and mitigate drug shortages. President Biden will issue a Presidential Determination to broaden the Department of Health and Human Services’ (HHS) authorities under Title III of the Defense Production Act (DPA) to enable investment in domestic manufacturing of essential medicines, medical countermeasures, and critical inputs that have been deemed by the President as essential to the national defense. HHS has identified $35 million for investments in domestic production of key starting materials for sterile injectable medicines. HHS will also designate a new Supply Chain Resilience and Shortage Coordinator for efforts to strengthen the resilience of medical product and critical food supply chains, and to address related shortages. HHS intends to institutionalize this coordination to advance the department’s supply chain resilience and shortage mitigation goals over the long term. The Department of Defense (DOD) will also soon release a new report on pharmaceutical supply chain resilience aimed at reducing reliance on high-risk foreign suppliers. These actions are a subset of the Administration’s broader work to increase access to essential medicines and medical products.
New cross-governmental supply chain data-sharing capabilities. The Administration has developed several cross-government partnerships to improve supply chain monitoring and strategy, including:
The Department of Commerce’s new, first-of-its-kind Supply Chain Center is integrating industry expertise and data analytics to develop innovative supply chain risk assessment tools, and is coordinating deep-dive analyses on select critical supply chains to drive targeted actions to increase resilience. This Center is building broad partnerships across government, industry, and academia, including collaborating with the Department of Energy (DOE) to conduct deep-dive analyses on clean energy supply. Additionally, Commerce is partnering with HHS to assess industry and import data that can help address foreign dependency vulnerabilities and points of failure for critical drugs.
The Department of Transportation’s (DOT) Freight Logistics Optimization Works (“FLOW”) program is a public-private partnership that brings together U.S. supply chain stakeholders to create a shared, common picture of supply chain networks and facilitate a more reliable flow of goods. DOT is announcing a new milestone for FLOW, in which participants are beginning to utilize FLOW data to inform their logistics decision making, helping to avoid bottlenecks, shorten lead times for customers, and enable a more resilient and globally competitive freight network through earlier warnings of supply chain disruption. As the effort continues to mature, DOT will work with the Department of Agriculture (USDA) to increase data transparency for containerized shipments of agricultural products in the United States, efforts that can help producers and sellers avoid disruptions that can increase food prices.
These new analytical capabilities will enable the Council to coordinate a more complete, whole-of-government critical supply chain monitoring function.
Additional actions to support stronger supply chains and access to affordable, reliable energy and critical technology:
Investing in critical supply chains:
DOE today announced $275 million in grant selections for its Advanced Energy Manufacturing and Recycling Grant Program, investments that will revitalize communities affected by coal mine or coal power plant closures through investment in clean energy supply chains, including production of critical materials, components for grid-scale batteries and electric vehicles, onshore wind turbines, and energy conservation technologies. DOE also announced up to $10 million of funding for a “critical material accelerator” and a $5.6-million prize to develop circular clean energy supply chains. These efforts build on action by President Biden to authorize DOE’s use of the DPA to increase domestic production of five key clean energy technologies—including electric heat pumps—as well as DOE’s recently announced $3.5-billion investment through the Bipartisan Infrastructure Law to boost domestic production of advanced batteries and battery materials needed for essential clean energy technologies such as stationary storage and electric vehicles.
USDA is making investments worth $196 million to strengthen our domestic food supply chains and create more opportunity for farmers and entrepreneurs in 37 states and in Puerto Rico. These investments—which build on prior investments in diversified food processing, resilient agricultural markets, and fertilizer production—expand farmer income opportunities, create economic opportunities for people and businesses in rural areas, and lower food costs.
DOD, building on the $714 million in DPA investments it has made in 2023 to support defense-critical supply chains, will publish the first ever National Defense Industrial Strategy (NDIS). The NDIS will guide engagement, policy development, and investment in the defense industrial base over the next three to five years. It will ensure a coordinated, whole-of-government approach to and focus on the multiple layers of suppliers and sub-suppliers that make up these critical supply chains.
Planning for long-term industrial resilience and future supply chain investments:
Launch of the quadrennial supply chain review. The Council will complete the first quadrennial supply chain review by December 31, 2024. As part of the review, the Council will update criteria on industries, sectors, and products defined as critical to national and economic security. In addition, 12 months after the Council promulgates the criteria, and annually thereafter, the Council will apply the criteria to review and update the list of critical sectors, as appropriate.
Smart manufacturing plan. DOE’s Office of Energy Efficiency and Renewable Energy (EERE) Advanced Materials and Manufacturing Technologies Office (AMMTO) is sponsoring a study by the National Academies of Science, Engineering, and Medicine to develop a nationwide plan for smart manufacturing. The report will establish key priorities for investment to support new digital and artificial intelligence technologies. These investments will enhance the productivity and security of the manufacturing systems that are critical for maintaining domestic supply chains.
Deploying new capabilities to monitor existing and emerging risks:
New Resilience Center and tabletop exercises for supply chain disruptions. The Department of Homeland Security (DHS) is announcing the launch of a new Supply Chain Resilience Center (SCRC), which will be dedicated to ensuring the resilience of supply chains for critical infrastructure needed to deliver essential services to the American people. Near-term priorities will include addressing supply chain risks resulting from threats and vulnerabilities inside U.S. ports. Additionally, in 2024, in collaboration with other federal agencies and foreign governments, DHS will facilitate at least two tabletop exercises designed to test the resilience of critical cross-border supply chains. Further, DHS and the Department of Commerce will collaborate to continue to strengthen the semiconductor supply chain and further the implementation of the CHIPS and Science Act.
Launch of DOT Multimodal Freight Office. As part of the Bipartisan Infrastructure Law (“BIL”) implementation, DOT is launching its Office of Multimodal Freight Infrastructure and Policy (“Multimodal Freight Office”). This office is responsible for maintaining and improving the condition and performance of the nation’s multimodal freight network including through the development of the National Multimodal Freight Network, review of State Freight Plans, and the continued advancement of the FLOW initiative in partnership with the Bureau of Transportation Statistics.
Monitoring of climate impacts. The White House National Security Council, Office of Science and Technology Policy, and the Council of Economic Advisers will co-lead an interagency effort in partnership with the National Oceanic and Atmospheric Administration to monitor global developments related to El Niño, including this climate phenomenon’s impact on U.S. and global commodity prices, agriculture and fishery output, disruptions to global and trade supply chains, and resulting impacts on food security, human health, and social instabilities.
Energy and critical mineral supply chain readiness. To more consistently track risk and opportunity across energy supply chains, DOE is developing an assessment tool that accounts for raw materials, manufacturing, workforce, and logistics considerations. Additionally, to help assess the potential for trade disruptions of select critical minerals and materials, the Department of the Interior’s U.S. Geological Survey (USGS) will map and develop geospatial databases for select global critical product supply chains, with a current focus on semiconductor components; and will seek designation by the Chief Statistician of the United States of a federal statistical unit providing the nation’s official minerals statistics. Additionally, the National Science and Technology Council’s Critical Minerals Subcommittee plans to launch a new criticalminerals.gov website in January 2024 that will highlight cross-governmental supply chain efforts.
Defense supply chain mapping and risk management. DOD is increasing supply chain visibility through the creation of a Supply Chain Mapping Tool to analyze supplier data for 110 weapon systems. This capability will be used to develop defense industrial base wargaming scenarios to identify vulnerabilities and develop mitigation strategies.
Engaging public and private stakeholders to expand supply chain risk modeling:
Supply Chain Data and Analytics Summit. The Department of Commerce will convene a diverse array of public and private stakeholders at a Supply Chain Data and Analytics Summit in 2024. A key aim of the summit will be to invite expert input into supply chain risk assessment models and tools. The summit will also assess data availability, utility, and limitations and consider actions to improve data flows.
AI hackathons to strengthen critical mineral supply chains. USGS, the Defense Advanced Research Projects Agency (DARPA), and the Advanced Research Projects Agency-Energy (ARPA-E), building on their 2022 prize challenges announcement, will host a series of hackathons beginning in February 2024 to develop novel artificial intelligence approaches to assess domestic critical mineral resources.
Risk mapping for labor rights abuses. The Department of Labor (DOL) updated its Comply Chain guidance for identifying and addressing labor rights violations in global supply chains. In addition, DOL is providing $8 million for two four-year projects to identify supply chain traceability methods and technologies to address child labor or forced labor risks in diverse supply chains, such as the cobalt and cotton sectors. DOL will also undertake new supply chain research on mining and agriculture products across Asia, Africa, and Latin America.
In addition to the announcements above, the Administration continues to deepen engagement with allies and partners to strengthen global supply chains, including:
Deepening international early warning systems to detect and respond to supply chain disruptions in critical sectors with allies and partners, including:
With the European Union. In May 2023, the United States and the EU established an early warning system for semiconductor supply chain disruptions under the U.S.-EU Trade and Technology Council.
With Japan and the Republic of Korea. In August, the United States, Japan, and the Republic of Korea committed at Camp David to launch early warning system pilots, starting by identifying priority products and materials such as critical minerals and rechargeable batteries and establishing mechanisms to rapidly share information on disruptions to critical supply chains.
With Mexico and Canada. Through the United States-Mexico-Canada Agreement (USMCA), the United States, Canada, and Mexico established a trilateral Sub-Committee on Emergency Response to coordinate North American efforts to maintain regional trade flows during emergency situations.
With Australia, Canada, the European Union, Japan, the United Kingdom, and the World Health Organization. The Global Regulatory Working Group on Drug Shortages, currently chaired by the U.S. Food and Drug Administration, meets quarterly to discuss product shortages participating jurisdictions are encountering and ways such shortages are being addressed. The group’s exchange of information helped address product shortages experienced by each partner during the COVID-19 pandemic and subsequent “tripledemic” including COVID-19, influenza, and respiratory syncytial virus.
With global partners. Through the President’s Emergency Plan for Adaptation and Resilience (PREPARE), the U.S. government funds activities to improve the weather, water, and climate observing capabilities and data sharing in regions and countries that are needed to produce actionable local, regional, and global climate information and minimize impacts upon infrastructure, water, health, and food security.
Strengthening global supply chains through other innovative multilateral partnerships:
Indo-Pacific Economic Framework for Prosperity (IPEF) Supply Chain Agreement. The United States and 13 IPEF partners concluded a first-of-its-kind Supply Chain Agreement that gives partners new tools to build diversified, competitive supply chains for critical sectors, including an IPEF Supply Chain Council to coordinate action. The Department of Commerce is kickstarting this effort through pilot projects to enhance the resilience of key supply chains, including those related to semiconductors, critical minerals, and cold chain services. In addition, the Supply Chains Agreement establishes a Crisis Response Network that will allow IPEF partners to better prepare for and respond to supply chain disruptions through emergency communication channels and joint crisis simulations, as well as a Labor Rights Advisory Board to promote worker rights across supply chains.
Americas Partnership for Economic Prosperity (Americas Partnership). The Americas Partnership is focused on, among other things, strengthening and diversifying supply chains. In its first year of work, the Americas Partnership will focus on the development of regional competitiveness plans in three critical sectors: semiconductors, clean energy, and medical supplies.
North American Leaders’ Summit (NALS). Through NALS, the United States, Canada, and Mexico are enhancing the resilience of North America’s supply chains for critical minerals, semiconductors, and other essential goods. This trilateral effort includes partnering with regional industry and academia to create quality jobs, promote investment, grow talent, and catalyze innovation.
Partnership for Global Infrastructure and Investment (PGI). Through PGI, the United States is mobilizing public and private financing to incentivize investments and develop transformative economic corridors to diversify global supply chains and create new opportunities for American workers and businesses. From the development of the Lobito Corridor, connecting the Democratic Republic of the Congo and Zambia with global markets through Angola, to the launch of the landmark India-Middle East-Europe Economic Corridor—through PGI, the United States is creating novel interconnections across regions to facilitate trade and secure clean energy, digital, food security, and other critical supply chains.
Global Labor Directive. On November 16, President Biden signed the Presidential Memorandum on Advancing Worker Empowerment, Rights, and High Labor Standards Globally. The President directed several departments to address labor rights abuses in global supply chains and identify innovative approaches to promote internationally recognized labor rights throughout the supply chain, including by collaborating with labor organizations, workers, and other labor stakeholders to consider efforts that support worker-led monitoring of labor rights compliance.
The Mineral Security Partnership (MSP). The Department of State, along with partners including Australia, Canada, Finland, France, Germany, India, Italy, Japan, Norway, the Republic of Korea, Sweden, the United Kingdom, and the European Union (represented by the European Commission), established the MSP to accelerate the development of diverse and sustainable critical energy minerals supply chains. The MSP works with host governments and industry to facilitate targeted financial and diplomatic support for strategic projects along the value chain with an emphasis on those projects which adhere to and promote the highest labor, environmental and sustainability standards.
International Technology Security and Innovation (ITSI) Fund. Created by the CHIPS and Science Act of 2022, the ITSI Fund promotes the diversification of the global semiconductor supply chain. State will partner with countries to develop the most attractive economic environments for private investment. With ITSI Fund support, the Organization of Economic Cooperation and Development has established the Semiconductor Exchange Network allowing policymakers in the semiconductor industry to examine risks and interdependencies on the current state of the semiconductor ecosystem. Additionally, the ITSI Fund is supporting ecosystem reviews in key partner countries that will inform future collaboration on developing this critical sector.
Further evidence that President Joe Biden’s economic plan – essentially building the economy from the bottom up and the middle out, and creating longterm, sustainable, stable growth – is working. Despite the manufactured hysteria over inflation and impending recession, the data shows otherwise – in terms of record 12 million jobs created, lowest unemployment in 50 years, real increase in wages.
Biden is also able to show progress in slowing inflation – which has been much more crippling throughout the world – and has been able to demonstrate that while his economic policies will address the national debt (a record reduction in the budget deficit), Republicans’ agenda would worsen the national debt (largely caused by the Trump/GOP tax plan that reduced taxes on the wealthiest individuals and corporations, and which added $7.4 trillion, or 25% of the national debt, in the four-year term). The Republican plan would actually add $3 trillion MORE to the national debt.
President Biden, commenting on the January CPI Report, said:
“Inflation in America is continuing to come down, which is good news for families and businesses across the country. Today’s data confirm that annual inflation has fallen for seven straight months. Inflation for food at the grocery store came down again last month. Gas prices are down about $1.60 from their peak last year. And real wages for working Americans are up over the last seven months, delivering welcome breathing room for American families. We are seeing this progress even as unemployment remains at its lowest level since 1969 and job growth remains resilient.”
“There is still more work to do as we make this transition to more steady, stable growth, and there could be setbacks along the way. That is why my unwavering focus is on continuing to lower costs for families, rebuild our supply chains, and invest in America. Right now, because of the Inflation Reduction Act we passed last year, we are lowering prescription drug costs, health care costs, and home energy costs for tens of millions of Americans all while lowering our deficits. My administration is eliminating junk fees which make it harder for American families to make ends meet at the end of the month. And we are creating manufacturing jobs all across the country, which will lower costs and rebuild our supply chains.”
“Unfortunately, many of my Republican friends in Congress seem intent on taking us in the opposite direction. They have proposed repealing the Inflation Reduction Act, which would make inflation worse, shower billions of dollars on Big Pharma, and increase the deficit. They are threatening to raise costs for seniors by threatening to cut Medicare and Social Security, and other critical programs that American seniors and families count on. And some are threatening to default on the full faith and credit of the U.S., which would raise costs and create economic chaos. I will stand firmly against any effort to make inflation worse and increase costs for families. Today’s data reinforces that we have made historic progress and are on the right track, and now we need to finish the job. “
The Congressional Republican Agenda to Increase the Debt by Over $3 Trillion
CongressionalRepublicanleaders insist that the national debt is among our nation’s greatest challenges, and reducing it is among their highest priorities. In fact, they claim that reducing the debt is so urgent it warrants endangering the entire U.S. economy through debt limit brinksmanship. But their legislative agenda to date points in a very different direction—with proposals that would increase the debt by over $3 trillion.
The first bill passed by the new Republican House majority increased the debt by $114 billion by allowing wealthy people and corporations to continue to cheat on their taxes.
Congressional Republicans proposed repealing—and are even running ads attacking—reforms President Biden signed to lower prescription drug costs. Repealing these policies would increase the amount of money Medicare pays Big Pharma, raise costs for seniors, and add $159 billion to the debt.
House Republicans have advocated and proposed repealing tax increases on large corporations that President Biden has signed into law, adding $296 billion to the debt.
House Republicanleaders have also committed to extend the expiring Trump tax cuts, a $2.7 trillion debt increase that would give the top 0.1% (with incomes over $4 million per year) a $175,000 annual tax cut, over 2.5 times a typical family’s annual income.
Grover Norquist, President of Americans for Tax Reform, exposed the political logic of Congressional Republicans’ fiscal hypocrisy. He told Republicans their focus should be “not the deficit” after all: it’s to shift public discussion to cutting spending, paving the way for more tax cuts for the wealthy.
That trickle-down economic theory has never worked. President Trump and President Bush’s tax cuts addedtrillions to the debt and failed to deliver their promised benefits for the economy or American workers. And taking revenues—and even savings from cutting corporate subsidies—off the table means Congressional Republicans consistently propose deep cuts to programs seniors and middle-class and working families count on.
That’s why the American people deserve to see Congressional Republicans’ full and detailed budget plan and compare it with the President’s Budget plan to invest in America, bring down costs for families, protect and strengthen Social Security and Medicare, and reduce the deficit, which he will release March 9.
Congressional Republicans’ Commitment to Debt Increases
The fiscal consequences of the debt increases Congressional Republicans have put at the top of their agenda are stark. After a decade, these policies, if enacted, would add over $3 trillion to the debt (accounting for debt service costs), increasing debt as a share of the economy by almost 10 percentage points. Congressional Republicans’ debt increases include:
The Tax Cheats Protection Act: House Republicans’ first bill in the new Congress would add $114 billion to the Federal debt by repealing President Biden’s legislation that cracks down on wealthy tax cheats. While working people pay 99% of taxes on their income from wages and salaries, the top 1% hides about 20% of their income from tax, including by funneling it through offshore accounts and tax havens that do not report earnings. President Biden passed a law to make our tax system fairer by cracking down on wealthy tax cheats, while protecting middle-class taxpayers and small businesses and improving taxpayer service. But 221 House Republicans voted to enable tax fraud by wealthy Americans and large corporations.
Increase Spending With a Handout to Big Pharma: House Republicans have introduced a bill to repeal the entire Inflation Reduction Act (IRA), including the reforms President Biden signed into law to lower prescription drug costs. Congressional Republicans and Big Pharma have launched a concertedattack on the IRA’s prescription drug reforms, advocating to increase both Federal spending and seniors’ costs to increase Big Pharma’s profits. Thanks to the new prescription drug law, Medicare will finally be able to negotiate drug prices, and drug companies will pay rebates to Medicare if they try to hike their prices faster than the rate of inflation. Congressional Republicans want to repeal these policies, giving a $159 billion handout to Big Pharma, raising costs for seniors, and driving up the Federal debt.
Enrich Multi-Billion Dollar Corporations: In 2020, 55 of the largest, most profitable corporations paid $0 in taxes. The President signed into law legislation to level the playing field for companies and small businesses that are already paying their fair share in taxes. Under his corporate minimum tax, the largest, most profitable corporations—those with over $1 billion in profits—have to pay a 15% minimum tax on the profits they report to their shareholders. But House Republicans—through their Inflation Reduction Act repeal bill and other statements—have made clear that they want to enrich large corporations that don’t pay their fair share. That would add $222 billion to the debt.
Increase the Tax Subsidy for Stock Buybacks: President Biden signed into law a surcharge on corporate stock buybacks, which reduces the differential tax treatment between buybacks and dividends and encourages businesses to invest in their growth and productivity as opposed to paying out corporate executives or funneling tax-preferred profits to foreign shareholders. The President in his State of the Union address proposed quadrupling the stock buybacks tax to 4% to address the continued tax advantage for buybacks and encourage long-term investment over giveaways to executives. House Republicans instead want to repeal the stock buybacks tax and let corporations continue to funnel tax-preferred profits to shareholders instead of investing in productivity and the broader economy. That would add $74 billion to the Federal debt.
Extend President Trump’s Unpaid-for Tax Giveaway to the Wealthy and Large Corporations: President Trump and Congressional Republicans deliberately sunset portions of their tax giveaway to the wealthy and large corporations. They did this to conceal how much their plan added to the debt as well as how large the tax breaks were for multi-millionaires and large corporations. Now, House RepublicanLeadership has made clear that extending President Trump’s tax giveaway to the wealthy and large corporations is one of their top priorities. An analysis by the Tax Policy Center found that doing so would mean an average tax cut of $175,000 for the top 0.1%—Americans making more than $4 million per year. That average tax cut is more than 2.5 times a typical family’s annual income. Meanwhile, extending the expiring Trump tax cuts would add $2.7 trillion to the Federal debt over 10 years.
The President supports a fiscally responsible approach to continuing current tax policies for people making less than $400,000 per year, and opposes any tax increase for this group. Meanwhile, Congressional Republicans—including the more than three quarters of them who are signatories to Grover Norquist’s tax pledge—have made clear they will oppose paying for middle-class tax cuts by raising taxes on the wealthy and large corporations.
Even Without a Budget, Congressional Republicans Are Already Showing Who Will Pay the Price
The proposals Congressional Republicans have put forward show that, even as they commit to massive tax cuts for the wealthy and large corporations, they are more than ready to raise taxes on middle-class and working families. The House Republican IRA repeal bill would cut premium tax credits that are helping an estimated 14.5 million people pay for health insurance. And the House Budget Committee last week doubled down on eliminating Affordable Care Act premium tax credits for middle-income people with high health insurance premiums: a tax increase of $7,600 per year for a typical 62-year old earning $55,000.
In addition, some Congressional Republicans continue to push a national retail sales tax bill that would repeal most existing taxes and impose a new 30% sales tax on American families. The legislation would increase debt by trillions—and cut taxes for a couple making a million dollars a year by more than $200,000—and at the same time would raise taxes by at least $7,000 for a retired couple with $60,000 in Social Security income and at least $6,000 for a single mom making $38,000, a recent analysis found.
The bottom line is: having committed to over $3 trillion in debt increases and also insisted they are committed to reducing the debt, Congressional Republicans owe the American public a complete and transparent accounting of who will foot the bill. Will it be middle-class and working families, seniors, students, or all of the above?
House Republican agenda amounts to a death panel for Medicare and Social Security:
The contrast in agendas for America between President Joe Biden and the Democrats and the Congressional Republicans could not be more stark.
While President Biden, in his State of the Union address, described his plans for building on the historic job creation he has achieved, making more progress against inflation, reducing the deficit by making the wealthy and big corporations pay their fair share, and protecting Medicare and Social Security benefits from cuts, in contrast, House Republicans opened the week by announcing the latest in a long succession of attempts to undermine Medicare and Social Security.
Bloomberg reports that as part of a ransom demand for not triggering a financial meltdown, top House Republicans want an agreement that both earned benefits programs are put on track for cuts.
As The Washington Post reported in late January, House Republicans have continuously pressed for slashing Medicare and Social Security benefits in exchange for not actively harming the American economy with the first debt default in our history.
Republicans have also introduced legislation to repeal the Inflation Reduction Act, which would be one of the biggest Medicare benefit cuts in history, depriving seniors of lower insulin costs, the $2,000 cap on out of pocket expenses for prescription drugs, and Medicare’s new ability to negotiate lower drug costs.
Today’s news is even more confirmation that House Republicans are taking direct aim at programs that are critical to the middle class, even as they vote for tax giveaways to the rich that would manage to increase taxes on working families while raising the deficit at the same time, the White House stated.
“With the President poised to announce new plans to keep making our economy works from the bottom up and the middle out – not the top down – House Republicans are dead-set on the opposite,” said White House spokesperson Andrew Bates. “They’re opening the week unveiling their latest in a long line of ultimatums about how they’ll act to kill jobs, businesses, and retirement accounts if they can’t cut Medicare and Social Security benefits. Meanwhile, they’re voting to worsen the deficit with tax welfare for the rich and big corporations. Think about that: they’re targeting the Medicare and Social Security benefits that middle class families pay in to earn their whole lives, then turning around and giving tax handouts to big corporations. The American people want more jobs and lower costs, not a death panel for Medicare and Social Security.”
“While President Biden shows the American people his plan to build on the unprecedented deficit reduction his leadership has already delivered, by having the richest taxpayers and big corporations pay their fair share and lowering prescription drug prices, House Republicans’ only plan is to make the deficit skyrocket by over $3 trillion with unaffordable tax giveaways to wealthy special interests,” stated White House spokesperson Andrew Bates. “They’ve even proposed raiding Medicare so that the ultra-rich can enjoy new tax welfare. Meanwhile, House Republicans are threatening to actively throw our economy into a tailspin with a default – which they have a non-negotiable, Constitutional duty to prevent – unless they can further cut Social Security, Medicare and Medicaid. It’s utterly backwards. The President is delivering on his commitment to build an economy that grows from the bottom up and the middle out – not from the top down. The House GOP seems determined to pull the American economy in the opposite direction, increasing taxes on working families while giving $3 trillion in new handouts for the rich.”
The chart below is based on the record:
Policy
10-Year Deficit Increase
Republican House-passed bill to make it easier for billionaires to cheat on their taxes
Republican Proposals to repeal Inflation Reduction Act’s prescription drug savings, which will raise costs for seniors and Medicare and increase federal spending
Deficit increases from Republican proposals to date
Over $3 trillion
Congressional Republicans keep calling for earned benefits on the one hand, but more tax giveaways for the rich on the other
After President Biden put Republicans on the defensive over their long-public intentions to slash Medicare and Social Security benefits, a continuing list of congressional Republicans ranging from Ron Johnson last week to Senator Mike Rounds yesterday, keep proving his point.
Whether it’s a large number of House Republicans and Rick Scott pushing to repeal the Inflation Reduction Act in what would be one of the worst Medicare benefit cuts of all time, or the Republican Study Committee proposing benefit cuts and the privatization of Social Security of last year, the receipts are undeniable. Formonths, congressional Republicans have indicated they would even use the threat of a catastrophic default to cut Medicare and Social Security benefits.
Republicans in Congress justify these intentions under the guise of fiscal responsibility. However, at the same time, they are advocating for enormous tax giveaways to rich special interests that, combined, would add over $3 trillion to the debt. Those two positions are irreconcilable.
The first vote the Republican-controlled House took was to help wealthy individuals and multinational corporations worsen inflation by cheating on their taxes. They broadly support renewing the Trump tax giveaways for the rich. And in addition to being a Medicare benefit cut, repealing the Inflation Reduction Act would at the same time be more tax welfare for the rich and a giant windfall for Big Pharma. And that’s just the tip of the iceberg.
“It’s irreconcilable to support Medicare and Social Security benefit cuts in the name of supposed ‘fiscal responsibility,’ while at the same time adding $3 trillion to the national debt with a seemingly endless gravy train for rich special interests,” said White House spokesperson Andrew Bates. “Prioritizing tax giveaways for the wealthy and specific handouts for Big Pharma over the Medicare and Social Security benefits that middle class families pay to earn throughout their lives is a recipe for making our economy work from the top-down. The last thing that Americans who’ve felt invisible want is cuts to lifeline programs in exchange for permanent trickle-down economics.”
It is truly shocking to hear “poll” results where the majority of people think President Biden has done nothing, that the economy is weak, that no new jobs have been created. Beyond absurd – you have to wonder about who was polled, how the polling was done, or what rock these people have been under, or if they are permanently wired to Fox Fake News. This preview of the State of the Union Address providing a Fact Sheet on the Biden Administration’s economic record, comes from the White House:
President Biden has long believed that we must build the economy from the bottom up and middle out, not the top down. As the President says, when the middle class does well, the poor have a ladder up and the wealthy still do very well. He believes the best way to grow the economy, create good-paying jobs, and lower costs for families is by promoting workers, investing in America and its people, making the economy more competitive, and reforming the tax code to reward work and not wealth. Our progress over the last two years shows that his economic strategy is working.
The state of the economy is strong. In his State of the Union address, President Biden will highlight the historic progress we have made to bring the economy back from the pandemic and create more jobs in a two-year period than under any other president on record. He will discuss progress lowering costs and providing more breathing room for families, including cutting prescription drug costs, health insurance premiums, and energy bills, while driving the uninsured rate to historic lows. He will outline the manufacturing boom across the country—in infrastructure, semi-conductors, and clean energy—that is strengthening parts of the country left behind and creating good jobs, including for workers without college degrees.
And, he will emphasize that his economic strategy has been a fiscally responsible one. President Biden’s predecessor passed a nearly $2 trillion unpaid for tax cut with benefits skewed to the wealthy and large corporations, and the deficit went up every single year under his watch. Under President Biden, the deficit has fallen by $1.7 trillion, and his reforms to take on Big Pharma, lower prescription drug costs, and make the wealthy and large corporations pay their fair share will reduce the deficit by hundreds of billions more.
President Biden knows that the work to build an economy from the bottom up and middle out is far from done. He will say that we need to build on this work to continue growing our economy and lowering costs. He will discuss the work to come to implement his historic investment agenda in a way that benefits all Americans. And, the President will preview the budget he will send to Congress on March 9, which will build on the historic economic progress of the past two years by continuing to invest in America and its people, continuing to lower costs for families—from child care to housing to college to health care—protecting and strengthening Social Security and Medicare, and reducing the deficit through additional reforms to ensure the wealthy and largest corporations pay their fair share.
Historic Progress to Create Jobs, Promote Workers, and Transition to Steady and Stable Growth
When President Biden took office, the economy was in crisis, millions were out of work, and Main Streets were shuttered. In two years, the President has overseen a historic economy recovery and laid the foundation for steady and stable growth in the years to come.
A historic, equitable economic recovery. President Biden’s economic strategy led to a historic recovery with tangible benefits for workers and families. Since President Biden took office, the economy has created more than 12 million jobs—including more than 800,000 manufacturing jobs—and the unemployment rate is at a 54-year low, including near record lows for Black workers. The unemployment rate for Hispanic workers hit a record low last year. The past two years were also the best two years for new small business applications on record. None of this progress was pre-ordained. Before President Biden signed his Rescue Plan into law, experts predicted it would take far longer to create this many jobs. And few—if any—experts predicted it would be possible to get the unemployment rate down to a level last seen in 1969. In fact, before the Rescue Plan passed, the Congressional Budget Office projected the unemployment rate in the first quarter of 2023 would be 4.8%, rather than its current level of 3.4%.
More breathing room and economic security for families. This historic jobs recovery, along with Biden-Harris Administration policies designed to help workers and families, has left families more economically secure than before the pandemic. Compared to pre-pandemic levels, households are now less likely to be delinquent on their credit card bills and mortgages, and more likely to have health insurance. They are facing fewer evictions and foreclosures than there were before the pandemic, and bankruptcy rates are lower as well. This economic security is giving families peace of mind and breathing room that they didn’t have before the pandemic. Child poverty also fell to a historic low in 2021, and the President will call on Congress to continue these gains through the expanded Child Tax Credit, even as he has taken action to lift nearly 1 million children out of poverty by modernizing nutrition benefits.
Progress on transitioning to steady, stable growth with lower inflation. In the wake of unprecedented economic disruption from a historic pandemic, inflation has been a challenge all over the globe. Last spring, President Biden set the goal of transitioning our economy to lower inflation, while maintaining a resilient job market for American workers. Now, annual inflation has fallen for six months straight, driven in large part by a roughly $1.50 decline in gas prices compared to last summer. Over the second half of 2022, three-month core inflation fell from nearly 8% at an annualized rate to 3% at an annualized rate—at the same time that the unemployment remained at or near 50-year lows. As a result of the progress on inflation and the resilience of the job market, wages adjusted for inflation are higher than they were seven months ago. While there is more work to do to bring inflation down and lower costs for families—and there may be setbacks along the way—the past six months have marked significant progress toward the President’s goal of bringing down inflation without giving up the economic progress we’ve made.
Manufacturing Boom Across the Country and Historic Investments in Infrastructure
Even before the pandemic, the middle class was hollowed out. Manufacturing jobs moved overseas and factories closed down. The President believes that the United States can lead the world in manufacturing again. His economic plan has done just that—generate a manufacturing boom across the country and build an economy where no one is left behind. The President’s economic plan is stimulating new factories and manufacturing lines and creating good-paying jobs that don’t require a four-year degree. His plan includes the most significant upgrade to our nation’s infrastructure in generations—an investment larger than FDR’s investment Rural Electrification and Eisenhower’s efforts to build the Interstate Highway system. It includes the most significant clean energy plan ever, transitioning the clean energy economy and lowering households’ energy costs. And, it includes the most substantial investment in science, innovation, and industrial strategy in over 50 years.
In just the two years since President Biden took office, we have spurred more than $700 billion in announced private investment in manufacturing, utilities, and energy from more than 200 companies in all 50 states. Much of this investment is driven by the semiconductor, energy, electric vehicles and batteries, and other cutting-edge sectors.
Ensuring President Biden’s agenda creates a future made in America. Building on the historic investment agenda the President has signed into law, President Biden is ensuring that our historic infrastructure investments use materials made in America. For decades, Buy America laws focused on iron and steel and only covered certain federally funded infrastructure projects. This giant loophole meant projects could be built with other materials sourced from anywhere in the world. The Biden-Harris Administration is working to close this loophole and implement new standards, once and for all, so materials for roads and bridges, airports, transit, rail, water, high-speed internet, and clean energy infrastructure are made in America and support American jobs.
The President will announce in the State of the Union that he is issuing proposed guidance to ensure construction materials from copper and aluminum to fiber optic cable, lumber, and drywall, are made in America. Once finalized, these standards will apply to virtually all infrastructure spending supported by Federal financial assistance—not simply roads and bridges, but also buildings, water infrastructure and high-speed internet, providing consistency for companies and state and local governments to apply the standards and a strong federal government-wide demand signal.
These steps complement the Administration’s implementation of the most robust updates in nearly 70 years to the Buy American Act for federal procurement. Those updates are helping to ensure that taxpayers’ dollars support American manufacturing, boost resiliency in critical industries, and create good-paying jobs right here at home. The Buy American rule increased the percentage value of component parts manufactured in the US from 55% to 60% this past fall as the first step toward increasing that value to 75%.
Lowering Health Care Costs for Families
The President knows what it’s like to stare at the ceiling, worried about paying for prescriptions or health care. He believes that every American has a right to the peace of mind that comes with knowing they have access to affordable, quality health care. President Biden passed legislation to lower health care and prescription drug costs for American families, giving families more breathing room. Tomorrow, he will discuss the historic progress we have made on lowering health care costs under his watch, including steps to strengthen Medicare, Medicaid, and the Affordable Care Act (ACA), and steps we must take to build on that progress and give more families the peace of mind of affordable prescriptions and health care.
$800 lower health care premiums. A record-setting 16.3 million people signed up for ACA coverage this year, and the national uninsured rate hit an all-time low last year. That’s thanks in large part to President Biden and Democrats in Congress’ work to lower premiums for ACA coverage by an average of $800 per person per year—along with President Biden’s actions to quadruple consumer assistance, increase outreach, and close the “family glitch” loophole that blocked many children and spouses from affordable coverage. Tomorrow, the President will call on Congress to make these savings for American families permanent, so we can continue our work to make health care a right, not a privilege.
60 million Medicare beneficiaries will be protected from skyrocketing drug costs. President Biden took on Big Pharma—and won. Thanks to the new prescription drug law, Medicare will be able to negotiate drug prices and cap out-of-pocket pharmacy costs at $2,000 per year under Part D, and drug companies will pay rebates to Medicare if they try to hike their prices faster than the rate of inflation. For the last six weeks, seniors across the country have been benefiting from key drug pricing protections that are putting money back in their pockets:
$35 price cap on insulin in Medicare. Starting this year, Medicare beneficiaries will pay no more than $35 per month per insulin prescription. 1.5 million people would have each saved, on average, $500 per year had this law been in effect in 2020. The President will call on Congress to extend this commonsense, life-saving protection to all Americans, not just people with Medicare.
$0 vaccines through Medicare. More adult vaccines are now available without any co-pays under Medicare Part D thanks to the new prescription drug law. This includes the shingles vaccine, which used to cost seniors as much as $200.
1 million surprise medical bills are prevented every month. Before President Biden took office, millions of people received surprise bills for out-of-network care, costing them hundreds or thousands of dollars. The Administration is protecting millions of consumers from surprise medical bills through the implementation of the No Surprises Act, which has already protected 10 million Americans from unfair, undeserved out-of-network charges.
$3,000 in savings on hearing aids. In October 2022, over-the-counter hearing aids hit the shelves following a rule from the Food and Drug Administration. Now, millions of Americans can buy hearing aids for low to moderate hearing loss without a prescription or exam. This is anticipated to save Americans as much as $3,000 per pair, providing more breathing room for the estimated 30 million Americans with mild-to-moderate hearing loss.
39 states and the District of Columbia have expanded Medicaid coverage. Missouri, Oklahoma, and South Dakota are the most recent states to expand Medicaid to hundreds of thousands of low-income adults previously locked out of Medicaid coverage. The Administration remains committed to closing the coverage gap in the remaining 11 states, and the President will call on Congress to finish the job. In addition, the Administration also worked with over half the states and DC to extend Medicaid postpartum coverage for millions of women.
Promoting Competition
As President Biden said at last year’s State of the Union, “capitalism without competition isn’t capitalism. It’s exploitation—and it drives up prices.” Over the past year, the Administration has been delivering for the American people to lower prices, protect workers, and increase competition across the economy. In this year’s State of the Union, the President will highlight progress we need to continue to make to promote competition and protect consumers.
Cracking down on junk fees. The Consumer Financial Protection Bureau (CFPB) is lowering or eliminating the banking and credit card “junk” fees that too many Americans pay. The CFPB announced a proposal that will slash excessive credit card late fees to $8 from approximately $30, which combined with other measures could save consumers up to $9 billion a year in late fees. Last year, the CFPB also targeted overdraft and bounced check fees—making changes that will cut fees by over $1 billion a year. The Department of Transportation (DOT) also proposed a rule that would require airlines and online search sites to disclose up front any fees to choose seats including to sit next to one’s child, for baggage, and for changes or cancellations. It also published a dashboard of airline policies when flights are delayed or cancelled due to issues under the airlines’ control, leading 9 airlines to change policies to guarantee coverage of hotels and 10 airlines to guarantee coverage of meals.
The President will re-state his call on Congress to pass a Junk Fees Prevention Act to ban resort and family seating fees, eliminate unnecessary early termination fees for internet and phone services, and crack down on excessive fees and other practices that drive up ticket prices. DOT will also launch a family seating dashboard to raise awareness about airline policies and undertake a rulemaking to ban these fees.
Addressing non-compete agreements. Roughly 30 million Americans, including many low-wage workers, are covered by non-compete agreements that can stifle wage growth for American workers by making it more difficult for workers to leave for higher-paying jobs. The Federal Trade Commission released a proposed rule in January 2023 to ban non-compete clauses, which it estimates will increases wages by $300 billion annually.
Lowering ocean shipping costs. Ocean carriers increased their rates by as much as 1,000% during the pandemic. Last June, Congress passed the Ocean Shipping Reform Act heeding the President’s call in the 2022 State of the Union. This legislation will cut costs for shippers, and in turn American families, and ensure fairer treatment for exports from our farmers and ranchers.
Lowering meat prices. The Administration has taken a number of steps to increase competition in the meat and poultry markets. The Department of Agriculture (USDA) has also issued proposed regulations under the Packers & Stockyards Act to increase competition and market integrity and to prevent abuse of farmers in the poultry growing system. USDA is also using $1 billion to expand independent meat processing capacity, so the market isn’t dominated by just a few big players.
Helping consumers get the right to repair. The President believes that consumers shouldn’t be restricted by big manufacturers from repairing their own equipment—whether it’s a tractor or a smartphone. After President Biden expressed strong support for the right to repair in his Competition Executive Order, Microsoft conducted a study on the issue and made its Surface devices more easily repairable and Apple announced self-service repair for certain devices.
Improving safety and accountability in nursing homes. As the President directed in last year’s State of the Union, CMS has taken action to strengthen oversight of the worst performing nursing homes, prevent abuse and Medicare fraud, and improve families’ ability to comparison shop across nursing homes. In the coming days and months, CMS will announce new actions to increase safety and accountability at nursing homes.
Reducing the Deficit by Ensuring the Wealthy and Large Corporations Pay their Fair Share
In the last two years, the Administration cut the deficit by more than $1.7 trillion—the largest deficit reduction in American history. The President believes we need to continue that progress—and reward work, not wealth.
Since coming to office, the President has signed legislation to make the wealthy and large corporations pay their fair share and provide tax cuts for working families, while reducing the deficit. Under his plan, no one making under $400,000 per year will pay more in taxes.
Billionaire Minimum Tax. President Biden is a capitalist and believes that anyone should be able to become a millionaire or a billionaire. He also believes that it is wrong for America to have a tax code that results in America’s wealthiest households paying a lower tax rate than working families. In a typical year, billionaires pay an average tax rate of just 8%. In the State of the Union, he’ll call on Congress to pass his billionaire minimum tax. This minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters.
Surcharge on corporate stock buybacks. Stock buybacks enable corporations to funnel tax-advantaged payouts to wealthy and foreign investors, instead of paying dividends that shareholders are required to pay taxes on. In addition, a number of experts have argued that CEOs—who are compensated mostly in stock—use buybacks to enrich themselves to the detriment of the long-term growth of the company. Last year, oil and gas companies made record profits and invested very little in domestic production and to keep gas prices down—instead they bought their own stock, giving all that profit to their CEOs and shareholders. President Biden signed into law a surcharge on corporate stock buyback, which reduces the differential tax treatment between buybacks and dividends and encourages businesses to invest in their growth and productivity as opposed to paying out corporate executives or funneling tax-preferred profits to foreign shareholders. In the State of the Union, the President will call for quadrupling the tax on corporate stock buybacks.
Corporate minimum tax. In 2020, 55 of the largest corporations that were profitable paid $0 in federal income tax. To end that unfairness in the tax code, President Biden signed into law a 15 percent minimum tax on the profits that large corporations—those with over $1 billion in profits—report to shareholders. This book minimum tax means that it will be harder for companies that say they’re earning a billion in profits to pay tax rates in the single digits on those profits. It also levels the playing field for companies—including small businesses—that are already paying their fair share.
Legislation to crack down on tax cheats and create a fairer tax system.Working people pay 99% of the taxes they owe on their income from wages and salaries, while the top 1 percent hides about 20% of their income from tax, including by funneling it through offshore accounts in tax havens that don’t report earnings. The President signed legislation into law that will crack down on wealthy people and large corporations that cheat on their taxes, while improving customer service for taxpayers. The legislation will not increase audit rates for families or small businesses making under $400,000 per year.
President Joe Biden will sign the Inflation Reduction Act today, a distillation of what Americans have been clamoring for, for the past 30 years. It includes the most significant investment in climate action, plus health care and tax reform while also amazingly reducing the deficit. Here’s what the Inflation Reduction Act will mean to you, by the numbers. This is from the White House:
The Inflation Reduction Act will lower costs for families, combat the climate crisis, reduce the deficit, and finally ask the largest corporations to pay their fair share. President Biden and Congressional Democrats have worked together to deliver a historic legislative achievement that defeats special interests, delivers for American families, and grows the economy from the bottom up and middle out.
Here’s how the Inflation Reduction Act impacts Americans by the numbers:
HEALTH CARE
Cutting Prescription Drug Costs
Today, Americans pay two to three times what citizens of other countries pay for prescription drugs
5-7 million Medicare beneficiaries could see their prescription drug costs go down because of the provision allowing Medicare to negotiate prescription drug costs.
50 million Americans with Medicare Part D will have the peace of mind knowing their costs at the pharmacy are capped at $2,000 per year, directly benefiting about 1.4 million beneficiaries each year.
3.3 million Medicare beneficiaries with diabetes will benefit from a guarantee that their insulin costs are capped at $35 for a month’s supply.
Lowering Health Care Costs
13 million Americans will continue to save an average of $800 per year on health insurance premiums
3 million more Americans will have health insurance than without the law.
The uninsured rate is at an all-time low of 8%, which the historic law will build on.
Defeating Special Interests
$187 million: The amount the Pharmaceutical industry has spent on lobbying in 2022.
1,600: number of lobbyists the pharmaceutical companies had in 2021 – three times the number of Members of Congress
33 years: the amount of time Congressional Democrats have been trying to lower prescription drug costs by allowing Medicare to negotiate drug prices.
19 years: number of years Medicare has been blocked from negotiating prescription drug costs
CLEAN ENERGY
Lowering Energy Costs
Families that take advantage of clean energy and electric vehicle tax credits will save more than $1,000 per year.
$14,000 in direct consumer rebates for families to buy heat pumps or other energy efficient home appliances, saving families at least $350per year.
7.5 million more families will be able install solar on their roofs with a 30% tax credit, saving families $9,000 over the life of the system or at least $300 per year.
Up to $7,500 in tax credits for new electric vehicles and $4,000 for used electric vehicles, helping families save $950per year.
Putting America on track to meet President Biden’s climate goals, which will save every family an average of $500 per year on their energy costs.
Building a Clean Energy Economy
Power homes, businesses, and communities with much more clean energy by 2030, including:
950 million solar panels
120,000 wind turbines
2,300 grid-scale battery plants
Advance cost-saving clean energy projects at rural electric cooperatives serving 42 million people.
Strengthen climate resilience and protect nearly 2 million acres of national forests.
Creating millions of good-paying jobs making clean energy in America.
Reducing Harmful Pollution
Reduce greenhouse gas emissions by about 1 gigaton in 2030, or a billion metric tons – 10 times more climate impact than any other single piece of legislation ever enacted.
Deploy clean energy and reduce particle pollution from fossil fuels to avoid up to3,900 premature deaths and up to 100,000 asthma attacks annually by 2030.
TAXES
Making the Tax Code Fairer
$0: how much some of largest, profitable corporations pay in federal income tax.
55: the number of America’s largest, wealthiest corporations that got away without paying a cent in federal income taxes in 2020.
$160 billon: how much the top 1 percent of earners is estimated to evade each year in taxes.
15%: the minimum tax on corporate profits the Inflation Reduction Act imposes on the largest, most profitable corporations.
$124 billion: savings over 10 years the Inflation Reduction Act will generate from collecting taxes already owed by wealthy people and large corporations, according to the Congressional Budget Office.
And no family making less than $400,000 will see their taxes go up a penny.
Reducing the Deficit
The Inflation Act will achieve hundreds of billions in deficit reduction.
The deficit is projected to fall by more than $1.5trillion this year after falling by more than $350 billion last year.
126 leading economists – including 7 Nobel Laureates, 2 former Treasury Secretaries, 2 former Fed Vice Chairs and 2 former CEA Chairs – have said reducing the deficit will help fight inflation and support strong, stable economic growth.
President Joe Biden reacted to the June inflation report saying that while inflation is still unacceptably high, the report is out-of-date, failing to take into account that gas prices – which accounts for a significant amount of the inflation rate – have gone down for nearly 30 days, reducing the price at the pump by 40 cents since mid-June. Still, he said, “inflation is our most pressing economic challenge,” just as it is around the world. Here is his statement the June CPI Inflation report as provided by the White House:
While today’s headline inflation reading is unacceptably high, it is also out-of-date. Energy alone comprised nearly half of the monthly increase in inflation. Today’s data does not reflect the full impact of nearly 30 days of decreases in gas prices, that have reduced the price at the pump by about 40 cents since mid-June. Those savings are providing important breathing room for American families. And, other commodities like wheat have fallen sharply since this report.
Importantly, today’s report shows that what economists call annual “core inflation” came down for the third month in a row, and is the first month since last year where the annual “core” inflation rate is below six percent. Inflation is our most pressing economic challenge. It is hitting almost every country in the world. It is little comfort to Americans to know that inflation is also high in Europe, and higher in many countries there than in America. But it is a reminder that all major economies are battling this COVID-related challenge, made worse by Putin’s unconscionable aggression.
Tackling inflation is my top priority – we need to make more progress, more quickly, in getting price increases under control. Here is what I will do:
First, I will continue to do everything I can to bring down the price of gas. I will continue my historic release of oil from our strategic petroleum reserve. I will continue working with our European allies to put a price cap on Russian oil – sapping Putin of oil revenue. And, I will continue to work with the U.S. oil and gas industry to increase production responsibly — already, the U.S. is producing 12.1 million barrels of oil per day and is on track to break records.
But I will also continue to insist – as I have with urgency recently – that reductions in the price of oil must produce lower gas prices for consumers at the pump. The price of oil is down about 20% since mid-June, but the price of gas has so far only fallen half as much. Oil and gas companies must not use this moment as an excuse for profiting by not passing along savings at the pump.
Second, I will urge Congress to act, this month, on legislation to reduce the cost of everyday expenses that are hitting American families, from prescription drugs to utility bills to health insurance premiums and to make more in America.
Third, I will continue to oppose any efforts by Republicans – as they have proposed during this campaign year — to make things worse by raising taxes on working people, or putting Social Security and Medicare on the chopping block every five years.
Finally, I will continue to give the Federal Reserve the room it needs to help it combat inflation.
The White House has published a memo outlining President Biden’s plan to tackle inflation:
As our economy begins to transition to more stable growth, President Biden has made combatting inflation and lowering costs for families his top economic priority. President Biden’s plan to tackle inflation has three key pillars:
1. Reducing costs on everyday items
2. Lowering the deficit
3. Giving the Federal Reserve the independence it needs to act
The biggest single driver of inflation now is Putin’s war against Ukraine –increases in food and energy prices account for around 50% of this month’s CPI. Putin’s Price Hike hit hard in May: gas pump prices are up by $2 a gallon in many places since Russian troops began to threaten Ukraine. President Biden has taken action to blunt the impact of Putin’s Price Hike for families:
The President announced the release of a record 1 million barrels per day from our Strategic Petroleum Reserve.
He rallied our Allies and partners to join us, releasing a combined 240 million additional barrels of oil on the market.
He expanded access to biofuels like E15, which will lower prices at thousands of gas stations in the across the country.
While oil production is increasing and projected to reach a historic level next year, oil companies are sitting on 9,000 unused permits to drill more and pocketing the largest profits in years.
80% of a typical family’s monthly budget is spent on items other than food and energy. That means that even as we work to address energy and food prices in the near-term, making other necessities more affordable for working families can give families more breathing room at the end of the month.
President Biden announced that tens of millions of households – or nearly 40% of all households in America – will be able to save $50 per month or more on high-speed internet, which is now an economic necessity for American families.
President Biden took action to save hundreds of thousands of families hundreds of dollars a month by fixing the Affordable Care Act’s “family glitch.” Nearly 1 million Americans would see their coverage become more affordable.
President Biden has cut the deficit by $1.7 trillion – more this year than any President in history, reducing inflationary pressures.
The President calls on Congress to act urgently as well.
The President has called on Congress to pass a bill to crack down on ocean shippers to lower the price of goods. In the last year, shipping prices have gone up by as much as 1,000% driving higher prices for families on items from appliances to apparel.
The President calls on Congress to pass legislation to cut costs for families like energy bills and prescription drugs. According to an independent analysis, the clean energy tax credits and investments the President has proposed would save families $500 per year on their energy costs by 2030, and transition our economy away from relying on energy produced by autocrats like Putin. And the President believes that Congress should give Medicare the power to negotiate with pharmaceutical companies, and that Congress should cap the cost of insulin at $35 per month. These reforms wouldn’t just lower costs for consumers; they would also reduce federal spending.
Congress could lower the deficit even more by asking the super wealthy and profitable corporations to pay their fair share. According to an outside analysis, 55 companies paid no money in taxes last year. It’s wrong for the super wealthy and profitable corporations to pay a lower tax rate than a teacher or firefighter.
Congressional Republicans’ only plan to tackle inflation increases taxes for working families. And, their attacks on gas prices are incoherent and dishonest.
Senator Rick Scott, a member of Senate Republican Leadership changed his words on his agenda to raise taxes on millions of working and middle class Americans by $1,500, but still said “We need them pulling the wagon and paying taxes” and that he “apologizes to absolutely nobody.” He also stood by his Congressional Republican plan to put Social Security and Medicare on the chopping block every 5 years.
Congressional Republicans blame President Biden for gas prices, but the truth is that gas pump prices are up by $2 a gallon in many places since Russian troops began to threaten Ukraine. This is Putin’s price hike. A majority of Republicans in Congress support Ukraine in their fight for their democracy and our alliance to strengthen theirposition, and now cynically blame the President for Putin’s actions that have raised prices around the world. That’s not economics, that’s politics.
Congressional Republicans blame the administration for decreased oil production. The truth is oil production is projected to reach a historic level next year. When oil companies produce less, the cost goes up. In 2020, Americans stayed home more and drove less, so oil companies cut back on oil production and refining. Now, demand has returned, but oil production is still 10% below where it was pre-pandemic. Oil companies are sitting on 9,000 unused permits to drill more and pocketing the largest profits in years. The President has called for — and Congressional Democrats have voted for — a “use it or lose it” policy for permits on federal lands, and Congressional Republicans opposed it.
The five biggest oil companies made $35 billion in the first quarter of this year—that’s four times what they made in the same quarter last year. Congressional Republicans oppose making these companies pay their fair share in taxes.
The White House released new state-by-state fact sheets that highlight several economic indicators —including state employment, unemployment insurance claims, gross domestic product, supplemental poverty, and vaccination rates—which demonstrate the robust economic progress under President Biden’s leadership. This wasn’t by accident. This is the result of President Biden’s plan to build the economy from the bottom up and the middle out.
When President Biden took office, our economy was in crisis and COVID-19 was wreaking havoc on our country. Thanks to his American Rescue Plan, unemployment is near historic lows, the vast majority of Americans are vaccinated, the number of adults with a positive outlook on their overall financial well-being reached an all-time high last year, the number of Americans relying on government unemployment benefits has dropped by more than 90%, and new businesses are being created at record rates.
The fact sheets highlight our historic economic recovery strong foundation to transition to stable and steady growth that works for working families. Fact sheets for all 50 states are linked below.
This memo, highlighting five key points of America’s transition to sustainable growth, the role the American Rescue Plan played in that growth, and how the Administration is turning its focus to address a range of global economic challenges with inflation chief among them, was provided by the White House:
Earlier this week, the President noted that our economy is in a moment of transition: from what has been an historic economic recovery to what can be a period of stable, steady growth that works for working families. The President understands that Americans are dealing with the challenge of elevated inflation. And addressing inflation is his top economic priority.
This is a moment when we can build on the unique strengths of our recovery to bring down inflation and ensure that we don’t give up the historic economic gains of the last year. It also means building on the recovery to deliver growth that actually works for working families – unlike the growth that we saw too often in the years before the pandemic, when we were promised that gains for those at the top would trickle down to working families. President Biden’s approach is to build the economy from the bottom up and the middle out.
As we look ahead and aim to achieve stable, steady growth, here are five key points about how we arrived at our current economic moment. In short, the Administration passed the American Rescue Plan in a moment of significant economic uncertainty and, because of the Administration’s decisive action, we now face a range of global economic challenges – with inflation chief among them – from a position of strength.
The American Rescue Plan helped deliver one of the strongest job markets in American history.
When President Biden took office, the unemployment rate was 6.4% and around 20 million Americans were on unemployment insurance. Since then, the unemployment rate has come down to 3.6 % — with only three times in the last 50 years when the rate has been lower – and fewer than 1.5 million Americans are receiving unemployment insurance. Before the Rescue Plan passed, the nonpartisan Congressional Budget Office (CBO) projected the unemployment rate would be 5% right now, and would not drop below 4% until 2026. In addition, the number of Americans between the ages of 25 and 54 who are working or looking for work is higher today than it was before the pandemic began. In the wake of the Great Recession, that recovery took 12 years. As the Washington Post noted this weekend, we are in the midst of a “great return to work.” While it “took more than six years to recover from the Great Recession … this jobs recovery is on track to take about 2.5 years. That’s worth celebrating.”
The American Rescue Plan has meant the U.S. recovery has been the envy of the world.
According to the latest World Economic Outlook from the International Monetary Fund, the U.S. economy will be larger at the end of this year—relative to its pre-pandemic size—than any other Group of 7 economy. The U.S. economy may grow faster this year than China’s economy for the first time since 1976, according to a projection by Bloomberg Economics. CBO recently projected that U.S. economic growth would continue in 2022 and 2023, albeit at a slower rate than in 2021, with unemployment remaining low and inflation falling throughout this year and next. The CBO forecast was roughly in line with the consensus of private sector forecasters.
The American Rescue Plan has meant economic security for millions of families.
Since President Biden took office, incomes are up 5.1% overall and by 11.9% for the bottom 50% of the income distribution – even after accounting for inflation – due to job creation and higher earnings. Self-reported financial well-being at the end of 2021 reached its highest level on record, with 78% of adults reporting that they are financially comfortable. In the same survey, 68% of Americans said they could cover a $400 emergency cash expenses – the highest level in the history of the survey and up 18 percentage points since 2013. Bankruptcy filings also remained below pre-pandemic levels, eviction filings have remained 30% below pre-pandemic levels across the eight months since the eviction moratorium ended, and foreclosures hit an all-time low in 2021.
The Rescue Plan didn’t just improve our economic position; it improved our fiscal position too.
The CBO projected that the deficit will fall by $1.7 trillion this year. This is the largest nominal reduction in the federal deficit in history. According to their projections, the deficit as a share of the economy this year will be at a lower level than in 2019, before the pandemic. It is also a lower level than CBO projected for this year before the American Rescue Plan passed, showing that the strong economic recovery resulting from President Biden’s economic and vaccination plans were not just good for our economy but also for our fiscal position. Public debt as a percent of the economy is also projected to be lower this year than was projected before the Rescue Plan passed – further reflecting the degree to which our strong economic recovery has improved our fiscal position. This progress on deficits and debt was not pre-ordained. In addition to responsibly winding down emergency programs, around half of the reduction in the deficit this year is projected to be driven by an increase in revenues, as household and business earnings have increased given the strong economic recovery.
Inflation is a global challenge, with many causes, but the Rescue Plan is not its predominant cause.
Inflation is elevated around the world, particularly in light of Putin’s invasion into Ukraine, which has driven global food and energy prices higher. Inflation is at its highest level on record in the Euro Area and in Germany, the highest level in 40 years in the U.K., and the highest level in more than 30 years in Canada. Consumer prices have risen by 8.2% in the United States in the last year, 8.1% in the Euro Area, and 9% in the United Kingdom.
Putin’s actions in Ukraine have driven inflation higher in recent months, with gas prices up $1.51 since Putin began amassing troops on the border of Ukraine. It is of course not plausible that disruptions in global energy and food markets are the result of the American Rescue Plan.
And even before disruptions to global energy and food markets have driven inflation higher, many other factors boosted demand, shifted its composition, and constrained supply, which led to higher prices. The pandemic meant that American consumers shifted their consumption from services to durable goods. Businesses were unprepared for demand returning quickly, and we saw an inward shift in supply capacity – from auto production to domestic energy production to rental cars. And supply chain pressures meant bottlenecks and thinner inventories that also drove up prices.
That’s why we know that even without the Rescue Plan – or with a smaller Rescue Plan – inflation would have still been elevated. In fact, according to one independent analysis, keeping inflation close to 2% would have required an unemployment rate in the double digits – instead of today’s 3.6% unemployment rate. Moreover, without the Rescue Plan, another independent analysis shows that we would have had less growth, less job creation, and more human suffering.
The Biden Administration is justifiably touting a $1.3 trillion decrease in the budget deficit – the largest one-year decline in U.S. history – to demonstrate the success of its fiscal policies, and particularly, its success in getting control of the coronavirus pandemic and justifying its FY2023 budget proposal. Here’s a statement from the White House:
When the President took office, the pandemic was raging in communities across the country and our economy was struggling to recover from the most severe downturn since the Great Depression. The economy shrunk, and the unemployment rate stood at 6.4 percent. And, the deficit had risen to $3.1 trillion in 2020—yet with trillions in resources, the Trump Administration didn’t secure vaccines for all Americans, most schools were closed, and testing and medical equipment shortages continued.
Even before the pandemic, the Trump tax cuts had added $2 trillion to deficits over a decade. The deficit increased every year of the previous administration.
Unlike his predecessor, President Biden prioritized fiscal responsibility. In the face of the extraordinary challenges he inherited, the President made clear that bold action was needed to jumpstart the economic recovery. He knew that robust investment to change the course of the pandemic and support workers, families, and small businesses was not only the right strategy to build a stronger economy, but also to decrease the deficit. A strong economic recovery would result in less emergency spending and drive future deficits down. In March 2021, he signed into law the historic American Rescue Plan.
The President’s Budget shows that this strategy paid off. The strongest economic growth in four decades, powered by the American Rescue Plan, has also contributed to a historic decline in the deficit—by fueling strong revenue growth and allowing the Administration to responsibly phase down emergency pandemic-related spending. The President’s Budget projects that the deficit in 2022 will be more than $1.3 trillion lower than last year’s—the largest ever one-year decline in our country’s history. It will be less than half of the 2020 deficit the President inherited.
The President is now working to build on that progress and further reduce the deficit by reforming the tax system so that corporations and the wealthiest Americans pay their fair share. As the Budget shows, with these reforms, we can cut costs for families, continue growing the economy from the bottom up and middle out, and put America on a sound fiscal course for the future—shrinking the deficit the President inherited by two-thirds as a share of the economy.
President Biden’s Strategy to Combat the Pandemic and Jumpstart the Economy is Driving Down Deficits
Thanks to the American Rescue Plan and the President’s strategy to control the pandemic, in 2021 our economy grew at 5.7 percent, the fastest rate in nearly 40 years. We created more than 6.5 million jobs, the most our country has ever recorded in a single year. The unemployment rate has dropped to 3.8 percent, lower than the Congressional Budget Office had projected in its pre-American Rescue Plan baseline at any point over the next decade. And between the start and the end of 2021, we went from about 41,000 to more than 200 million Americans vaccinated, and from most schools closed to 99 percent of schools are open for in-person learning.
The Administration’s economic success and success in controlling the pandemic is lowering the deficit in two ways.
First, because of the historic pace of our economic and labor market recovery, the economy no longer needs the kind of emergency support it received last year. With businesses open and people back at work, the Federal Government will spend about $1 trillion less on pandemic and economic support in 2022 than in 2021. That includes hundreds of billions of dollars less support to businesses, which are now making investments and creating jobs without the need for help. Likewise, after historic drops in both the overall unemployment rate and the long-term unemployment rate—the share of people out of work for more than six months—we no longer need emergency unemployment assistance, and ongoing Unemployment Insurance claims are at their lowest level since 1970.
Second, a stronger economy means higher incomes for households and higher earnings for businesses. Because of this economic progress, the government is projected to collect more than $300 billion in additional revenues compared to last year, a nearly 10 percent increase.
The President’s Budget Continues to Lower Deficits
Even before the pandemic, the Trump Administration added $2 trillion to deficits over 10 years through tax cuts that largely helped wealthy people and large corporations. President Biden believes in a different approach: growing the economy from the middle out, not the top down, and paying for all new investments by ensuring that the wealthiest Americans and large corporations pay their fair share.
As he made clear in his State of the Union address, the President is committed to working with Congress to enact legislation that lowers costs for American families, expands the productive capacity of the American economy, and further reduces the deficit: by reducing prescription drug costs and fixing the tax code to ensure corporations and wealthy people pay the taxes they already owe and close loopholes they exploit.
The President’s FY 2023 Budget also proposes additional smart, targeted investments designed to spur durable economic growth, create jobs, reduce cost pressures, and foster shared prosperity—while more than fully offsetting their cost. The Budget reduces deficits by more than $1 trillion over the next 10 years.
Under the Budget policies, deficits as a share of the economy would fall to less than one-third of the 2020 level the President inherited. Overall, the Budget details an economically and fiscally responsible path forward—addressing the long-term fiscal challenges facing our country while making investments that will produce stronger economic growth and broadly shared prosperity for generations to come.
