President Joe Biden intends to propose a spending plan for the 2023 budget year that would cut projected deficits by more than US$1 trillion over the next decade and propose a minimum tax on billionaires, according to a fact sheet released on Saturday by the White House budget office. In his proposal expected on Monday, the lower deficits reflect the economy’s resurgence as the United States emerges from the pandemic, as well as likely tax law changes that would raise more than enough revenue to offset additional investments planned by the Biden administration. It’s a sign that the government’s balance sheet will improve after a historic burst of spending to combat the coronavirus pandemic. Biden’s “Billionaire Minimum Income Tax” would set a 20 per cent minimum tax rate on households worth more than US$100 million, in a plan that would mostly target the United States’ more than 700 billionaires, according to the White House fact sheet. The plan would require such households to pay the minimum tax of 20 per cent on all of their income including unrealised investment income that is now untaxed, the fact sheet said. The tax will help reduce the budget deficit by about US$360 billion in the next decade, the fact sheet added. The fading of the pandemic and the growth has enabled the deficit to fall from US$3.1 trillion in fiscal 2020 to US$2.8 trillion last year and a projected US$1.4 trillion this year. That deficit spending paid off in the form of the economy expanding at a 5.7 per cent pace last year, the strongest growth since 1984. But inflation at a 40-year high also accompanied those robust gains as high prices have weighed on Biden’s popularity. Biden condemns Putin, saying ‘he cannot remain in power’ For the Biden administration, the proposal for the budget year that begins on October 1 shows that the burst of spending helped to fuel growth and put government finances in a more stable place for years to come as a result. One White House official, insisting on anonymity because the budget has yet to be released, said the proposal shows that Democrats can deliver on what Republicans have promised before without much success: faster growth and falling deficits. But Republican politicians have said that the Biden administration’s spending has led to greater economic pain in the form of higher prices. The inflation that came with reopening the US economy as the closures from the pandemic began to end has been amplified by supply chain issues, low interest rates and, now, disruptions in the oil and natural gas markets because of Russia’s invasion of Ukraine. Senate Republican leader Mitch McConnell pinned the blame solely on Biden’s coronavirus relief as well as his push to move away from fossil fuels. “Washington Democrats’ response to these hardships has been as misguided as the war on American energy and runaway spending that helped create them,” McConnell said last week. “The Biden administration seems to be willing to try anything but walking back their own disastrous economic policies.” Biden condemns Putin, saying ‘he cannot remain in power’ Biden inherited from the Trump administration a budget deficit that was equal in size to 14.9 per cent of the entire US economy. But the deficit starting in the upcoming budget year will be below 5 per cent of the economy, putting the country on a more sustainable path, according to people familiar with the budget proposal who insisted on anonymity to discuss forthcoming details. The planned deficit reduction is relative to current law, which assumes that some of the 2017 tax cuts signed into law by former President Donald Trump will expire after 2025. The lower deficit totals will also be easier to manage even if interest rates rise. Still, Biden’s is offering a blueprint for spending and taxes that will eventually be decided by Congress and could vary from the president’s intentions. The expected deficit decrease for fiscal 2022 reflects the solid recovery in hiring that occurred in large part because of Biden’s US$1.9 trillion coronavirus relief package. The added jobs mean additional tax revenue, with the government likely collecting US$300 billion more in revenues compared to fiscal 2021, a 10 per cent increase. Still, the country will face several uncertainties that could reshape Biden’s proposed budget, which will have figures that do not include the spending omnibus recently signed into law. Biden and US allies are also providing aid to Ukrainians who are fighting against Russian forces, a war that could possibly reshape spending priorities and the broader economic outlook.