President Biden Proposes Ambitious FY2022 Federal Budget

On May 28, President Joe Biden released his Administration’s proposed federal budget for the 2022 fiscal year. This budget calls for $6 trillion in spending, the highest amount ever requested by a President (35% higher than President Trump’s requested $4.4 trillion in 2019). 

The largest increases in funding proposed by the Biden Administration’s budget would come from the White House’s proposed $2.3 trillion American Jobs Plan and $1.8 trillion American Families Plan, respectively the Administration’s infrastructure and education proposals.

The American Jobs Plan would direct spending toward traditional infrastructure like ports, waterways, roads and bridges, which has bipartisan support. However, it also directs higher spending to other projects, like electric vehicle charging stations, Amtrak, and increasing funding for caregivers. Republicans have criticized these provisions saying that they should not be labeled as “infrastructure.” Republicans have also raised concerns about the price tag of the bill, and the increase in taxes that would pay for the proposal. They have also expressed similar concerns about the American Families Plan, which provides funding toward universal pre-school as well as K-12 education and free community college tuition.

In addition to the American Jobs Plan and American Families Plan, Biden’s budget also calls for significant increases in spending by most federal agencies. According to the budget proposal, the agencies that would receive the largest increases in funding in the 2022 fiscal year are the following:

•  A 40.8% increase for the Department of Education
• A 29.4% increase for the Department of Commerce
• A 23.4% increase for the Department of Health and Human Services
• A 21.6% increase for the Environmental Protection Agency
• A 19.8% increase for the National Science Foundation

In addition, the Departments of Agriculture (+16.7%), Energy (+10.4%), Housing and Urban Development (+15.2%), Interior (+16.7%), Labor (+14%), State (+11%), Transportation (+14.8%), and Treasury (+11.3%) would all see increases of more than 10%. Notably, Department of Defense (+1.6%) and Homeland Security (+0.1%) spending increases are much smaller than the other agencies and are expected to be below inflation, meaning that in real terms, the proposed budget would see decreases in defense and homeland security spending. Supporters of the increases say that they are trying to catch up with the decreases in spending imposed during the Trump Administration. However, the reality is that most of the proposal goes far beyond the Trump cuts, which were never as big as both the Trump Administration and Congressional Democrats claimed them to be.

To put the $6 trillion figure in perspective, in the last full fiscal year (2019) before the COVID-19 pandemic, the federal budget stood at $4.4 trillion. Though spending rose to $6.5 trillion and $7.2 trillion in the 2020 and 2021 fiscal years respectively, those increases were attributed to emergency spending necessary to keep the economy afloat during the pandemic. President Biden’s budget would have federal outlays gradually increase from $6 trillion in 2022 to $8.2 trillion in 2031, a near 37% increase in nominal terms over that period.