President Biden Releases FY 2022 Budget Outline

On Friday, May 28, President Joe Biden released his budget proposal for fiscal year (FY) 2022. The outline, which Congress will use as the basis for creating its own budget resolution, called for $6 trillion in federal spending for the fiscal year that begins October 1, 2021 and for increasing annual spending to $8.2 trillion by FY 2031.

If enacted, the plan would raise government spending to nearly 25 percent of the total economy, its highest level since World War II when government spending as a total share of gross domestic product was 40 percent. The increase in spending, which would create annual deficits of more than $1.3 trillion over the next decade, is driven by infrastructure spending and an expansion of social spending.

Specifically, the outline includes:

• $2.3 trillion for infrastructure, including $115 billion for roads and bridges, $174 billion for electric vehicles, $85 billion to modernize transit, $111 billion for drinking water infrastructure, and $100 billion to expand high-speed broadband access;
• $200 billion to provide for universal free pre-kindergarten;
• $109 billion to provide free community college; and
• $225 billion for a national paid family medical leave program.

The outline also called for slight increases in defense spending. Read the White House fact sheet here. Read the full budget outline here.

President Biden would pay for the new spending by raising the corporate tax rate to 28 percent from 21 percent, reducing tax credits for fossil fuel energy development, closing $64 billion in tax loopholes, raising $800 billion by improving compliance with tax laws, increasing the capital gains tax rate, and raising the top personal income tax rate from 37 percent to 39.6 percent.

Read more about the president’s tax proposals here and here.

The U.S. business community largely opposes these tax hikes. If you would like to make your voice heard on this issue, click here to use the U.S. Chamber of Commerce’s advocacy tool to send a letter to your member of Congress asking that they oppose the tax increases. Learn more about the U.S. corporate tax system here.

The U.S. Senate is likely to take up its FY 2022 budget resolution in mid-June, Majority Leader Chuck Schumer (D-N.Y.) has said. The U.S. House also will write its outline this month.