Biden Proposes Social Safety Net Compromise Halving Budget Ahead of Europe Tour

President Joe Biden of the United States [Photo by EPA Yonhap News]

[Asia Economy Reporter Park Byung-hee] On the 28th (local time), U.S. President Joe Biden proposed a new plan to reduce the existing $3.5 trillion (approximately 4,096 trillion KRW) social safety net budget to half, $1.75 trillion, urging Congress to quickly pass the bill. President Biden is expected to use the bill as a pretext to urge other countries to respond to climate change at the upcoming G20 summit in Rome, Italy, starting on the 30th, and the 26th UN Climate Change Conference of the Parties (COP26) in Glasgow, UK. President Biden, who departed for Italy that day, had been urging the passage of the budget before his departure.

In a national address that day, President Biden said, "After months of tough negotiations, we have established a historic economic framework," adding, "This will create millions of jobs, grow the economy, and lead us to victory in competition with major countries around the world, including China, on climate change."

The new budget plan completely cancels some items such as paid family leave and free community college education and significantly reduces the healthcare budget. However, the $555 billion funding for climate change was maintained, and the child allowance, which was increased after the COVID-19 pandemic, was extended for one year.

Regarding the expansion of elderly healthcare, $35 billion over ten years was included to assist with hearing aids, but dental and ophthalmic care were excluded.

The Democratic Party has faced difficulties in passing Biden's core infrastructure budget due to opposition from some moderate lawmakers.

In his speech, President Biden emphasized the necessity of the proposal, saying, "No one, including myself, can have everything they want. That is compromise," and "I have long said that in democracy, only consensus can achieve important things."

He particularly pointed out, "We were able to lead the world because we invested in our people in the 20th century," but "At some point, we stopped investing in people. The U.S. economy is still the largest in the world, but we are losing competitiveness in Asia." He continued, "We led the world in educational achievement, but in terms of investment in children's education among the 37 major countries in the OECD, the U.S. ranks only 35th," warning, "If this decline continues, we cannot secure competitiveness in the 21st-century global economy."

He also said, "This is not a matter of left or right, centrist or progressive. This is a matter of competitiveness and complacency, and the issue of global leadership."

Regarding the still-controversial corporate tax increase, he said, "I don't want to punish anyone for being successful," and "What I am asking is to pay your fair share," referring to tax fairness. President Biden added, "The 55 most profitable companies in the U.S. did not pay a single cent in income tax," emphasizing, "It's a simple issue. If you make a profit, you have to pay taxes."