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Democrats’ Dream of a Wealth Tax Is Alive. For Now.

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A narrow Supreme Court ruling left the door open for Congress to expand taxes on billionaires, but it’s not a guarantee.For years, liberal Democrats have agitated for the United States to tax wealth, not just income, as a way to ensure that rich Americans who derive wealth from real estate, stocks, bonds and other assets were paying more in taxes.On Thursday, that dream survived a Supreme Court scare, but just barely.Thanks to a narrow court ruling, a raft of plans to use the tax code to address the gaping divide between the very richest Americans and everyone else appear set to live for years to come in the campaign proposals and official budgets of top Democrats.The idea of a wealth tax was not directly before the court on Thursday. Justices were considering the constitutionality of a new tax imposed under former President Donald J. Trump that applies to certain income earned by businesses overseas. But in taking the case, the court could have pre-emptively ruled federal wealth taxation unconstitutional.It did not, and liberal groups celebrated the victory.“The Supreme Court also could have taken an activist turn of the worst kind by pre-emptively ruling federal wealth taxes unconstitutional today,” Amy Hanauer, the executive director of the Institute on Taxation and Economic Policy, which supports higher taxes on corporations and the wealthy, said in a statement. “To its credit, the court did not do so.”But the case also offered a window into the legal fight to come over various iterations of a wealth tax should Congress ever adopt one. It showed a solid four justices firmly opposed to such a tax — and two more who appeared skeptical.“This is a narrow decision,” Joe Bishop-Henchman, the vice president of the National Taxpayers Union, which opposes wealth tax proposals, said in a statement on Thursday. But, he added, “the court makes clear it is not opening the door to a wealth tax.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Biden Budget Lays Out Battle Lines Against Trump

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    President Biden and former President Donald J. Trump offer vastly different policy paths on almost every aspect of the economy.President Biden in his budget this week staked out major economic battle lines with former President Donald J. Trump, the presumptive Republican presidential nominee. The proposal offers the nation a glimpse of the diverging directions that retirement programs, taxes, trade and energy policy could take depending on the outcome of the November election.During the past three years, Mr. Biden has enacted key pieces of legislation aimed at bolstering the green energy economy, making infrastructure investments and reinforcing America’s domestic supply chain with subsidies for microchips, solar technology and electric vehicles. Few of those priorities are shared by Mr. Trump, who has pledged to cut more taxes and erect new trade barriers if re-elected.The inflection point will be arriving as the economy enters the final stretch of what economists are now expecting to be a “soft landing” after two years of high inflation. However, the prospect of a second Trump administration has injected increased uncertainty into the economic outlook, as companies and policymakers around the world brace for what could be a dramatic shift in the economic stewardship of the United States.Here are some of the most striking differences in the economic policies of the two presidential candidates.Sparring over the social safety netAt first glance, Mr. Biden and Mr. Trump might appear to have similar positions on the nation’s social safety net programs. In 2016, Mr. Trump broke with his fellow Republicans and refused to support cuts to Social Security or Medicare. Mr. Biden has long insisted that the programs should be protected and has hammered Republicans who have suggested cutting or scaling back the programs.In his budget proposal on Monday, Mr. Biden reiterated his commitment to preserving the nation’s entitlement system. He called for new efforts to improve the solvency of Social Security and Medicare, including making wealthy Americans pay more into the health program. However, his plans were light on details regarding how to ensure both programs’ long-term sustainability.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    The Farmers Had What the Billionaires Wanted

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    In Solano County, Calif., a who’s who of tech money is trying to build a city from the ground up. But some of the locals whose families have been there for generations don’t want to sell the land.When Jan Sramek walked into the American Legion post in Rio Vista, Calif., for a town-hall meeting last month, everyone in the room knew that he was really just there to get yelled at.For six years a mysterious company called Flannery Associates, which Mr. Sramek controlled, had upended the town of 10,000 by spending hundreds of millions of dollars trying to buy every farm in the area. Flannery made multimillionaires out of some owners and sparked feuds among others. It sued a group of holdouts who had refused its above-market offers, on the grounds that they were colluding for more.The company was Rio Vista’s main source of gossip, yet until a few weeks before the meeting no one in the room had heard of Mr. Sramek or knew what Flannery was up to. Residents worried it could be a front for foreign spies looking to surveil a nearby Air Force base. One theory held the company was acquiring land for a new Disneyland.Now the truth was standing in front of them. And somehow it was weirder than the rumors.The truth was that Mr. Sramek wanted to build a city from the ground up, in an agricultural region whose defining feature was how little it had changed. The idea would have been treated as a joke if it weren’t backed by a group of Silicon Valley billionaires who included Michael Moritz, the venture capitalist; Reid Hoffman, the investor and co-founder of LinkedIn; and Laurene Powell Jobs, the founder of the Emerson Collective and the widow of the Apple co-founder Steve Jobs. They and others from the technology world had spent some $900 million on farmland in a demonstration of their dead seriousness about Mr. Sramek’s vision.Rio Vista, part of Solano County, is technically within the San Francisco Bay Area, but its bait shops and tractor suppliers and Main Street lined with American flags can feel a state away. Mr. Sramek’s plan was billed as a salve for San Francisco’s urban housing problems. But paving over ranches to build a city of 400,000 wasn’t the sort of idea you’d expect a group of farmers to be enthused about.As the TV cameras anticipated, a group of protesters had gathered in the parking lot to shake signs near pickup trucks. Inside, a crowd in jeans and boots sat in chairs, looking skeptical.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

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    Want to Spur Green Energy in Wyoming? Aim for the Billionaires.

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    If the area around Jackson, Wyo., boasts two things, they’re natural resources and very rich locals. Nathan Wendt is trying to use the Biden administration’s clean energy incentives to bring the two together.Mr. Wendt, the president of the Jackson Hole Center for Global Affairs, has spent years working on issues related to climate change and local economic development. And as President Biden pushed one climate-related policy after another through Congress — first the infrastructure law, and then the Inflation Reduction Act — and a dizzying array of tax credits, loans and grants became available, he sensed an opportunity.“For Jackson Hole investors looking for the next big thing, there’s no need to look beyond state lines,” Mr. Wendt wrote this spring in an opinion essay in The Jackson Hole News & Guide, where he extolled the “flush tax credits” the law provided. “This decade’s great money-making opportunity,” he wrote, “will be in investing in net zero projects in energy communities, including in Wyoming.”Wyoming is both the nation’s largest coal producer and a Republican stronghold where the clean energy transition has at times faced stark opposition. Its entire congressional delegation voted against the Inflation Reduction Act. But the state is unusually well suited to benefit from some of the green incentives the government is offering.Wyoming’s geology and legal landscape make it a top candidate for fledgling carbon capture technologies, which the law promotes through sweetened and extended tax credits. Its existing pipeline infrastructure and energy industry work force could help with hydrogen development. And, perhaps most important, the state has plenty of people whom the Inflation Reduction Act is courting — well-heeled investors who are looking for a way to turn a profit off the green energy transition.Nathan Wendt is hoping that Wyoming’s combination of wealthy residents, a work force primed for energy industries and local resources could make the state a magnet for clean energy investment.Ryan Dorgan for The New York TimesThe Biden administration’s climate law works by attracting private capital to clean energy. While the plan includes targeted grants, many of its potentially most significant provisions aim to transition the nation’s energy supply — and its energy work force — by luring people with capital to invest. Tax breaks and other incentives mean it’s more attractive to make financial bets on risky, but possibly transformational, green technologies.That has Mr. Wendt and other climate researchers across the state looking at Jackson, a town full of potential investors who could pour money into new projects. The elite enclave nestled next to Grand Teton National Park boasts the highest-income county in the United States by some measures. And, Mr. Wendt reasons, many of its millionaires and billionaires work in financial markets but decamped from big coastal cities because they loved the natural beauty that Wyoming has to offer.They might, he figures, have both the money and the motivation to make local climate investment a reality.“Teton County has been historically disconnected from the wider Wyoming economic story,” Mr. Wendt said on a late August morning in Jackson’s town square, a few yards away from an arch made of elk antlers and a few hundred yards away from a number of wealth management offices. “We’re trying to bridge that gap.”Mr. Wendt said, “Teton County has been historically disconnected from the wider Wyoming economic story.”Ryan Dorgan for The New York TimesThe town of roughly 10,000 is the only municipality in Teton County, which boasts the highest per capita income of any county in the United States.Ryan Dorgan for The New York TimesLocal climate activists see Jackson as a place that could help bankroll local clean energy development.Ryan Dorgan for The New York TimesIt’s not just Mr. Wendt who has sensed a profit opportunity. Investors and companies across the country have taken notice. Just since August, about 150 corporations have talked about the Inflation Reduction Act during investor presentations, based on Bloomberg transcripts.In fact, interest has exceeded expectations. The Congressional Budget Office had at one point forecast that energy and climate outlays tied to the law would total about $391 billion from 2022 to 2031, with more than 60 percent of that coming from claims for various tax credits.But Goldman Sachs analysts have estimated that the total could be three times that amount, as people and businesses make much heavier use of the incentives than the government expected. That could mean that some $3 billion pours into green energy investment over the coming decade — $1.2 trillion from the government in the form of tax credits and other incentives, matched by even more in capital from private companies. While their estimates are on the high side, other research groups and the government itself have revised their forecasts upward.Wyoming, for its part, could be well placed to take advantage of some of the law’s more cutting-edge provisions. Some estimates have suggested that the state could see the largest per capita investment related to the legislation of any state in the nation.The opportunities are linked to both local policies and local resources, said Scott Quillinan, the senior director of research for the School of Energy Resources at the University of Wyoming.For instance, the law incentivizes hydrogen development with a new tax credit, making it a much cheaper potential fuel. Wyoming already has pipeline and rail networks that could help transport hydrogen mixtures, Mr. Quillinan said.The law also expanded a tax credit for what is known as direct carbon sequestration, the process of removing carbon from the air and storing it underground or turning it into new products. Wyoming is home to spongelike rocks filled with pockets of saltwater, which are ideal for storing captured carbon. It is also easier to get the necessary permits to set up such projects in Wyoming than in many other states.And while it used to be difficult to make cost-intensive direct capture projects pencil out, the law changed that, increasing the credit for directly captured carbon stored in saline rock formations to $180 per ton from $50.“The incentives finally make these investments profitable,” said Michele Della Vigna, a researcher at Goldman.Environmentalists sometimes question both hydrogen and direct carbon capture technologies, in part because they’re relatively untested. But since the law’s passage last year, announcements of carbon capture projects — including a large one in Wyoming — have spiked.Project Bison, a carbon capture facility under development by the firm CarbonCapture, is set to be the biggest project of its kind, and big names like BCG and Microsoft have signed on for its carbon removal credits.Jonas Lee, CarbonCapture’s chief commercial officer, said that, without the law, the project would most likely have been smaller and slower moving. Even with the law’s help, its planned opening this year has been delayed. Mr. Lee did not provide a reason or a new opening date, but said the firm still expected to operate at scale. Rusty Bell, the director of the Office of Economic Transformation at the Gillette College Foundation in Wyoming, thinks the administration’s climate push is destined for such hiccups. New technologies take time to roll out. The maze of incentives and grants on offer can be difficult to navigate.But Mr. Bell, who wrote the opinion essay with Mr. Wendt, also says Campbell County, where he is based, recognizes that its future as a coal-producing area will hinge partly on seizing new technologies. Residents can look at flailing coal communities elsewhere and realize “we don’t want to be like that in 10, 15, 20 years,” he said.The law also expanded a tax credit for direct carbon sequestration, the process of removing carbon from the air and storing it underground or turning it into new products.Ryan Dorgan for The New York Times More

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    A California Land Mystery Is Solved. Now the Political Fight Begins.

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    Tech industry investors spent roughly $900 million buying land to build a dream city in a rural part of the Bay Area. It could be years, though, before they can do anything with it.Jan Sramek was 15 years old the first time he tried to get a government to do something he wanted. Back then, he was an internet- and science fiction-obsessed teenager growing up in Drevohostice, in the Czech Republic.The problem was his town of 1,400 people had only dial-up internet service. He persuaded the local government to pay an internet service provider to bring the town a broadband connection. He was even paid a commission for it, Mr. Sramek wrote in “Racing Towards Excellence,” a sort of self-help book for ambitious young adults he co-wrote in 2009.The next campaign for Mr. Sramek could be more profitable. It could also be longer, harder and, in all likelihood, nastier.The revelation last week that Mr. Sramek is leading a group of Silicon Valley moguls in an audacious plan to build a new city on a rolling patch of farms and windmills in Northern California was the unofficial beginning of what promises to become a protracted and expensive political campaign. More

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    Companies Push Prices Higher, Protecting Profits but Adding to Inflation

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    Corporate profits have been bolstered by higher prices even as some of the costs of doing business have fallen in recent months.The prices of oil, transportation, food ingredients and other raw materials have fallen in recent months as the shocks stemming from the pandemic and the war in Ukraine have faded. Yet many big businesses have continued raising prices at a rapid clip.Some of the world’s biggest companies have said they do not plan to change course and will continue increasing prices or keep them at elevated levels for the foreseeable future.That strategy has cushioned corporate profits. And it could keep inflation robust, contributing to the very pressures used to justify surging prices.As a result, some economists warn, policymakers at the Federal Reserve may feel compelled to keep raising interest rates, or at least not lower them, increasing the likelihood and severity of an economic downturn.“Companies are not just maintaining margins, not just passing on cost increases, they have used it as a cover to expand margins,” Albert Edwards, a global strategist at Société Générale, said, referring to profit margins, a measure of how much businesses earn from every dollar of sales.PepsiCo, the snacks and beverage maker, has become a prime example of how large corporations have countered increased costs, and then some.Hugh Johnston, the company’s chief financial officer, said in February that PepsiCo had raised its prices by enough to buffer further cost pressures in 2023. At the end of April, the company reported that it had raised the average price across its products by 16 percent in the first three months of the year. That added to a similar size price increase in the fourth quarter of 2022 and increased its profit margin.“I don’t think our margins are going to deteriorate at all,” Mr. Johnston said in a recent interview with Bloomberg TV. “In fact, what we’ve said for the year is we’ll be at least even with 2022, and may in fact increase margins during the course of the year.”The bags of Doritos, cartons of Tropicana orange juice and bottles of Gatorade drinks sold by PepsiCo are now substantially pricier. Customers have grumbled, but they have largely kept buying. Shareholders have cheered. PepsiCo declined to comment.PepsiCo is not alone in continuing to raise prices. Other companies that sell consumer goods have also done well.The average company in the S&P 500 stock index increased its net profit margin from the end of last year, according to FactSet, a data and research firm, countering the expectations of Wall Street analysts that profit margins would decline slightly. And while margins are below their peak in 2021, analysts are forecasting that they will keep expanding in the second half of the year.For much of the past two years, most companies “had a perfectly good excuse to go ahead and raise prices,” said Samuel Rines, an economist and the managing director of Corbu, a research firm that serves hedge funds and other investors. “Everybody knew that the war in Ukraine was inflationary, that grain prices were going up, blah, blah, blah. And they just took advantage of that.”But those go-to rationales for elevating prices, he added, are now receding.The Producer Price Index, which measures the prices businesses pay for goods and services before they are sold to consumers, reached a high of 11.7 percent last spring. That rate has plunged to 2.3 percent for the 12 months through April.The Consumer Price Index, which tracks the prices of household expenditures on everything from eggs to rent, has also been falling, but at a much slower rate. In April, it dropped to 4.93 percent, from a high of 9.06 percent in June 2022. The price of carbonated drinks rose nearly 12 percent in April, over the previous 12 months.“Inflation is going to stay much higher than it needs to be, because companies are being greedy,” Mr. Edwards of Société Générale said.But analysts who distrust that explanation said there were other reasons consumer prices remained high. Since inflation spiked in the spring of 2021, some economists have made the case that as households emerged from the pandemic, demand for goods and services — whether garage doors or cruise trips — was left unsated because of lockdowns and constrained supply chains, driving prices higher.David Beckworth, a senior research fellow at the right-leaning Mercatus Center at George Mason University and a former economist for the Treasury Department, said he was skeptical that the rapid pace of price increases was “profit-led.”Corporations had some degree of cover for raising prices as consumers were peppered with news about imbalances in the economy. Yet Mr. Beckworth and others contend that those higher prices wouldn’t have been possible if people weren’t willing or able to spend more. In this analysis, stimulus payments from the government, investment gains, pay raises and the refinancing of mortgages at very low interest rates play a larger role in higher prices than corporate profit seeking.“It seems to me that many telling the profit story forget that households have to actually spend money for the story to hold,” Mr. Beckworth said. “And once you look at the huge surge in spending, it becomes inescapable to me where the causality lies.”Mr. Edwards acknowledged that government stimulus measures during the pandemic had an effect. In his eyes, this aid meant that average consumers weren’t “beaten up enough” financially to resist higher prices that might otherwise make them flinch. And, he added, this dynamic has also put the weight of inflation on poorer households “while richer ones won’t feel it as much.”The top 20 percent of households by income typically account for about 40 percent of total consumer spending. Overall spending on recreational experiences and luxuries appears to have peaked, according to credit card data from large banks, but remains robust enough for firms to keep charging more. Major cruise lines, including Royal Caribbean, have continued lifting prices as demand for cruises has increased going into the summer.Many people who are not at the top of the income bracket have had to trade down to cheaper products. As a result, several companies that cater to a broad customer base have fared better than expected, as well.McDonald’s reported that its sales increased by an average of 12.6 percent per store for the three months through March, compared with the same period last year. About 4.2 percent of that growth has come from increased traffic and 8.4 percent from higher menu prices.The company attributed the recent menu price increases to higher expenses for labor, transportation and meat. Several consumer groups have responded by pointing out that recent upticks in the cost of transportation and labor have eased.A representative for the company said in an email that the company’s strong results were not just a result of price increases but also “strong consumer demand for McDonald’s around the world.”Other corporations have found that fewer sales at higher prices have still helped them earn bigger profits: a dynamic that Mr. Rines of Corbu has coined “price over volume.”Colgate-Palmolive, which in addition to commanding a roughly 40 percent share of the global toothpaste market, also sells kitchen soap and other goods, had a standout first quarter. Its operating profit for the year through March rose 6 percent from the same period a year earlier — the result of a 12 percent increase in prices even as volume declined by 2 percent.The recent bonanza for corporate profits, however, may soon start to fizzle.Research from Glenmede Investment Management indicates there are signs that more consumers are cutting back on pricier purchases. The financial services firm estimates that households in the bottom fourth by income will exhaust whatever is collectively left of their pandemic-era savings sometime this summer.Some companies are beginning to find resistance from more price-sensitive customers. Dollar Tree reported rising sales but falling margins, as lower-income customers who tend to shop there searched for deals. Shares in the company plunged on Thursday as it cut back its profit expectations for the rest of the year. Even PepsiCo and McDonald’s have recently taken hits to their share prices as traders fear that they may not be able to keep increasing their profits.For now, though, investors appear to be relieved that corporations did as well as they did in the first quarter, which has helped keep stock prices from falling broadly.Before large companies began reporting how they did in the first three months of the year, the consensus among analysts was that earnings at companies in the S&P 500 would fall roughly 7 percent compared with the same period in 2022. Instead, according to data from FactSet, earnings are expected to have fallen around 2 percent once all the results are in.Savita Subramanian, the head of U.S. equity and quantitative strategy at Bank of America, wrote in a note that the latest quarterly reports “once again showed corporate America’s ability to preserve margins.” Her team raised overall earnings growth expectations for the rest of the year, and 2024. More

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    Billionaires Worth More Than the United States’ Cash Balance

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    The cash balance at the Treasury Department is now lower than the net worth of some of the world’s richest people.The Treasury Department said its cash balance fell to $38.8 billion as of Thursday, as the United States inched toward running out of cash to pay its bills.That was significantly lower than the $316 billion the department had in operating cash, which is held at the Federal Reserve Bank of New York, at the start of the month.Just how empty is the Treasury cash coffer? For comparison, $38.8 billion is on par with the gross domestic product of Bahrain and Paraguay and lower than the net worth of more than two dozen of the wealthiest people in the world. Of course, much of the assets of those billionaires are tied up in stocks, rather than liquid assets.Here is a list of people with higher net worths than the U.S. cash reserves, according to Bloomberg News’s Billionaire Index as of Thursday. (Under the news agency’s editorial policy, its billionaire owner, Michael Bloomberg, is not considered for the index. Forbes, though, estimates his net worth at $94.5 billion.)Bernard Arnault, chief executive of the luxury group LVMH: $189 billionElon Musk, chief executive of SpaceX, Tesla and Twitter: $179 billionJeff Bezos, founder and chief executive of Amazon: $139 billionBill Gates, co-founder of Microsoft: $125 billionLarry Ellison, co-founder and executive chairman of Oracle: $116 billionSteve Ballmer, investor and former chief executive of Microsoft: $113 billionLarry Page, co-founder of Google: $112 billionWarren Buffett, investor: $111 billionSergey Brin, co-founder of Google: $106 billionMark Zuckerberg, co-founder and chief executive of Facebook: $92.3 billionCarlos Slim, investor: $90.3 billionFrançoise Bettencourt Meyers, heir to the L’Oréal fortune and company board member: $87.2 billionMukesh Ambani, chairman of the energy group Reliance Industries: $83.7 billionAmancio Ortega, founder of the Inditex fashion group: $67.1 billionJim Walton, heir to the Walmart fortune: $66.6 billionRob Walton, heir to the Walmart fortune: $64.9 billionAlice Walton, heir to the Walmart fortune: $63.8 billionGautam Adani, founder and chairman of the Adani Group conglomerate: $63.4 billionJacqueline Mars, heir to and co-owner of the candy maker Mars: $61.7 billionJohn Mars, heir to and chairman of Mars: $61.7 billionZhong Shanshan, founder and chairman of the bottled-water company Nongfu Spring: $61.6 billionJulia Flesher Koch and family, heirs of the businessman David Koch: $60.6 billionCharles Koch, chief executive of the industrial conglomerate Koch Industries: $60.4 billionMichael Dell, chief executive and chairman of Dell Technologies: $53.4 billionAlain Wertheimer, co-owner and chairman of Chanel: $45.9 billionGérard Wertheimer, co-owner of Chanel: $45.9 billionGiovanni Ferrero, executive chairman of the chocolate and confectionery company Ferrero Group, and family: $43.6 billionZhang Yiming, founder and chief executive of the technology company ByteDance: $42.3 billionPhil Knight, co-founder of Nike, and family: $41.5 billionKlaus-Michael Kühne, honorary chairman and majority owner of the transport company Kuehne+Nagel: $40.9 billionFrançois Pinault, founder of the luxury group Kering: $39.6 billion More

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    The Greatest Wealth Transfer in History Is Here, With Familiar (Rich) Winners

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    In an era of surging home and stock values, U.S. family wealth has soared. The trillions of dollars going to heirs will largely reinforce inequality.An intergenerational transfer of wealth is in motion in America — and it will dwarf any of the past.Of the 73 million baby boomers, the youngest are turning 60. The oldest boomers are nearing 80. Born in midcentury as U.S. birthrates surged in tandem with an enormous leap in prosperity after the Depression and World War II, boomers are now beginning to die in larger numbers, along with Americans over 80.Most will leave behind thousands of dollars, a home or not much at all. Others are leaving their heirs hundreds of thousands, or millions, or billions of dollars in various assets.In 1989, total family wealth in the United States was about $38 trillion, adjusted for inflation. By 2022, that wealth had more than tripled, reaching $140 trillion. Of the $84 trillion projected to be passed down from older Americans to millennial and Gen X heirs through 2045, $16 trillion will be transferred within the next decade.Baby Boomers Hold Half of the Nation’s $140 Trillion in Wealth More

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    Biden’s $6.8 Trillion Budget Proposes New Social Programs and Higher Taxes

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    WASHINGTON — President Biden on Thursday proposed a $6.8 trillion budget that sought to increase spending on the military and a wide range of new social programs while also reducing future budget deficits, defying Republican calls to scale back government and reasserting his economic vision before an expected re-election campaign.The budget contains some $5 trillion in proposed tax increases on high earners and corporations over a decade, much of which would offset new spending programs aimed at the middle class and the poor. It seeks to reduce budget deficits by nearly $3 trillion over that time, compared with the country’s current path.It reaffirms Mr. Biden’s case that he can prevent the growing debt burden from weighing on the economy while expanding spending and protecting popular safety-net programs — almost entirely by asking companies and the wealthy to pay more in taxes.But after claiming credit for a $1.7 trillion decline in the annual deficit over the past year, Mr. Biden now sees the deficit increasing again in the 2024 fiscal year, to $1.8 trillion. The jump is larger than other forecasters, like the Congressional Budget Office, have projected. It is driven by rising costs of servicing the national debt as the Federal Reserve raises interest rates to curb inflation and by new programs the president is proposing that are not fully offset by tax increases in their first year.The plan drew swift criticism from Republicans, who are locked in an economically perilous debate with Mr. Biden over the borrowing limit, which House conservatives refuse to raise unless he agrees to sharp spending cuts.Senator Charles E. Grassley of Iowa, the top Republican on the Budget Committee, said Mr. Biden’s spending blueprint was “an unserious proposal and will be treated as such by both parties in Congress.”The budget plan, he said, “is a road map for fiscal ruin.”The proposals stand little chance of becoming law because Republicans won control of the House in November. Instead, Mr. Biden’s budget request was a political statement of values aimed at winning public opinion amid the debt-limit fight and a nascent 2024 campaign.He unveiled the plan formally on Thursday in Philadelphia. His budget would “lift the burden off families in America,” the president said during a swing-state speech meant to contrast his economic vision with that of Republicans who have called for spending cuts.“My budget is about investing in America and all of America,” Mr. Biden said during a roughly 50-minute speech to scores of union workers, Biden supporters and local Pennsylvania politicians. “Too many people have been left behind and treated like they’re invisible. Not anymore. I promise I see you.”The president emphasized a message of bolstering manufacturing, an effort many of his allies believe can sway blue-collar workers who in recent years have lost faith in the Democratic Party.The proposals in the budget showcased Mr. Biden’s early success in expanding the federal government’s role in the economy, and they reaffirmed his push for more. On Mr. Biden’s watch, its numbers show, domestic spending in areas like research and support for manufacturing has grown significantly larger as a share of the economy than was considered in the budget plans of the last Democratic administration, under President Barack Obama, when Mr. Biden was vice president.An Intel semiconductor manufacturing facility in New Albany, Ohio, is part of Mr. Biden’s plan to rebuild American manufacturing.Pete Marovich for The New York TimesIn his first two years as president, Mr. Biden signed laws to expand and rebuild critical infrastructure like water pipes and highways, bolster U.S. manufacturing of semiconductors and other high-tech goods, and accelerate a transition from fossil fuels toward low-emission sources of energy to fight climate change. He delivered military aid to Ukraine in its fight against Russia and signed a bipartisan law to increase federal medical care for military veterans exposed to toxic burn pits.He also left much of his economic agenda unfinished, a fact reflected in his budget, which renewed calls for programs that failed to pass muster when his party controlled Congress..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.“This president clearly believes the way to grow this economy is investing in the middle class and working families,” Shalanda D. Young, the director of the White House budget office, told reporters on Thursday.The president’s budget proposed $400 billion to deliver affordable child care for parents, $150 billion for home care for older Americans and disabled people, and nearly $400 billion to make permanent expanded health coverage assistance through the Affordable Care Act. He would spend $325 billion to guarantee paid leave for workers and nearly $300 billion combined for free community college and prekindergarten for students. He is seeking $100 billion in additional assistance to lower housing costs for homeowners and renters.Mr. Biden would reinstate for three years an expanded child tax credit, which was included in the economic aid bill he signed in 2021 but expired last year, as a means of reducing child poverty. He would make permanent a change in the credit that allows people to benefit from it in full even if they do not make enough money to owe federal income taxes. Together, the changes would cost more than $400 billion.To help offset costs, Mr. Biden proposed a series of tax increases on corporations and the wealthiest Americans. They include a 25 percent tax aimed at billionaires (he requested a similar tax last year but at a lower rate: 20 percent). He also called for quadrupling a tax on stock buybacks and renewed his push to roll back President Donald J. Trump’s tax cuts for high earners and to raise the corporate income tax rate to 28 percent from 21 percent.Mr. Biden proposed increasing and expanding a tax on Americans earning more than $400,000 as part of efforts to extend the solvency of Medicare by a quarter-century. He is also seeking new savings for the government based on more aggressive negotiation over prescription drug prices.But for the third consecutive budget, Mr. Biden did not put forth any new initiatives to extend the solvency of Social Security — unlike during the 2020 campaign, when he sought to expand benefits and bolster the program’s trust fund by effectively raising payroll taxes on people earning more than $400,000 a year.The budget offered few paths to compromise between Mr. Biden and Republicans on fiscal issues. One potential area of common ground was responding to what both parties call a growing military and economic threat from China. The budget proposed $9.1 billion in investments next year through the Pentagon’s “Pacific Deterrence Initiative,” which includes expenditures on new weapons systems that can be used to protect allies and defend U.S. interests in the region. It also asks for $400 million to a fund dedicated to countering the influence of the Chinese Communist Party abroad, such as exposing Chinese disinformation campaigns.The budget also refers to various domestic investments, which the administration argues are needed to make the U.S. economy more competitive with China. That includes money for domestic research into agriculture, an area where it says China has become the largest funder of research, as well as major investments in the manufacturing of semiconductors, clean energy products and other technologies in the United States.Still, Speaker Kevin McCarthy of California and his lieutenants reiterated on Thursday that they intended to insist on significant reductions in spending before they would consider allowing the federal debt limit to be raised — even though a stalemate over the debt limit could shake the world economy and endanger the retirement savings of millions of Americans.“We must cut wasteful government spending,” Mr. McCarthy and the other members of his leadership team said in a joint statement issued after Mr. Biden’s budget was released. “Our debt is one of the greatest threats to America, and the time to address this crisis is now.”The budget sees the gross national debt increasing by about $18 trillion through 2033, rising to just above $50 trillion. But the administration suggests that growth will not threaten the economy. “The economic burden of debt would remain low and in line with recent historical experience over the next decade,” administration officials wrote in the proposal.Last year’s budget painted a rosy and ultimately over-optimistic picture of the U.S. economy. The administration expected gross domestic product to grow 4.2 percent after adjusting for inflation, for instance, but it ultimately climbed by a more modest 2.1 percent.The new budget’s projections were more muted, with a caveat. The White House sees the economy growing by only 0.6 percent after adjusting for inflation this year, a weak pace that is in line with outside expectations. It also predicted a substantial increase in the unemployment rate — to 4.3 percent, a notable rise from 3.4 percent in January. Alongside that slowdown, inflation is expected to moderate.But officials noted that the administration completed its projections in November and that economic data had been stronger than expected since. Administration economists said in a blog post that unemployment “would likely be lower” than the official forecast in light of that.Much of the budget’s contents were holdovers from Mr. Biden’s previous proposals. But there were also a few new plans. One of them was a tax on the energy used in creating new digital currency assets, known as cryptocurrency mining. That practice relies on large amounts of electricity and generates emissions that contribute to climate change.Administration officials want to discourage the practice, which they say impedes the country’s energy transition. So they proposed a 30 percent tax on the electricity used in it, phased in over three years, whether that comes from an electric utility or a localized source like a home solar panel, on the theory that the energy involved would be put to better purpose in another use.Reporting was contributed by More