On Friday, May 28, the Biden administration released its fiscal year (FY) 2022 budget request (“Budget”) and the following accompanying documents.
- Fact Sheet. Six-page summary of various proposals in the Budget.
- Analytical Perspectives. Contains a detailed analysis of specific subject areas within the Budget. It includes information on federal receipts and collections; analyses of federal spending; and information on federal borrowing and debt.
- Appendix. Provides details on appropriations and legislative proposals for each agency.
- General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals (“Green Book”). For the first time since 2016, the Budget also includes a Green Book, which provides cost estimates and descriptions for the revenue proposals in the Budget.
The Budget provides insight into the president’s top policy priorities and information on how these priorities will impact federal deficits, economic growth, and more. This tax policy alert includes an overview of the Budget, key takeaways on various revenue proposals, and a summary of the revenue proposals included in the Green Book.
Budget Overview
The $6 trillion Budget is the largest in U.S. history. The Budget includes two of President Biden’s cornerstone legislative priorities: The $2.3 trillion American Jobs Plan and the $1.8 trillion American Rescue Plan. The Budget also outlines plans for $1.7 trillion in discretionary spending to fund federal agencies. Proposed tax hikes in the Budget are estimated to raise $3.6 trillion over the next decade, paired with $1.2 trillion in tax incentives. Of note, both the American Jobs Plan and American Families Plan together are paid for with tax increases over 15 years, as opposed to the traditional 10-year budget window.
The administration views the proposal as a down payment to grow the middle class. It estimates unemployment would fall from its current 6.1% to 4.1% next year and remain below 4% thereafter. Once fully enacted, the White House expects the plan to spur annual economic growth of just under 2% annually, after accounting for inflation. Growth projects are comparatively low and are similar to post-financial crisis projections by the Obama administration.
Click here for a list of government reforms, key takeaways and a full breakdown of the Biden administration's FY 2022 budget request.