[Comprehensive] In Response to North Korean Missiles and Chinese Threats... Biden Increases Defense Budget and Reduces Fiscal Deficit

[Image source=AP Yonhap News]

[Asia Economy New York=Special Correspondent Seulgina Jo] The Biden administration in the United States has increased next year's national security budget to over $800 billion (approximately 978 trillion KRW), citing North Korea's successive missile threats, Russia's invasion of Ukraine, and China's rise. This budget plan is characterized by expanding the national security budget, including defense spending, despite reducing the total amount, and reducing the fiscal deficit by about $1 trillion over the next decade through increased taxes on the ultra-wealthy.

◆Biden: "The Largest National Security Investment in History"

On the 28th (local time), the Biden administration submitted a $5.8 trillion (approximately 7,100 trillion KRW) budget proposal for the 2023 fiscal year (October 2022 to September 2023) to Congress. In a speech at the White House that day, President Biden presented three key themes of the budget proposal: ▲ fiscal responsibility ▲ safety and security ▲ investments necessary to build a better America, stating that "this budget sends a clear message to the American people about what we prioritize."

First, the Biden administration allocated $813 billion for national security in the 2023 fiscal year. This is nearly a 4% increase compared to this year ($782 billion). Of this, the budget allocated to the Department of Defense is $773 billion, an 8.1% increase from the previous year. Notably, the largest-ever budget will be invested in strengthening nuclear forces, including hypersonic missile development ($34.4 billion), missile defense program development ($24.7 billion), and research and development (R&D) to maintain superiority in defense ($131 billion).

Deputy Secretary of Defense Kathleen Hicks, in a separate briefing, mentioned Russia's invasion of Ukraine, strengthening deterrence against China, the greatest strategic competitor, and the ongoing threats from North Korea and Iran, emphasizing that "at a time facing countless challenges, such investments are more essential than ever." She stated that this defense budget aligns with the tone of the 'National Defense Strategy' submitted together that day and identified "strengthening deterrence against China" as a priority in defense work.

Budgets of $1 billion for Ukraine, which is resisting the Russian invasion, and $6.9 billion for the European Deterrence Initiative and support for the North Atlantic Treaty Organization (NATO) were also allocated. Additionally, $30 billion will be invested in domestic crime prevention. President Biden emphasized, "This will be one of the largest investments in national security in history."

The budget proposal also includes increased spending on climate change-related budgets such as clean energy. A total of $21 billion was allocated for clean energy programs and climate resilience, raising the overall federal government climate change-related budget to $45 billion. However, the budget for Biden's flagship initiative, the Build Back Better Act, was not included due to uncertainties in negotiations.

◆Strengthening Fiscal Soundness through Taxation on the Wealthy

The Biden administration also presented plans to reduce the fiscal deficit by about $1 trillion over the next decade to improve national fiscal soundness. President Biden said, "We are reducing the 'Trump deficit' and normalizing fiscal conditions," adding, "What we prioritize most is fiscal responsibility." To this end, they revealed plans to secure $2.5 trillion in new tax revenue through measures such as establishing a 'minimum income tax on billionaires.' This so-called 'wealth tax' refers to imposing a minimum 20% tax on all income, including unrealized capital gains, for Americans with assets valued at over $100 million.

The Washington Post (WP) analyzed, "Last year's White House budget would have increased the national fiscal deficit by about $1.4 trillion over ten years," but "applying this year's budget could reduce the annual deficit by more than $100 billion after 2029." This is also interpreted as a policy to respond to voter concerns about inflation by reducing government spending and fiscal deficits ahead of the midterm elections in the second half of the year. Ben Ritz of the progressive think tank Center for American Progress evaluated, "The government appears to have shifted from expansionary fiscal policy to deficit reduction."

However, some in Congress argue that considering recent movements by China, Russia, and North Korea, the increase in defense spending is far from sufficient. Senate Minority Leader Mitch McConnell of the Republican Party criticized the 'wealth tax' and defense spending, stating, "The White House budget shows that the Biden administration's far-left values are disconnected from what American families actually need." He demanded an increase in defense spending, saying, "Above all, the defense budget is far too low in these dangerous times."

Senator James Inhofe, also a Republican, recently cited inflation levels, saying, "I don't think the defense budget is sufficient to face all the threats we currently face," while Senator Bernie Sanders argued, "We are already spending more on defense than the next 11 countries combined, so there is no need for further increases."

This content was produced with the assistance of AI translation services.