Here’s What’s In Biden’s Budget Plan for State and Local Governments

Drawing a contrast with Republicans before the upcoming budget battle in Congress, President Joe Biden on Thursday proposed a $6.8 trillion budget that would send more funds to state and local governments to tackle a range of issues from housing and health care to transportation, as well as would restore the child tax credit.

Biden’s proposals, though, were derided by Republicans, who are pushing to reduce federal spending.  

“President Joe Biden’s budget is a reckless proposal doubling down on the same far-left spending policies that have led to record inflation and our current debt crisis,” said House Speaker Kevin McCarthy and Majority Leader Steve Scalise, both Republicans, in a statement.

The proposals are not expected to be enacted by Congress. Rather, they lay out the priorities the administration will be pushing for in the upcoming budget negotiations.

Housing

One of those priorities is to substantially increase funding to states and localities to build more housing.

Overall, the administration asked to increase the Department of Housing and Urban Development’s budget by $1.1 billion to $73.3 billion, a 1.6% increase.

“​​Families need a little breathing room, and that’s why the budget includes proposals to bring down the costs of everyday necessities,” Office of Management and Budget Director Shalanda Young said during a call with reporters on Thursday.

The housing programs that Biden is seeking increased funding for include:

• The HOME Investment Partnerships Program, which helps states, cities, and counties build, buy, and rehabilitate affordable housing. Biden wants an additional $300 million to bring the program total to $1.6 billion.
• The Housing Choice Vouchers program to help low-income people pay their rent. The increase, which would bring funding to $32.7 billion, would provide vouchers for an additional 50,000 households with an emphasis on those who are experiencing homelessness or fleeing domestic violence.
• A $116 million increase in funding in Homeless Assistance Grants, which would raise funding for the program to $3.7 billion and aid an additional 25,000 households.
• And $3 billion in competitive grants to states and localities to prevent evictions by offering access to legal counsel and providing rental assistance.

Biden is also continuing to encourage cities and states to eliminate single-family zoning, which the administration believes limits the nation’s housing supply and raises prices by blocking more multifamily housing from being built.

Biden’s proposal includes $10 billion to incentivize state and local governments to expand supply and increase housing choice by reducing barriers to the development of affordable housing. He’ll reward an additional $85 million to jurisdictions that have already made progress in removing barriers to affordable housing. 

“States and localities that embrace efforts to increase their supply of housing would ease cost growth for renters and homebuyers in those areas,” the proposal said. 

Child Tax Credit

Another top priority for the administration is to restore the child tax credit, especially after Democrats were unable to convince Republicans to prevent it from expiring at the end of last year.

Bringing back the higher tax credits—to $3,600 from $2,000 for children under six years old and to $3,000 for kids ages six to 17—is a priority for many state and local officials, who see it as a crucial way to support households in their communities.

Biden in his proposal noted that increasing the tax break cut child poverty in half in 2021, “the lowest level in history.”

Health Care 

The Biden administration is also looking to make permanent the American Rescue Plan Act’s expansion of health insurance premium subsidies to more people, which are set to expire in 2025. 

Previously only those making between the poverty level and four times the level had been eligible for the subsidies under the Obama administration’s signature health care program, the Affordable Care Act. The pandemic relief package, however, beefed up those subsidies and allowed more middle-class people to qualify.

“The President believes that health care should be a right, not a privilege,” a White House fact sheet on his budget proposal said.

Cash Assistance

Biden wants Congress to increase funding to states to help low-income people pay their energy bills by $111 million to $4.1 billion. The funds, through the Low Income Home Energy Assistance Program, would come on top of the $13 billion included for the program in the Inflation Reduction Act.

Given that the separate Low Income Household Water Assistance Program is due to expire at the end of this year, Biden is proposing that states be able to use a portion of the energy assistance funds to help low-income families pay their water and sewage bills as well.

Food Security

Under another proposal, Biden called for giving states $15 billion to allow more schools to offer free meals to all of their students. The proposal comes after a waiver that reimbursed schools for offering free meals to all students expired last June. 

Addressing Climate Change

Biden called for increasing funding for the Environmental Protection Agency by $1.9 billion or 19%.

He is specifically requesting that staffing at the agency be increased by 2,400 full-time equivalent workers, saying that “staffing reductions under the previous administration continue to undermine the Agency’s ability to carry out its mission.”

Transportation

Finally, Biden wants to increase funding for transportation by $1.8 billion, a 6.7% increase.

Funding to upgrade the nation’s highways and bridges would rise by $1.3 billion to $60.1 billion. In that request, money would also be made available to build electric vehicle charging stations around the country.

The administration is also proposing increases for transit. Formula grants for transit would rise by $356 million to $14 billion.

“Transit systems face an uncertain future as ridership and fare revenue have not fully rebounded from the COVID-19 pandemic, given significant shifts in work and commuting patterns,” the budget proposal said.