FACT SHEET: The President’s Budget Lowers Costs for the American People
President Biden is fighting to lower costs for American families and has made lowering costs his top domestic priority. From the first days of the Administration, the President has moved swiftly to deliver results for the American people and grow the economy from the middle out and bottom up. Since the President took office, the economy has added about 15 million jobs and the unemployment rate has remained below 4 percent for two years in a row. Under the President’s leadership, the Nation has seen significant progress in bringing down inflation—which spiked worldwide as a result of the global pandemic and Putin’s illegal war against the people of Ukraine. Inflation is down by two-thirds from its peak, and costs have fallen for everyday purchases from a gallon of gas to a gallon of milk. Lower inflation alongside a strong labor market has led to real wage gains for American families, with average hourly earnings adjusted for inflation higher than before the pandemic and growing at a solid pace over the last year. America has achieved faster growth than any of our peer nations and has lower inflation than almost any other major economy.
Unfortunately, some companies are keeping prices high—which is why President Biden is calling on corporations to pass along savings to consumers by bringing prices down. He is cracking down on corporate rip-offs, including junk fees, price gouging and shrinking packages to hide price increases— “shrinkflation.” The Administration has taken on Big Pharma to lower prescription drug costs and cap insulin at $35 a month, Big Banks to bring down overdraft fees from $35 to $4, and major airlines to eliminate family seating fees.
Congressional Republicans have no plan to lower costs for Americans and have instead proposed giveaways to the wealthy, big corporations, and Big Pharma that will increase the cost of prescription drugs, utility bills, health insurance premiums, and student loan payments for millions. The Budget takes a different approach, building on the Administration’s critical work to lower costs for the American people with proposals to help more Americans keep more of their hard-earned paychecks while tackling the challenges that remain. The President’s Budget:
Lowers Prescription Drug and other Healthcare Costs
Expands Access to Quality, Affordable Healthcare. The President and the Vice President believe that healthcare should be a right, not a privilege. With enrollment in Marketplace coverage at an all-time high, the Budget builds on the incredible success of the Affordable Care Act by making permanent the expanded premium tax credits that the Inflation Reduction Act extended and providing Medicaid-like coverage to individuals in States that have not adopted Medicaid expansion, paired with financial incentives to ensure States maintain their existing expansions. For Medicaid and the Child Health Insurance Program (CHIP), the Budget allows States to extend the existing 12-month continuous eligibility for all children to 36 months, and allows States to provide continuous eligibility for children from birth until they turn age 6. Further, the Budget prohibits enrollment fees and premiums in CHIP. In addition, the Budget includes funding for continued implementation of the No Surprise Act, which protects Americans across the Nation from surprise medical bills.
Lowers Drug Prices and Expands Access to Prescription Drugs. Thanks to action taken by the Administration, millions of seniors and people with disabilities are saving money on their drug costs, and the Administration announced the first ten drugs for which prices will be negotiated as it continues implementation of the Inflation Reduction Act. The Budget builds on this success by significantly increasing the pace of negotiation, bringing more drugs into negotiation sooner after they launch, expanding the Inflation Reduction Act’s inflation rebates and $2,000 out-of-pocket prescription drug cost cap beyond Medicare and into the commercial market, and by taking other steps to build on the Inflation Reduction Act drug provisions. In addition, the Budget extends the $35 cost-sharing cap for a month’s supply of insulin to the commercial market. The Budget also includes proposals to ensure Medicaid and the CHIP are prudent purchasers of prescription drugs and limits Medicare Part D cost-sharing for high-value generic drugs, such as those used to treat hypertension and hyperlipidemia, to no more than $2 per month for Medicare beneficiaries.
Reduces Costs for Families
Lowers Child Care Costs for Hard-Working Families. The President is committed to providing relief to hard-working families. His Budget creates a historic new program under which working families with incomes up to $200,000 per year would be guaranteed affordable, high-quality child care from birth until kindergarten, with most families paying no more than $10 a day, and the lowest income families paying nothing. This would provide a lifeline to the parents of more than 16 million children. The Budget also includes $8.5 billion for the Child Care and Development Block Grant (CCDBG) which will allow states to expand child care assistance and serve over 2 million low-income children.
Builds a Strong Foundation for Families with Universal Pre-K and Head Start. The Budget funds voluntary, universal, free preschool for all four million of the Nation’s four-year-olds and charts a path to expand preschool to three-year-olds. High-quality preschool would be offered in the setting of the parent’s choice—from public schools to child care providers to Head Start. In addition, the Budget increases Head Start funding by $544 million to support the Administration’s goal to reach pay parity between Head Start staff and public elementary school teachers with similar qualifications over time. Together these proposals would support healthy child development, help children enter kindergarten ready to learn, and support families by reducing their costs prior to school entry and allowing parents to work.
Cuts Taxes for Families with Children and American Workers. The Budget restores the full Child Tax Credit expansion enacted in the American Rescue Plan, which helped cut child poverty nearly in half in 2021 to its lowest level in history. The Budget expands the credit from $2,000 per child to $3,000 per child for children six years old and above, and to $3,600 per child for children under six. In addition, the Budget permanently reforms the credit to make it fully refundable, so that it no longer excludes 18 million children in the lowest-income families from receiving the full credit, and allows families to receive monthly advance payments. In total, the Budget’s restoration of the full Child Tax Credit expansion would lift 3 million children out of poverty and cut taxes by an average of $2,600 for 39 million low- and middle-income families that include 66 million children. The President also calls on Congress to make permanent the American Rescue Plan’s Earned Income Tax Credit expansion for workers not raising children in their homes, which would boost the income of 19 million low-paid workers.
Supports a Strong Nutrition Safety Net. The Budget provides $8.5 billion for critical nutrition programs, including $7.7 billion to fully fund participation in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) to serve all eligible participants, which is critical to the health of pregnant women, new mothers, infants, and young children. By investing in outreach and modernization, WIC would reach 800,000 more women, infants, and children each month, providing vital nutrition assistance to nearly seven million individuals, up from 6.2 million in 2021. In addition, the Budget includes an emergency contingency fund that would provide additional resources when there are unanticipated cost pressures.
Lowers Housing Costs
Increases Affordable Housing Supply to Reduce Housing Costs. The President and Vice President believe that all Americans should be able to afford a quality home. That’s why the President’s Budget includes a historic investment of more than $258 billion that would build or preserve over 2 million units, support millions of first-time homebuyers, guarantee affordable housing for hundreds-of-thousands of extremely low-income veterans and youth aging out of foster care, and advance efforts to end homelessness. The Budget expands the existing Low-Income Housing Tax Credit and proposes a new Neighborhood Homes Tax Credit. To further address the critical shortage of affordable housing, the Budget provides $20 billion in mandatory funding for a new Innovation Fund for Housing Expansion. The Budget also provides $15 billion combined in mandatory funding for new Project-Based Rental Assistance contracts to incentivize the development of new climate-resilient affordable housing as well as to preserve existing public housing units. The Budget invests $1.3 billion in the HOME Investment Partnerships Program to construct and rehabilitate affordable rental housing and provide homeownership opportunities. Together, these proposals would expand the supply of safe and affordable housing, bring new units to market, and ultimately help curb cost growth across the broader rental market.
Expands Access to Homeownership and Reduces Down Payments for First-Time and First-Generation Homebuyers. The Budget proposes a new Mortgage Relief Credit to help increase access to affordable housing. The proposal includes a new tax credit for middle-class first-time homebuyers of $10,000 over two years, and to unlock starter home inventory for first-time homebuyers and help middle-class families who are “locked in” to their current homes due to lower mortgage rates on their mortgages than current rates, this proposal includes a credit of up to $10,000 for one year to middle-class families who sell their starter home. The Budget also provides $10 billion in mandatory funding for a new First-Generation Down Payment Assistance program to address homeownership and wealth gaps. The Budget preserves the Administration’s progress expanding access to homeownership for underserved borrowers, including many first-time and minority homebuyers, through Federal Housing Administration (FHA) and Ginnie Mae credit guarantees.
Expands Access to Affordable Rent through the Housing Choice Voucher (HCV) Program. The HCV program currently provides 2.3 million low-income families with rental assistance to obtain housing in the private market, but many families who are eligible do not receive assistance due to limited funding. The Budget proposes $32.8 billion in discretionary funding to maintain and protect critical services for all currently assisted families and support an additional 20,000 households. The Budget also provides $9 billion to establish a housing voucher program for all 20,000 youth aging out of foster care annually, and provides $13 billion to incrementally expand rental assistance for 400,000 extremely low-income veteran families, paving a path to guaranteed assistance for all who have served the Nation and are in need. Since the beginning of this Administration, HUD has expanded voucher assistance to over 100,000 additional families, and the Budget continues this progress.
Makes College More Affordable
Improves College Affordability and Provides Free Community College. To help low-and middle-income students overcome financial barriers to postsecondary education, the Budget proposes to increase the discretionary maximum Pell Grant by $100 and thereby expand the reach of the program to over 7 million students. The Budget builds on successful bipartisan efforts to increase the maximum Pell Grant award by $900 over the past two years – the largest increase in more than 10 years. The Budget provides a path to double the maximum award by 2029 for students attending public and non-profit institutions. The Budget also expands free community college across the Nation through a Federal-State partnership. In addition, the Budget provides two years of subsidized tuition for students from families earning less than $125,000 enrolled in a four-year Historically Black College and University (HBCU), Tribally Controlled College and University (TCCU), or Minority-Serving Institution (MSI).
Reduces the Cost of Education Pathways that Connect to Growing Jobs. From Day One of his Administration, President Biden vowed to fix the student loan system and make sure higher education is a pathway to the middle class – not a barrier to opportunity. The Budget includes a $12 billion mandatory Reducing the Costs of College Fund that will fund strategies to lower college costs for students, including a new $7.2 billion Classroom to Career program which will enable students to more affordably obtain postsecondary degrees and certificates by providing states with matching funds to offer at least 12 no-cost postsecondary credits through career-connected dual enrollment to all interested students.
Cuts Energy Costs and Expands Access to Affordable Internet
Lowers Energy Costs and Catalyzes Clean Energy and Economic Growth in Rural Communities. The Budget builds on the $13 billion provided in the President’s historic Inflation Reduction Act for rural development programs at the Department of Agriculture to reduce energy bills for families, expand clean energy, transform rural power production, and create thousands of good-paying jobs for people across rural America. The Budget provides $1 billion for loan guarantees for renewable energy systems to bring down energy costs, as well as $53 million in zero-interest loans for the Rural Energy Savings Program, which would help rural Americans implement durable cost-effective energy efficiency measures in their homes, which lowers energy costs and contributes to the President’s clean energy goals. In addition to these investments, the Budget provides over $5 billion to support energy communities, many of which are rural. These investments are also in addition to the $10.7 billion provided government-wide to accelerate clean energy innovation, which will help make clean energy an affordable and reliable option for everyone.
Reduces Home Energy and Water Costs. Reducing household energy and water costs continues to be a priority for the Administration. The Budget provides $4.1 billion for the Low Income Home Energy Assistance Program (LIHEAP)—building on the $7 billion in additional funding the Administration has secured for LIHEAP since 2021—to help families access home energy and weatherization assistance, which are vital tools for protecting vulnerable families’ health in response to extreme weather and climate change. In addition, since the Low-Income Household Water Assistance Program (LIHWAP) expired at the end of 2023, the Budget proposes to allow States the option to use a portion of their LIHEAP funds to provide water bill assistance to low-income households. EPA programs like the State Revolving Funds and water infrastructure grant programs can provide cost savings to water utilities, which can also save ratepayers money.
Connects More Americans to Affordable, High-Speed, and Reliable Internet. The President is committed to ensuring that every American has access to affordable broadband internet—and thanks to his Bipartisan Infrastructure Law, the Affordable Connectivity Program has provided high-speed Internet service to over 23 million eligible low income households at low or no cost; the Department of Commerce has allocated nearly $42 billion in Broadband Equity, Access and Deployment program funding to deploy reliable high-speed Internet service; and USDA investments are expected to expand broadband access to more than 137,000 households. Building on Bipartisan Infrastructure Law funding, the Budget provides $112 million for USDA’s ReConnect program, which provides grants and loans to deploy broadband to unserved areas, especially tribal areas. The Budget also includes the Administration’s pending supplemental request for $6 billion to continue the Affordable Connectivity Program in 2024, and the Administration will work with the Congress to secure additional funding for this important need in 2025 and beyond.
Bolsters Competition and Takes on Junk Fees
Bolsters Antitrust Enforcement. The Budget proposes $288 million for the Department of Justice’s Antitrust Division, which is a 56 percent increase since 2021, and $535 million for the Federal Trade Commission, which is a 52 percent increase since 2021, to strengthen antitrust enforcement efforts to promote vigorous marketplace competition and reduce costs and raise wages for the American people. In addition, the President will work with Congress to make fee funding from pre-merger filing fees mandatory, so that agencies would always have access to the full amount of fees.
Eliminates the Origination Fee on Student Loans. The Budget builds on the President’s historic actions to reduce student debt and the cost of college by eliminating the origination fees charged to borrowers on every new federal student loan. These unnecessary fees burden anyone who needs to borrow to help get an education and cost American families billions. A typical teacher or nurse taking out federal loans for undergraduate and graduate degrees will pay $1000 or more over the life of their loan because of these fees. Parents often fare even worse, with the average parent borrowing on behalf of their child paying out an additional $2800 or more because of these fees. Eliminating this fee will reduce costs for student and parent borrowers.
###
