4 Ways Biden's Budget Would Save Average Americans Money

The president wants to ease the cost of housing, healthcare, and childcare.

President Biden set out his spending priorities for the 2024 fiscal year this week in a $6.8 trillion budget proposal. Biden says he wants to "lift the burden on hardworking Americans" and reduce costs for healthcare, childcare, and housing.

Before you get too excited about his proposals, know that it's extremely unlikely the budget will pass as it stands. Indeed, the plans have already been criticized by Republicans and the New York Times said many consider the budget to be "dead on arrival."

All the same, it marks the beginning of budget negotiations in Washington, and if any of his measures survive the back and forth, there are several that could ease the pressure on your bank account.

1. Expand Child Tax Credit and help parents with childcare

Earlier in the COVID-19 pandemic, the government increased the scope and amount of the Child Tax Credit from the current maximum of $2,000 per child. Those provisions expired at the end of 2021, but Biden wants to bring them back. Specifically, he proposes to:

• Increase credit to $3,000 for children age 6 and over and $3,600 for those younger than 6.
• Make credit fully refundable, which means more parents will be able to benefit. Right now the credit is partially refundable, so families who don't owe a lot of tax may not be able to claim the full amount.

The budget also includes proposals to reduce childcare costs for working parents, including providing high-quality free preschool as part of a Federal-State partnership. He also wants to establish a paid family and medical leave program.

2. Reduce healthcare costs

According to The Ascent research, the average American spends over $5,000 a year on healthcare. Biden wants to bring that figure down. Here are some of the ways he hopes to do that:

• Allocate more money for Medicare. Biden believes he can ensure the fund has enough money to operate for another 25 years, without cutting benefits or raising costs. He proposes to do this by channeling money from tax reforms and changing the way Medicare negotiates drug prices.
• Make Affordable Care Act (ACA) insurance savings permanent. The White House says the enhanced subsidies for the ACA, which was initially a pandemic policy, reduced the cost of health insurance by an average of $800 per year. It was set to expire last year, but the Inflation Reduction Act extended it until 2025. Biden's budget proposes to take away the end date.
• Reduce costs of prescription drugs. Biden wants to cap the costs of certain prescriptions such as insulin and generic drugs, making it cheaper for Americans to access the medicine they need.

3. Boost affordable housing programs

The cost of housing has soared in recent years, and low-income families were hardest hit. According to the Department of Housing and Urban Development, there was a shortage of 7 million affordable homes before the pandemic. Biden wants to make it easier for people to buy homes and afford their rent. He proposes to:

• Incentivize construction of affordable housing. With $59 billion in funding and tax incentives, Biden wants to increase supply of affordable housing for low-income households.
• Help first-generation home buyers. The budget includes $10 billion in down payment assistance for low-income first-time home buyers whose parents do not own a home. According to a White House release, the idea is that 35% of potential program participants would be African-American and more than 25% would be Latino.
• Expand rental assistance for high risk groups. Over 2 million households receive rental assistance vouchers right now. But the White House says another 10 million are eligible and aren't getting the help they need, in part due to a lack of funding. The budget aims to help young people coming out of foster care and veterans to access housing vouchers.

4. Tax credits for energy efficient appliances

There are several parts of Biden's budget that aim to reduce our energy consumption and help the environment. One that could have a direct impact on your home is tax credits for energy-efficient appliances, including heat pumps.

Speaking from Philadelphia, Biden said, "All of this is going to lower energy costs for families on an average of $1,000 a year and create good-paying union jobs." The president also wants to invest $24 billion in helping communities become more resilient to extreme weather such as floods, wildfires, storms, and drought.

Bottom line

There are a number of ways that Biden's budget proposals could save average Americans money. If you're wondering whether he'll also raise your taxes to fund those savings, he says he'll do it by "making the wealthy and big corporations pay their fair share." Indeed, Biden says that if you're making less than $400,000 a year, you won't "pay a penny more in new taxes."

The real question now is what parts of the budget lawmakers in Washington will be able to pass, particularly what Republican-controlled House might agree to. House Republicans want to see cuts rather than increased spending, and they aren't big fans of increasing taxes, period.