Biden spending freeze plan would save $1 trillion: Treasury

President Joe Biden has proposed a plan to freeze government spending at current levels for the next two years, which would save an estimated $1 trillion, according to the Treasury Department.

The plan, which was released on Wednesday, would apply to all discretionary spending, which is about two-thirds of the federal budget. Discretionary spending includes funding for things like the military, education, and healthcare.

The freeze would not apply to mandatory spending, which is about one-third of the federal budget and includes things like Social Security, Medicare, and Medicaid.

The Treasury Department said that the spending freeze would help to reduce the federal deficit and make the government more sustainable in the long run.

“This plan is a responsible and prudent step that will help to put our nation on a fiscally sustainable path,” said Treasury Secretary Janet Yellen.

The spending freeze is likely to face opposition from Democrats in Congress, who argue that it would hurt important programs and services.

“This is a reckless and irresponsible proposal that would hurt working families and seniors,” said Senator Chuck Schumer, the Democratic leader in the Senate.

It is unclear whether the spending freeze will be approved by Congress. However, the proposal is a sign that the Biden administration is serious about reducing the federal deficit.

Here are some of the key details of the spending freeze plan:

• It would apply to all discretionary spending for the next two years.
• It would not apply to mandatory spending.
• It is estimated to save $1 trillion.
• It is likely to face opposition from Democrats in Congress.

The spending freeze is a significant development in the ongoing debate over the federal budget. It remains to be seen whether the plan will be approved by Congress, but it is a sign that the Biden administration is serious about reducing the deficit.

The White House says any cuts to the deficit should apply more broadly to reduce the burden on individual departments, and wants to raise some taxes to fund the deficit reduction — which Republicans have so far opposed.

The additional trillion dollars in savings proposed by the president would be realized over the next 10 years, according to the person familiar with the talks.

Yellen has repeatedly said the government could run out of money to pay for its existing obligations as early as June 1. That is now eight days away.

“The President’s budget that he put forward actually proposes $3 trillion worth of deficit reduction over 10 years,” Yellen said at a Wall Street Journal event on Wednesday.

Other areas of compromise from the president include proposals to rescind unspent Covid-19 relief funds, the person said.