Policy Backgrounders

The President’s FY 2025 Budget

March 14, 2024

Trusted Insights for What’s Ahead™

On Monday, the President submitted the Administration’s proposed Budget for Fiscal Year (FY) 2025. Presidents’ budgets generally differ substantially from what will eventually pass Congress, particularly in a divided Congress. However, these budgets indicate both policy priorities and, this year, some of the themes the President will likely emphasize in the fall campaign. The Budget includes increased spending for many domestic programs; continues defense spending increases given higher geopolitical tensions; and proposes significant tax increases for corporations and high-earning individuals.

• Total spending in the proposal is $7.266 trillion (25 percent of GDP), an increase of $1.131 trillion from actual outlays in FY2023. Over 80 percent of this increase is tied to mandatory spending on Social Security, Medicare, other mandatory programs, and to servicing the national debt.
• The President also requests $1.629 trillion in base discretionary budget authority, an increase of 1.6 percent from 2024 spending levels of $1.603 trillion. Defense spending rises 4 percent over 2024 levels to $850 billion, and foreign assistance programs also rise.
• Other discretionary spending priorities in the Budget include education, childcare, and families; border security and immigration; infrastructure; worker protections; and research and AI.
• The Budget proposes several tax increases for corporations and high-income taxpayers, which the Administration projects would increase tax receipts by $4.9 trillion over the next decade.
• Under the Administration’s economic assumptions, the Budget would cut deficits by a cumulative $3.2 trillion over the next decade, from $19.5 trillion under current law to $16.3 trillion. However, total Federal debt held by the public is still expected to climb to 105.6 percent of GDP in 2034, which would be the second highest level in American history.
• The Budget is a statement of priorities and will likely not receive a formal vote in Congress.