News
Biden pushes $6 trillion budget to ‘reimagine’ US economy, beat China
President Joe Biden on Friday proposed a $6 trillion budget to “reimagine” the US economy and stave off Chinese competition, though driving the United States into record debt — and with Congress first needing to give approval.
Announcing the proposed spending, Biden said a post-pandemic United States “cannot afford to simply return to the way things were before.”
“We must seize the moment to reimagine and rebuild a new American economy,” he said.
The president’s annual budget is more a wish list or a message on his priorities than anything else. Congress ultimately decides what money goes where and the current Congress has only the narrowest Democratic majority.
Opposition Republicans are leery of any big new role for the central government. Even some of Biden’s supporters warn that an economy already set to roar back from the Covid-19 shutdown risks getting swept up into an inflationary spiral.
But the massive plan signals the White House’s determination to put hard numbers on Biden’s campaign to rethink the relationship between government and business in what he says is an existential contest with China.
Under the Biden blueprint, the federal spigot would unleash $6.011 trillion in 2022, with increases gradually rising to $8.2 trillion in 2031. Debt as a percentage of annual GDP would be expected to quickly surpass the level seen at the end of World War II.
The Democrat made clear where the lion’s share of that expected $6 trillion price tag should go.
One huge chunk would be an infrastructure bill originally proposed at $2.3 trillion but since whittled down to $1.7 trillion in negotiations with Congress.
Another $1.8 trillion would go on increased state-funded education and social services — all, Biden argues, part of building a better 21st century workforce.
The overall aim, Biden said, is to grow the US middle class, while positioning “the United States to out-compete our rivals.”
Can it pass?
The budget proposal is being unveiled just ahead of the long Memorial Day weekend and with Congress heading out on a week’s recess.
The timing may dampen the immediate furor on Capitol Hill where many Democrats want Biden to use his control of Congress to push transformational legislation but Republicans are playing hardball in trying to block most of what the president proposes.
Spending priorities are just one area of division.
For example, Republicans are pretty much unanimous in opposing Biden’s broad definition of infrastructure to include green energy and social programs
But there’s even less agreement on how to pay for it.
Biden wants to raise money by ending a corporate tax cut Republicans passed under his predecessor Donald Trump. He also wants to go aggressively after tax loopholes used by the ultra-wealthy and large corporations.
Republicans refuse to accept this and say their own, more modest, infrastructure spending plans could be paid for by reallocating unspent money already budgeted.
Despite the standoff — and the sheer scale of Biden’s mega budget — the White House still has a potential ace up its sleeve in that slim Democratic majority.
Ordinarily, Biden needs at least 10 Republicans to cross over in the evenly split Senate, a tall order at the best of times.
However, if Democrats remain unanimous — which is also not guaranteed — they may be able to pass the budget through a fast-track procedure known as reconciliation.
… Assures Prompt Salary Payment
The Sole Administrator of Rivers State, Ibok-Ete Ibas, has announced the release of withheld local government allocations, assuring that necessary steps would be taken to ensure the prompt payment of workers’ salaries.
Ibas disclosed this on Thursday during a meeting with Heads of Local Government Administrators in Port Harcourt, describing the engagement as a crucial step towards restoring stability and progress in the state.
He lamented the economic hardship in the Niger Delta, noting that despite the region’s wealth of natural resources, many of its people continued to suffer.
“This is unacceptable,” he said, stressing the need for transformation and financial accountability.
The administrator expressed concern over the delay in salary payments across local government areas, acknowledging the struggles of affected workers.
“I feel the pain of the workers,” he stated, assuring them that the withheld allocations had been released and that his administration would ensure prompt payment of salaries.
However, he warned that financial discipline would be strictly enforced, directing all local government areas to submit their wage bills with supporting documents through the office of the Head of Service.
Ibas, a retired Vice Admiral and former Chief of Naval Staff, vowed to scrutinise public funds and take decisive action against mismanagement.
“Good governance is not just a slogan; it is a commitment to changing the negative narrative within the next six months,” he added.
He also emphasised the need for collaboration with traditional rulers and security agencies to enhance grassroots security.
“You must take the lead in ensuring security within your domains,” he charged local government administrators.
Reacting, the President of the Nigeria Union of Local Government Employees (NULGE) and Administrator of Port Harcourt Local Government Area, Clifford Paul, commended the Federal Government for appointing Ibas, attributing the decision to his leadership competence.
He urged the administrator to prioritise workers’ welfare, stating that local government workers were currently owed two months’ salaries.
“With the release of the withheld allocations, we are hopeful that workers will receive their entitlements soon,” he said.
Paul further called on stakeholders to seize the opportunity to rebuild trust and foster unity in the state.
President Bola Tinubu has sworn in Vice Admiral Ibok-ete Ibas (rtd.) as the Sole Administrator of Rivers State, following a brief meeting at the Presidential Villa on Wednesday afternoon.
Ibas’ appointment comes a day after Tinubu, in a nationwide broadcast, declared a state of emergency in Rivers State and suspended Governor Siminalayi Fubara, Deputy Governor Ngozi Odu, and all members of the Rivers State House of Assembly.
The President cited Section 305 of the 1999 Constitution as the legal basis for his action, stating that he could no longer stand by as the political crisis in the state escalated.
However, the suspension of Fubara and other elected officials has sparked widespread condemnation. Former Vice President Atiku Abubakar, Labour Party’s Peter Obi, senior lawyer Femi Falana (SAN), the Peoples Democratic Party (PDP), the Nigerian Bar Association (NBA), and several civil society groups have rejected the move, describing it as unconstitutional and undemocratic.
In contrast, the pro-Nyesom Wike faction of the Rivers State Assembly, led by Martins Amaewhule, has praised Tinubu’s decision, accusing Fubara of disregarding a Supreme Court ruling related to the state’s political crisis.
Vice Admiral Ibas, a retired naval officer, previously served as Chief of Naval Staff from 2015 to 2021 under President Muhammadu Buhari. Born in Cross River State, he attended the Nigerian Defence Academy in 1979 and went on to have a distinguished military career, rising to the highest ranks in the Navy.
He is a member of the Nigerian Institute of International Affairs (NIIA) and the Nigerian Institute of Management. In 2022, Buhari conferred upon him the national honour of Commander of the Federal Republic (CFR) in recognition of his service.
Ibas now assumes leadership of Rivers State amid a deeply divided political landscape, with tensions running high over the legality and implications of the emergency rule.
The Federation Accounts Allocation Committee (FAAC) disbursements to the federal, state, and local governments surged by 43 per cent in 2024, reflecting a major boost in government revenue inflows.
According to the latest FAAC Quarterly Review released in Abuja on Tuesday, the Nigerian Extractive Industry Transparency Initiative (NEITI) disclosed that a total of N15.26 trillion was allocated to the three tiers of government within the year under review.
NEITI’s Acting Director, Communication & Stakeholders Management, Obiageli Onuorah, described the disbursements as a historic high, noting that the allocations surpassed previous years by a remarkable margin.
Key Drivers of Revenue Growth
The report attributed the surge in FAAC disbursements to sustained fiscal reforms by the Federal Government, particularly the removal of fuel subsidies and foreign exchange rate adjustments. These policies have significantly boosted oil revenue remittances and overall government earnings.
Speaking at the official release of the report in Abuja, NEITI’s Executive Secretary, Dr Orji Ogbonnaya Orji, highlighted the impact of these reforms on national and subnational finances. He noted that the withdrawal of fuel subsidies in mid-2023 reshaped revenue distribution and affected debt repayment deductions from state allocations.
Dr Orji stated that the objective of the report was to assess the sustainability of government borrowing, the fiscal implications of resource dependence, and the economic realities confronting states benefitting from the 13% derivation revenue from oil, gas, and solid minerals.
“The analysis focused on crude oil revenue derivation states, as solid minerals continue to underperform despite their significant potential,” he added.
Breakdown of FAAC Allocations
According to the NEITI report, FAAC disbursements in 2024 were as follows:
Federal Government: N4.95 trillion
State Governments: N5.81 trillion
Local Governments: N3.77 trillion
Total FAAC Disbursement (Including Derivation Revenue): N15.26 trillion
State governments recorded the highest percentage increase in allocations, jumping by 62% from N3.58 trillion in 2023 to N5.81 trillion in 2024. Local government councils saw a 47% increase, while the federal government’s share rose by 24% from N3.99 trillion in 2023.
The report highlighted that FAAC allocations grew by 66.2% over three years, rising from N9.18 trillion in 2022 to N10.9 trillion in 2023 and N15.26 trillion in 2024, with the most significant leap occurring between 2023 and 2024.
Economic Risks and Challenges
Despite the revenue boost, NEITI cautioned that economic risks associated with fiscal reforms must be managed effectively. Key risks identified include:
Inflationary pressures
Possible rise in debt servicing costs
Fiscal uncertainty for oil-dependent states
The agency urged governments at all levels to adopt innovative measures to cushion the impact of these economic challenges.
State-by-State Allocation Analysis
Lagos received the highest FAAC allocation in 2024, with N531.1 billion, followed by:
Delta State: N450.4 billion
Rivers State: N349.9 billion
Conversely, the least allocations went to:
Nasarawa State: N108.3 billion
Ebonyi State: N110 billion
Ekiti State: N111.9 billion
The report also showed that six states—Lagos, Rivers, Bayelsa, Akwa Ibom, Delta, and Kano—each received over N200 billion, collectively accounting for 33% of total state allocations. Meanwhile, the six lowest-receiving states—Yobe, Gombe, Kwara, Ekiti, Ebonyi, and Nasarawa—received only 11.5% of total allocations.
Debt Deductions Raise Fiscal Concerns
A total of N800 billion was deducted from states’ allocations for foreign debt servicing and contractual obligations, representing 12.3% of total state allocations.
Lagos State had the highest debt deduction, with N164.7 billion, followed by:
Kaduna State: N51.2 billion
Rivers State: N38.6 billion
Bauchi State: N37.2 billion
NEITI warned that many states with high debt burdens were among the lower FAAC recipients, raising concerns about debt sustainability and overall fiscal health.
With the federal and state governments increasingly reliant on oil revenue, the report emphasized the need for economic diversification, stronger financial management, and sustainable debt practices to ensure long-term fiscal stability.
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