President Obama unveiled his 2015 budget on Tuesday.
(Photo: Pablo Martinez Monsivais, AP)
WASHINGTON (USA TODAY) -- President Obama released his 2015 budget Tuesday, making
the case for $56 billion in increased spending while offering the rosy
projection that the nation is now on track to cut deficits to below 2%
of the economy over the next decade.
The budget proposal, which
faced resistance from Republican lawmakers even before its release,
details Obama's wish list for new manufacturing hubs, job training and
early childhood education and other domestic programs that would be
offset by revising some spending programs and slashing tax benefits for
multimillion-dollar retirement accounts.
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"It's a road map for
creating jobs, with good wages and expanding opportunities for all
Americans," Obama said at an event at a Washington elementary school to
announce the budget's release. "And at a time when are deficit has been
cut half, it allows us to be our obligations to future generations
without leaving them a mountain of debt.
After floating the idea
of implementing "chained CPI" - a less generous calculation for annual
cost-of-living increases to Social Security - as well as raising tax
revenues in last year's proposal, Obama, as expected, downplayed deficit
cutting this year and offered a budget that will be far more palatable
to Democrats running for re-election.
Obama would pay for half of
his new spending by implementing new rules that would cap tax-preferred
saving on retirement funds for individuals who have already accumulated
enough to finance an annual income of more than $200,000 per year in
retirement, or more than $3 million per person.
The rest would be
paid for through a series of spending changes, including reducing
subsidies to the federal crop insurance program ($14 billion), raising
TSA passenger fees on commercial air travel ($5 billion), and preventing
individuals from collecting unemployment insurance and disability
Insurance at the same time ($3 billion).
STORY: Obama budget sets up election year debate
before the budget release, Republicans began picking away at a proposal
that is predicated on long-term optimism about the state of the U.S.
"After years of fiscal and economic mismanagement, the
president has offered perhaps his most irresponsible budget yet," House
Speaker John Boehner said. "American families looking for jobs and
opportunity will find only more government in this plan."
Rep. Hal Rogers, the Republican chairman of the House Appropriations Committee, suggested Obama's budget is dead on arrival.
years of fiscal and economic mismanagement, the president has offered
perhaps his most irresponsible budget yet," Rogers said. "American
families looking for jobs and opportunity will find only more government
in this plan."
Obama trumpeted in his budget that the deficit
will come in at $514 billion in the current fiscal year, the lowest it's
been since he took office five years ago, and is projected to be even
lower next year. The budget also assumes that unemployment will
gradually fall to 6% by the last year of Obama's presidency and will
fall to 5.4% by 2018 and remain at that level through 2024
Republicans complain that Obama and fellow Democrats are downplaying the
independent Congressional Budget Office's calculation that the annual
deficit is projected to balloon to more than $800 billion by 2022, as
Medicare costs are projected to rise. GOP lawmakers charge the president
is turning his back on austerity to help fellow Democrats win votes.
are more worried about their next election than the next generation,"
Sen. Rob Portman, R-Ohio, said in a speech last week at the American
Action Forum in Washington. "It's hard to imagine a worse abdication of
our responsibility to the people we are elected to represent."
the president's budget says $650 billion can be saved through adopting
changes in the tax code. He also points to a series of changes to
Medicare and Medicaid, including encouraging the purchase of generic
drugs and stopping companies from blocking consumers' access to generic
drugs, that can bring $402 billion in savings over the next decade.
at time when our deficits are falling at the fastest rate in 60 years,
we got to decide if we're going to keep squeezing the middle class, or
if we're going to continue reduce the deficit responsibly, while taking
steps to grow and strengthen the middle class," Obama said.
Among the highlights in Obama's budget proposal:
sets the Pentagon budget at $495.6 billion, roughly the same level as
the last fiscal year. Defense Secretary Chuck Hagel has already outlined
plans for reducing the size of the Army by 100,000 soldiers by 2019,
shrinking the largest service's troop level to pre-World War II levels.
wants to expand the earned-income tax credit for 13.5 million
low-income Americans by closing tax loopholes benefiting certain fund
managers and high-income, self-employed workers. Under Obama's proposal,
7.7 million workers would be eligible for a larger credit and 5.8
million workers would be made newly eligible for the credit. The
proposal would cost $60 billion over 10 years.
budget includes $302 billion over four years to repair dilapidated
roads and bridges. Obama would pay for the projects through $150 billion
in temporary revenues that would be generated by ending some tax
breaks for businesses as part of a corporate tax reform that would also
lower tax rates.
Obama has already
launched four hubs for high-tech manufacturing that connect businesses
with research university. His long-term vision calls for establishing 45
of these hubs over the next decade, and his 2015 budget includes
funding for five more.
EARLY CHILDHOOD EDUCATION
president repeats his push, included in his 2014 budget, for universal
prekindergarten and expanding Head Start, which provides early childhood
education for low-income families. The proposal would be paid for
through an increase in the tobacco tax. Obama also proposes to double
the Education Department's current discretionary investment in
preschools to $500 million to help support the program. An additional
$250 million in grant money would also be made available to the program.
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