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Obama 2015 budget focuses on boosting economy

First Published Mar 04 2014 10:00AM      Last Updated Mar 04 2014 12:53 pm

Washington • President Barack Obama sent Congress a $3.9 trillion budget Tuesday that would funnel money into road building, education and other economy-bolstering programs, handing Democrats a playbook for their election-year themes of creating jobs and narrowing the income gap between rich and poor.

The blueprint for fiscal 2015, which begins Oct. 1, is laden with populist proposals designed to fortify those goals. It includes new spending for pre-school education and job training, expanded tax credits for 13.5 million low-income workers without children and more than $1 trillion in higher taxes over the next decade, mostly for the wealthiest Americans and corporations.



"As a country, we’ve got to make a decision if we’re going to protect tax breaks for the wealthiest Americans or if we’re going to make smart investments necessary to create jobs and grow our economy and expand opportunity for every American," Obama told students at an elementary school in the nation’s capital.

With an eye in part on job creation, $302 billion would be spent to upgrade roads, railroads and mass transit, with more money aimed at improvements at Veterans Affairs hospitals and national parks. Additional funds would be aimed at clean energy research, creating 45 public-private manufacturing institutes for spurring innovation and training workers whose companies have closed or moved.

To help pay for those initiatives and others and trim federal deficits as well, Obama relies in part on higher revenue.

He would raise $651 billion by limiting tax deductions for the nation’s highest earners and with a "Buffett tax" — named for billionaire Warren Buffett — slapping minimum levies on the highest-earning people. Taxes would also be raised on large estates, financial institutions, tobacco products, airline passengers and managers of private investment funds.

Congress has ignored those revenue proposals and many of Obama’s spending ideas before. With the entire House and one-third of the Senate facing re-election in November, campaign-year pressures and gridlock between the Democratic-led Senate and Republican dominated House all but ensure that few of the president’s initiatives will go far.

"The president has offered perhaps his most irresponsible budget yet," said House Speaker John Boehner, R-Ohio, who has participated in two failed rounds of deficit-reduction talks with Obama since 2011. "American families looking for jobs and opportunity will find only more government in this plan."

"It’s disappointing that the president produced a campaign document instead of putting forth a serious budget blueprint that makes the tough choices necessary to get our fiscal house in order," said Alabama Sen. Jeff Sessions, top Republican on the Senate Budget Committee.

Obama’s budget claims to obey overall agency spending limits that were enacted in December after a bipartisan compromise was reached between Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash., the heads of the House and Senate budget committees.

Yet Obama was proposing an additional package of $55 billion in spending priorities, half for defense and half for domestic programs.

Without that extra money, Pentagon spending be $496 billion, the same as this year. The Pentagon plans to shrink the Army from 490,000 active-duty soldiers to as few as 440,000 over the coming five years — the smallest since just before World War II.

The extra funds would allow steps like buying additional aircraft and enhancing training.

Budget cutters have had the upper hand over defense hawks in recent years. But this year’s debate over military spending will have an added element as Obama encounters Republican demands for a tough U.S. stance following Russia’s intervention in Ukraine’s Crimea peninsula.

On the domestic side, Obama would use the additional money for grants to states for preschools, new research financed by the National Institutes of Health and modernization of aviation safety systems.

That extra spending would be paid for by cutting federal crop insurance, raising airline passenger fees and capping retirement account tax benefits for wealthy savers — all of which would face an uphill climb in Congress.

The White House released fewer budget documents than normal on Tuesday, making it hard to determine exact costs and details of some of those additional spending proposals and others, such as the 2015 price tag for Obama’s health care overhaul.

However, Obama’s plan to expand the earned income tax credit to childless, low-income workers would cost $116 billion over 10 years. It would increase the current $500 maximum those recipients can receive to $1,000.

 

 

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