Obama 2015 budget focuses on boosting economy
The budget projects a 2015 deficit of $564 billion and a shortfall this year of $649 billion. If those come true, it would mark three straight years of annual red ink under $1 trillion, following four previous years when deficits exceeded that mark every time.
The president’s spending plan also takes credit for reducing potential accumulated deficits over coming decade by $2.2 trillion, though the red ink would grow by $4.9 trillion over that period. The nation still faces long-term deficit problems as baby boomers retire and government health care costs continue to grow.
Nearly one-third of Obama’s savings come from claimed savings from the end of the U.S. war in Iraq and the gradual withdrawal of forces from Afghanistan. Critics argue that those savings are fictional because with the ending of U.S. involvement in those conflicts, no one had been expecting that money to be spent on combat.
Other savings the president claims include $158 billion from his proposal to revamp immigration laws, which has stalled in Congress. The nonpartisan Congressional Budget Office has made a similar estimate, with federal revenue accruing as more immigrants work and pay taxes.
The budget also retains Obama’s 2012 proposal to reshape corporate income taxes, including lowering the top rate from 28 percent to 25 percent. It says the overhaul would raise a one-time $150 billion with steps like smaller loopholes for U.S. companies doing business overseas — about half of which Obama would use to finance transportation improvements.
That resembles a proposal by House Ways and Means Committee Chairman Dave Camp, R-Mich., in a rare instance of overlap on revenues by the two parties. But prospects for a tax overhaul remain dim in an election year.
Much of the rest of Obama’s deficit reduction would come from other proposals with little chance of surviving in Congress, including higher taxes and Medicare costs for the rich and cuts in government payments to pharmaceutical companies and other Medicare providers. With declining budget deficits, it has become easier for lawmakers to avoid seriously considering the politically painful tax increases and spending cuts needed to significantly reduce the shortfalls.
Thus, the president’s budget does not renew last year’s offer — hated by many fellow Democrats — to save money by slowing increases of Social Security benefits. The White House says that plan was advanced only to entice congressional Republicans into deficit-reduction talks and was excluded this year after GOP leaders refused to reciprocate by offering tax increases.
Obama’s budget starts what should be a relatively peaceful year on Washington’s fiscal front lines. That is because land mines embedded in the budgetary landscape have been defused this time around after cliffhanger, partisan showdowns in recent years.
Instead of the annual fight over spending limits — which last year helped produce a 16-day partial government shutdown — Murray and Ryan’s bipartisan compromise set an overall agency spending cap for the next two years. That has eliminated the need for lawmakers to do anything but provide the details in later spending bills, easing the threat of another federal closure.
Also missing this year is a need to extend the government’s debt limit, which in the past has sparked battles that threatened economy-jarring federal defaults. Congress has given the Treasury Department authority to borrow money into next March, eliminating a must-pass legislative vehicle that either side might use to make demands.
Associated Press writers Andrew Taylor, Nedra Pickler and Martin Crutsinger contributed to this report.