Analysis, News, Spending/Taxes

Obama sends 2016 budget to Congress

(Photo by Saul Loeb of AFP Photos)
(Photo by Saul Loeb of AFP Photos)

President Obama officially sent his version of the 2016 federal budget to Congress on Monday and, despite being barely a day old, it is already being torn apart by the Republican-controlled Congress.

The Obama Administration says the $4 trillion budget (which can be viewed on the White House website by clicking here; beware of large download times and large words) will give many middle-income families the opportunity to save money through various tax cuts, while also closing tax loopholes for wealthier individuals and corporations.

According to The Hill, the administration has included tax credits for child care ($3,000), college ($2,500), and an expansion of the earned income tax credit for those workers who do not have children.

The president’s budget is also proposing to spend $478 billion to update the nation’s physical and cyber infrastructure, an idea he had pushed extensively in the days and weeks before the State of the Union address. The proposed budget includes further funding for the Build America Investment Initiative (BAII) and the Highway Trust Fund, with both programs intended to help repair and rebuild the country’s roads, highways, and water networks. $14 billion is included to boost cybersecurity.

To help pay for the various investments included in the budget, the administration has also proposed numerous cuts to certain areas government spending, as well as some tax increases. Here is what the White House says on the proposed spending cuts (click here to see the table of proposed cuts and agencies affected):

Many of these proposals have now been implemented, and the Budget builds on this success by including 101 cuts, consolidations, and savings proposals projected to save over $14 billion in 2016. While the Budget proposes increases in discretionary budget caps to make room for a range of domestic and security investments, it still includes discretionary cuts, consolidations, and savings proposals totaling $3.6 billion to further make room for investments to help move the Nation forward. Savings from mandatory and program integrity proposals total $10.6 billion in 2016 and $609 billion over 10 years; about 70 percent of these savings are from health reform proposals.

Under tax increases, the administration is proposing a new, one-time tax on American companies that are incorporated overseas, which would reportedly raise over $230 billion. An increase of the tax of capital gains is also included in the budget.

Republicans have predictably slammed the president’s budget, with many citing the increases in taxes, the long-term deficit, and in spending that will exceed the limits agreed to in the 2011 budget deal as reasons for their opposition.

Sen. Orrin Hatch (R-Utah) bashed the budget, saying it does nothing but give Democrats a blueprint for the 2016 elections.

“This budget blueprint shamelessly panders to the Democratic base and does nothing to put our nation back on a sound fiscal footing,” said Hatch, who is the head of the Senate Finance Committee (quote from Yahoo! News).

House Speaker John Boehner (R-Ohio) also severely criticized the budget, calling it “more of the Washington gridlock that has failed middle-class families.” Speaker Boehner also hinted that a Republican counter-budget, which figures to include heavy cuts to many government programs and agencies, could be introduced soon.

 

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