With little political capital remaining on Capitol Hill, President Obama on Tuesday unveiled the final budget proposal of his administration – a largely aspirational, record $4.1 trillion plan including hundreds of billions of fresh spending for his top domestic, energy and environmental policies.
The proposal, which already has been dismissed out of hand by congressional Republicans, would boost tax revenues by $2.6 trillion over the coming decade, primarily by increasing taxes on wealthy Americans and businesses.
The deficit is set to rise to $616 billion this year after the White House and Congress approved a generous tax and spending accord last December. But the administration’s new budget projects that the deficit will decline again in 2017 and 2018 before sharply rising again as more and more Americans retire and place added pressure on entitlement spending.
In his budget message, Obama described his proposal as a major investment in the future – one that would provide more assistance to the middle class, create a cleaner environment and toughen national security and defense against cyberattacks.
“With a growing economy, shrinking deficits, bustling industry, and booming energy production, we have risen from recession freer to write our own future than any other nation on Earth,” Obama said. “It’s now up to us to choose what kind of country we want to be over the next 15 years, and for decades to come.”
“Will we accept an economy where prosperity belongs to a few and opportunity remains out of reach for too many?” he added. “Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort? The ideas I offer in this budget are designed to bring middle-class economics into the 21st century.”
While the lame duck president may find some Republican interest in a few of his proposals, House and Senate GOP budget leaders summarily ruled out the president’s budget, saying it doesn’t adequately address the nation’s long term deficit and national debt problems recently highlighted by the non-partisan Congressional Budget Office.
Sen. Mike Enzi (R-WY) and Rep. Tom Price (R-GA), the chairmen of the Senate and House Budget Committees, are so adamant in opposing Obama’s fiscal policies that they are refusing to allow White House budget director Shaun Donovan to testify before Congress on the president’s new plan – an unprecedented snub of the administration.
The total public debt outstanding reached a record $19 trillion last week and is projected to rise to more than 76 percent of gross domestic product in each of the next three years, up from less than 74 percent last year. That is the highest level seen since the aftermath of World War II.
“The President’s final budget continues his focus on new spending proposals instead of confronting our country’s massive overspending and skyrocketing $19 trillion in debt,” Enzi said in a statement. “This budget joins his others by placing America on a fiscal path that is unsustainable and threatens our long-term economic growth. It is not the budget effort that hardworking taxpayers deserve, and our times and country require.”
Obama’s new budget plan would spend $4.1 trillion in the fiscal year beginning October 1, or about five percent more than the estimated $3.9 trillion that is being spent this year on defense and domestic programs, government agencies, Social Security, Medicare, Medicaid and interest on the federal debt.
Tax revenues would rise as well, although the projected $3.64 trillion in revenues over the coming year still would leave a budget deficit of $503.4 billion in fiscal 2017.
At the same time, the administration is seeking $1.8 billion in emergency appropriations to respond to the Zika virus overseas and prepare for its spread in the United States.
Among the highlights of the president’s final budget proposal:
- A $10 a barrel oil tax to fund "clean transportation" projects to reduce carbon dioxide emissions that contribute to global warming.
- A 35 percent increase in cybersecurity funding to boost the capability of the federal government to defend itself against cyberattacks. The proposed $19 billion request represents one of the largest increases ever sought in this area
- $1 billion for the "cancer moonshot" program led by Vice President Biden to research cures for cancer.
- $1 billion over two years to expand treatment for people addicted to prescription opioids or heroin.
- A tripling of the maximum child care credit for middle class families with increases of up to $3,000 per child.
- A downsized version of the highly unpopular "Cadillac tax" on premium health care plans provided by employers, which was designed as part of the Affordable Care Act to hold down health care costs.
- Increased funding for the Securities and Exchange Commission and Commodity Futures Trading Commission, two key government overseers of the financial system. Obama would increase SEC funding by 11 percent and CFTC funding by 32 percent.
- Overhaul of unemployment insurance coverage by creating a state-based system of wage insurance that would replace up to half of a worker’s wages if he or she loses a job or is forced to take lower-payment employment.