|President Barack Obama’s proposed 2015 budget seeks to expand tax credits for the poor and middle class by $60 billion, while obtaining revenue through higher taxes on the rich and “responsibility fees” from big banks. This blueprint would take effect at the beginning of the 2015 fiscal year, Oct. 1, if passed through the Republican-dominated House of Representatives.
The president’s proposal will shift investment toward social programs, job growth and greater economic opportunity, while decreasing allocations to military and agricultural expenditure, and chained CPI.
The budget would continue to reduce federal deficits, according to the president.
“This budget will also continue to put our fiscal house in order over the long term,” Obama said when detailing the proposal at a public school in Northwest Washington, D.C. “Not by putting the burden on folks who can least afford it, but by reforming our tax code and our immigration system and building on the progress that we’ve made to reduce health care costs under the Affordable Care Act.”
Proposed Sources of Revenue for Obama’s 2015 Budget
Increased revenue streams will include $651 billion in taxes from the rich, $56 billion in “financial crisis responsibility fees” from big banks, and a 28 percent cap in tax deductions for charitable donations. Establishment of the Buffett Rule — named for Obama supporter Warren Buffett — would require “wealthy millionaires” to pay an income tax of at least 30 percent.
Obama intends to raise $276 billion over a decade in changes to the international tax system as well by imposing measures to prevent companies from making manufacturing agreements overseas to lessen their tax burden. The budget will also target the controversial ‘Gingrich’ loophole that self-employed individuals can use to avoid paying taxes for Medicare and U.S. Social Security.
Significant cuts are proposed for the military as well, with the Army to be reduced to 440,000 troops — a 23 percent reduction from the height of the Iraq War. Military base closures and cuts to servicemen salaries, benefits and health care are being proposed by the Pentagon currently.
A $14 billion reduction to the federal crop insurance program would also take effect, along with the elimination of 250 Agriculture Department offices. The Environmental Protection agency would see a 3.7 percent cut in its budget. Additionally, the president called again for the end of $4 billion in tax incentives for the oil, gas and fossil energy industries.
Areas of Investment and Expansion
In Obama’s proposal, the White House would fund 100,000 new public school teachers, investments in manufacturing institutes, National Institutes of Health grants and a program to put thousands of veterans and youth to work upgrading the National Park System. Extensions of long-term unemployment insurance as well as expanded background checks for gun purchases are also allotted funding.
Related: President Obama Focuses on Jobs and Growth of Manufacturing in Latest Speech
Funding for Obamacare, Education and Other Non-Military Spending
The budget fully funds the Affordable Care Act, as the administration calculates the law will reduce federal deficits by $402 billion in the next 10 years. Obama called for $14.6 billion over the next decade in additional funding to expand primary care and assist the newly insured.
Half of Obama’s new Opportunity, Growth and Security Initiative, a $56 billion push to replace the remaining sequester with evenly split spending between defense and non-defense programs, would be funded by reducing tax breaks on retirement accounts for those making more than $200,000 annually.
Non-military spending would be used to strengthen preschool programs, fund $200 million for education technology training for teachers, provide services to increase high school graduation and college enrollment rates, and minimize the education achievement gap through a new $300 million competition called Race to the Top.
Middle Class Would Get a Tax Cut
Tax cuts would occur for the middle class, expanding the earned-income tax credit for 13.5 million childless workers, while also making existing temporary child tax credits permanent for 16 million additional families.
$91 billion would be invested in mandatory and discretionary transportation spending, up $14 billion from last year’s proposal. Transit spending would increase to roughly $14 billion, with rail investment at roughly $5 billion.
The National Institute of Standards and Technology and the National Institutes of Health would receive funding for work on cybersecurity and biomedicine, respectively.
The Office of the U.S. Trade Representative would receive a 5 percent increase in funding, totalling $57 million, to pursue potential trade agreements, including potential pacts with the European Union and 11 Asia-Pacific countries. The hiring of an additional 2,000 Customs and Border Protection officers was recommended by the president to help speed up the processing of goods and improve trade security.