Obama sends $3.9 trillion budget to Congress

Fiscal blueprint speaks to Democrats by promoting initiatives such as job growth, education and infrastructure

President Barack Obama’s budget comes three months after Congress and the White House made a two-year budget pact that has set the parameters for this election year’s budget negotiations.
Mark Wilson/Getty Images

Barack Obama administration sent Congress a $3.9 trillion budget Tuesday morning, laying out a vision for the country that focuses on boosting growth through greater spending on infrastructure, education and other large-scale projects and addressing income inequality.

The annual fiscal blueprint by the White House is the clearest and most comprehensive articulation of the administration’s economic priorities, but the proposals are rarely ever enacted as is. Instead, they are supposed to serve as a starting point for negotiations with lawmakers.

This year the budget framework was even more restricted by the deal congressional Republicans and Democrats struck in late 2013 that has placed caps on discretionary spending for the next two years.

In advance of the midterm elections in November, Obama’s spending and taxing priorities seemed to corroborate Democrats’ worldview rather than offer concessions to Republicans to entice them to come to the bargaining table on the budget, as it has in years past.

For example, gone from this year’s document is a controversial proposal that would have entailed more-modest annual increases in Social Security payouts — taken by some Democrats as an affront to their liberal base.

The budget does, however, ask for an expansion of the earned income tax credit, a program popular with both parties that benefits low-income workers, particularly families with children. Under the administration’s proposed changes, the program would be more generous to childless low-income workers and benefit an additional 13.5 million low-income earners, according to the White House.

“Our budget is about choices, it’s about our values,” Obama said upon unveiling the budget, during a visit to Powell Elementary School in Washington, D.C. “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.”

The budget requests increased spending in such areas as pre-K education, infrastructure, manufacturing hubs, workforce training and research while calling for about $1 trillion in new taxes over the next 10 years through an overhaul of the corporate tax code and higher taxes on the wealthiest Americans. Other spending offsets include reducing certain agricultural subsidies, raising Transportation Security Administration passenger fees and preventing people from collecting unemployment and disability insurance at the same time. 

In addition, the budget points to the need to pass immigration reform and raise the minimum wage — items long on the president’s wish list — as urgent economic policy matters.

Obama once again touted the budget’s attention to shrinking deficits in the long term. Nonetheless, critics charged that the White House’s view was overly optimistic and does not account for an aging baby boomer population that will increasingly draw Social Security and Medicare benefits.  

As soon as the budget was released, there were signs that the White House’s plans were dead on arrival. Gridlock between the Democratic-led Senate and Republican-dominated House and election-year pressures on the majority of Congress’ members up for re-election look set to doom many of the proposals.

“After years of fiscal and economic mismanagement, the president has offered perhaps his most irresponsible budget yet,” House Speaker John Boehner, R-Ohio, wrote in a statement. “American families looking for jobs and opportunity will find only more government in this plan. Spending too much, borrowing too much and taxing too much, it would hurt our economy and cost jobs.”

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