President Barack Obama is really working hard this week at making sure he holds the title of most unpopular, on Tuesday, March 4, 2014 he announced and released his budget for fiscal year 2015, which is angering Congressional Republicans, but aimed at gaining support from Democrats in a midterm election year. Obama's $3.9 billion budget tagged the "roadmap for growth, opportunity, and fiscal responsibility" calls for $56 billion more in spending for discretionary programs then previously agreed upon $1.014 trillion, and focuses less on cutting the deficit, that automatically highlights the Democratic audience Obama intends to please with it. The details of the budget immediately won praise from Democratic Congressional and Senate leaders, while Republican leadership condemned the campaign ploy and the fiscal irresponsibility of it all.
President Obama officially announced his budget in a classroom at Powell Elementary School in Washington, D.C., where he emphasized in his remarks that this budget accompanies his economic opportunity program and increases spending enough through tax reforms to make it a reality. The budget includes $3.9 billion to be spent and will receive $3.3 trillion in revenues.
Recounting his State of the Union promise about opportunity, the president expressed; "In my State of the Union address, I laid out an agenda to restore opportunity for all people -- to uphold the principle that no matter who you are, no matter where you started, you can make it if you try here in America."
Obama reiterated the major elements of the economic opportunity program; "This opportunity agenda is built on four parts -- more good jobs and good wages; making sure that we're training workers with the skills they need to get those good jobs; guaranteeing every child access to a world-class education; and making sure that our economy is one in which hard work is rewarded."
President Obama then discussed that the budget will put his economic program into motion and reality; "The budget I sent Congress this morning lays out how we'll implement this agenda in a balanced and responsible way. It's a roadmap for creating jobs with good wages and expanding opportunity for all Americans."
The president boasted that with deficit decreased, and the spending amounts are in keeping with the two-year bipartisan budget deal and bill passed in December 2013; "And at a time when our deficits have been cut in half, it allows us to meet our obligations to future generations without leaving them a mountain of debt. This budget adheres to the spending levels that both parties in both houses of Congress already agreed to."
Justifying that there is no need to be concerned with the deficit and spending levels, Obama stated that the spending in his new budget will be covered by some spending cuts and closing tax loopholes for the wealthy. The president explained; "But it also builds on that progress with what we're calling an Opportunity, Growth and Security Initiative that invests in our economic priorities in a smart way that is fully paid for by making smart spending cuts and closing tax loopholes that right now only benefit the well-off and the well-connected."
Obama announced the important points in the budget including closing tax loopholes for wealthy retirement savings and corporations, "creates 45 high-tech manufacturing hubs," "expands access to the kind of high-quality preschool," "expands apprenticeships to connect more ready-to-work Americans with ready-to-be-filled jobs," "includes over $1 billion in new funding for new technologies to help communities prepare for a changing climate today," "set[s] up incentives to build smarter and more resilient infrastructure," and "gives millions more workers the opportunity to take advantage" of the earned income tax credit.
President Obama declared that it is a budget for the future, and trying slightly to placate the Republican Congress, by stating it still reduces the deficit; "This budget will also continue to put our fiscal house in order over the long-term… And it puts our debt on a downward path as a share of our total economy, which independent experts have set as a critical target for fiscal responsibility."
The president tried to make it seem like there has been a major reduction in the deficit, and this budget continues the trend as USA Today stated that the budget is "now on track to cut deficits to below 2% of the economy over the next decade," while next year the deficit will be "3.1 percent of the gross domestic product." Obama concluded; "As I said at the outset, our budget is about choices. It's about our values…. At a time when our deficits are falling at the fastest rate in 60 years, we've got to decide if we're going to keep squeezing the middle class, or if we're going to continue to reduce the deficits responsibly, while taking steps to grow and strengthen the middle class." The deficit currently sits at $514 billion, the lowest of Obama's presidency and predicts that unemployment will be at 6 percent by the end of his administration.
While the budget increases spending for initiatives related to his economic opportunity program, alots for raising the minimum wage and unemplyment benefits extension, it ignores deficit cutting, in general decreases military spending, forgoes "chained CPI" that pleased Republicans in the past, because it slowed the "annual cost-of-living increases to Social Security" at the same time raised funds, and transfers tax cuts from the wealthy to the lower income and middle class bracket.
President Obama knows his budget does not have a chance at all of passing the Republican Congress, and is more about pleasing Democrats leading up to the midterm election to be able to hold on to the Senate and ambitiously hopes to win control of the House of Representatives.
Last Friday, Feb. 28 Obama already warned Republicans in a speech to the Democratic National Committee Winter Meeting about his partisan planned budget; "As Democrats, we have a different idea of what the future looks like -- an idea rooted in our conviction that our economy grows best not from the top down but from the middle out. Next week, I will send Congress a budget that will create new jobs in manufacturing and energy and innovation and infrastructure. And we'll pay for every dime of it by cutting unnecessary spending, closing wasteful tax loopholes."
Speaker of the House John Boehner, R-OH let his strong opinions about the budget be known, issuing a statement that read; "After years of fiscal and economic mismanagement, the president has offered perhaps his most irresponsible budget yet. 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." Continuing Boehner stated; "This budget is a clear sign this president has given up on any efforts to address our serious fiscal challenges that are undermining the future of our kids and grandkids. In the coming weeks, Republicans will produce a responsible budget that balances, promotes opportunity, reforms our tax code, saves our critical safety net programs, and places a priority on creating jobs, not more government."
Both Sen. Rob Portman, R-Ohio and House Budget Committee Chairman Paul Ryan, R-WI called President Obama out for creating a budget with the sole purpose of winning votes. Sen. Portman stated at the American Action Forum; "They are more worried about their next election than the next generation. It's hard to imagine a worse abdication of our responsibility to the people we are elected to represent." While Rep. Ryan expressed; "This budget isn't a serious document; it's a campaign brochure. In divided government, we need leadership and collaboration. And in this budget, we have neither. The president has just three years left in his administration, and yet he seems determined to do nothing about our fiscal challenges."
The new budget pleased House Minority Leader Nancy Pelosi, D-CA, who stated; "The president's budget reflects the top priorities of the American people: creating jobs, closing the opportunity gap, strengthening the middle class, and building an economy that works for everyone. This budget is a clear statement of our values as a nation, a nation that believes in fairness, opportunity, and hard work as the bedrock of our way of life."
Despite the budget geared towards Democrats it still has to keep in line with the spending limits guidelined in the two-year bipartisan budget agreement passed in December 2013, and will not be voted on by Congress. Senate Budget Committee Chairwoman Patty Murray, D-WA, one of the co-authors of the bipartisan bill reiterated this position and the uselessness in fighting the document in a statement; "Fiscal Year 2015 is settled, the Appropriations Committees are already working with their bipartisan spending levels, and now we should work together to build on our two-year bipartisan budget, not create more uncertainty for families and businesses by immediately relitigating it."
Here is a rundown of some of the budget's key elements:
Defense: The defense budget will see a small increase of $28 billion to a total of $495.6 billion, however, the military is planning to reduce the number of soldiers by 100,000 by 2019.
Tax Credits: The Earned-Income Tax Credit (EITC) will be expanded by closing tax loopholes for the wealthy and self-employed to now reach "13.5 million low-income Americans," and will cost $60 million for a decade. It also lowers the minimum age to 21 and increases the maximum age to 65, while "increasing the value of the EITC for childless workers to $1,000." Additionally the Child and Dependent Care Tax Credit will be expanded, and also includes tax relief for university graduates paying off their loans.
Transportation: As previously announced the president allocated $302 billion to repair infrastructure over the next four years, and will be paid for partially with $150 billion through corporate tax reform.
Technology: Obama wants 45 manufacturing hubs opened in a decade; funds are allocated for the opening of five more in the next fiscal year.
Education and Early Childhood Education: As part of his economic opportunity program, Obama wants there to be universal preschool and to increase Head Start, allotting $500 million to help realize his goal, with $76 billion for the next decade in addition to the $56 billion to the states. There will be $200 million allotted for professional development for teachers, and $300 million for another "Race to the Top competition."
Revenue: Revenue will be raised predominately from tax reform for the wealthy at $650 billion, $150 billion through corporate tax reform and from Medicare and Medicaid reform at $402 billion.
Obama again specifically looked to start a fight with the Republican Congress, when despite his go-it-alone strategy of executive orders he cannot accomplish his economic opportunity program, raise the minimum wage and reform immigration without out them, yet he continues alienating them to pander some votes. The president should consider some bipartisanship might also help Democrats in the polls come the midterms. If Obama could actually follow through on his program, promises to his constituency, Democratic voters might prefer it more than a budget that will never come to fruition and is "dead on arrival."
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Bonnie K. Goodman is the Editor of the Academic Buzz Network, a series of political, academic & education blogs which includes History Musings: History, News & Politics. She has a BA in History & Art History & a Masters in Library and Information Studies, both from McGill University, and has done graduate work in Jewish history at Concordia University as part of the MA in Judaic Studies program. Her specializations are US, Canadian & Israeli politics.
